Defined Benefits Scheme - Transfer or Not

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  • segovia
    segovia Posts: 325 Forumite
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    Dox wrote: »
    Those of us old enough to remember the mis-selling of personal pensions in the late 1980s and 1990s may also remember all too well the peer pressure brought to bear (by genuinely well meaning individuals, who thought they were doing friends a favour) on those people silly enough to insist on staying in their final salary schemes. Why would you do that, when you could transfer out to the 'freedom' of a personal pension with promises of massive returns (based on interest rates of 15% or so which would, of course, never fall).

    Given the size of her transfer value, she'd be required to seek independent financial advice before any transfer could proceed, so if you are seriously in doubt, do that. Might be interesting to see how many of those preaching the gospel of transferring out had IFAs who actually recommended these transfers.

    We did seek some advice from a few years ago from an IFA who said under no circumstances leave the DB, it's too good. We went back to the same IFA about 3 years after the advice and she said it's worth considering and if we wanted to move the costs would be £750.00 for the advice and 2.5% of the pot to move, total £8250.00.

    All of her colleagues who have gone to IFA's have all received the same advice i.e. leave the DB. But I have to question their reasons for the recommendation because if they recommend staying the IFA does not get the large commission.
  • segovia
    segovia Posts: 325 Forumite
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    segovia wrote: »
    I have no idea what a CETV is

    Ok, I know now

    The CETV is what I quoted, £300,000.00. That was the last time we checked.
  • segovia
    segovia Posts: 325 Forumite
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    Brynsam wrote: »
    Does she really believe all her colleagues are telling her about their 'massive returns'? As for 'almost all' - sounds like lemmings going over a cliff, if it's true.

    Your common sense sounds eminently sensible. Given that your own pension savings are relatively modest, her DB pension sounds an excellent foundation for her retirement and yours.

    True they only share the good news, they are unlikely to share bad news.
  • segovia
    segovia Posts: 325 Forumite
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    xylophone wrote: »
    And have you and your wife obtained new state pension statements?

    Yes, we have checked and they are what we expected, although the dates they become payable are a bit of a shock. I think the government is hoping we'll be dead by then.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    segovia wrote: »
    if they recommend staying the IFA does not get the large commission.

    What commission? IFAs aren't paid by commission.
    Free the dunston one next time too.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    232607 wrote: »
    I'm well aware that a crash could come at any time that could drop my portfolio by 30%.

    What's your expectation for growth though. Given the extended bull market. A sustained period of underperformance could be just as debilitating.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    232607 wrote: »
    I'm well aware that a crash could come at any time that could drop my portfolio by 30%.

    Or by two-thirds.
    https://www.hussmanfunds.com/comment/mc180725/
    Free the dunston one next time too.
  • 232607
    232607 Posts: 158 Forumite
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    Thrugelmir wrote: »
    What's your expectation for growth though. Given the extended bull market. A sustained period of underperformance could be just as debilitating.


    I need 5,1/2% growth over the next 3,1/2 years to get my pot to what it needs to be to jump ship at 55. If it's not there I carry on.
    I then intend to draw out at 5%.
    I appreciate this withdrawal rate is pretty top end but this would be reduced when my DB kicks in at 65, then further by virtue of the upper level SP 2 years later.

    The contingency plan is to move 3 years of money in a cash fund to draw on when there is a crash, thus allowing time for a recovery.
    Further contingency plans are to reduce the 5% withdrawal rate and/or go back to part time work should things not be going well.
    All we can do is have robust plans and a good back up plan.

    Whilst we have been in a prolonged bull run it doesn't mean it will automatically turn anytime soon. If it was that simple we could all time the market & be much richer.
  • TBC15
    TBC15 Posts: 1,452 Forumite
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    232607 wrote: »
    I need 5,1/2% growth over the next 3,1/2 years to get my pot to what it needs to be to jump ship at 55. If it's not there I carry on.
    I then intend to draw out at 5%.
    I appreciate this withdrawal rate is pretty top end but this would be reduced when my DB kicks in at 65, then further by virtue of the upper level SP 2 years later.

    The contingency plan is to move 3 years of money in a cash fund to draw on when there is a crash, thus allowing time for a recovery.
    Further contingency plans are to reduce the 5% withdrawal rate and/or go back to part time work should things not be going well.
    All we can do is have robust plans and a good back up plan.

    Whilst we have been in a prolonged bull run it doesn't mean it will automatically turn anytime soon. If it was that simple we could all time the market & be much richer.

    Why not 3 yrs of cash in bonds?
  • 232607
    232607 Posts: 158 Forumite
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    kidmugsy wrote: »
    Or by two-thirds.
    https://www.hussmanfunds.com/comment/mc180725/

    Thanks for the link, I've not read it in its entirety but I will do.
    It does seem to be talking about specific sectors & is rather US orientated.
    May be true if this is what I was "all in".
    Probably less so with being globally diversified across all equity classes & having some element (20%) of none equities.
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