Defined Benefit Transfer Values

ArchaeoNeo · 12 January 2017 at 2:13PM

Hi to all, as a newbie poster I would appreciate some thoughts/advice on what to do with my deferred Defined Benefit pension. Apologies if this has been discussed before.

A little background: I took voluntary redundancy from Barclays in 1999 after 13 years and deferred my 1964 DB pension scheme. I then jobbed around for five or so years collecting various pension schemes along the way until I re-joined Barclays in 2004. I transferred three Defined Contribution pots into my new Barclays Afterwork DC scheme (the 1964 scheme was closed to new employees, and I believe closed full-stop in 2010), just to keep things simple. I was then made redundant (again - no choice this time!) by Barclays in 2009 and deferred my Afterwork pension.

I decided to go back to 'big school' and do another degree; I ended up staying to the point where I'm now doing a part-time PhD, so I have not looked at my pensions for six years. I decided recently to log on and have a peep at how things were going in the Barclays UK Retirement Fund as there seems to be some reported activity regarding DB pensions and the high transfer values currently on offer. I was (pleasantly) surprised at the value on offer to me from the 1964 scheme and I am now considering transferring this value into my Afterwork, or possibly other, scheme - especially as the former pensions minister appears to be doing something similar.

My instinct tells me to leave the DB well alone - this was what I was always told by fellow Barclays employees as it was 'gold dust' and not to be tampered with. However, I would hate to miss out on a great opportunity as I understand the values being offered are at an all-time high (based on 15 year yields?) and are unlikely to be offered again. I understand IFA advice has to be sought where the transfer value is above £30K, I have asked if I still need to do this if I simply transfer into my Afterwork DC fund, and remain within the UKRF - Towers Watson, who are the administrators, have so far failed to come back with an answer after a week. I wonder if anyone knows the answer to this?

I appreciate I will probably need to sit down face-to-face with an IFA to discuss the implications of transferring, etc. However, if anyone has found themselves, or advised someone, in a similar situation I would appreciate some feedback. Thank you in advance.

PensionTech · 12 January 2017 at 2:29PM

You do still have to take advice even if the administrators are the same. It is the loss of the guarantees that come with a DB pension that triggers the requirement for advice.

You've understood the issues pretty well so far. What you have to consider is what kind of income you want in retirement. If you want a guaranteed, index-linked income with provision for your spouse, then a DB pension is the way to go. If you want more flexibility over your retirement income and are willing to take some risk, it could be worth transferring, but it very much depends on what kind of income you would realistically (given your own attitude to risk, and your ability to tolerate downswings - e.g. other sources of income) be able to generate from a DC pot compared to the DB.

The IFA will go through all these issues with you.

xylophone · 12 January 2017 at 3:01PM

https://www.moneyadviceservice.org.uk/en/articles/transferring-out-of-a-defined-benefit-pension-scheme

http://www.royallondon.com/Global/documents/GoodWithYourMoney/COMPANY-PENSIONS-FIVE-REASONS-TO-TRANSFER-OUT-AND-FIVE-REASONS-NOT-TO.pdf

http://www.pruadviser.co.uk/content/knowledge/technical-centre/pension_switches_transfers/

Have you obtained a new state pension statement?

https://www.gov.uk/check-state-pension

mgdavid · 12 January 2017 at 3:13PM

as with investing, an important part of pensions provision is diversification. Although you haven't quoted any figures it sounds as if you have a useful guaranteed DB pension and a useful DC pot too, so you are there already.
But I fear you are approaching this from the wrong direction, ie thoughts of a large lump sum to play with, rather than 'this is how much income I will need in retirement, how best to achieve it?'

ArchaeoNeo · 12 January 2017 at 3:58PM

Thank you for these prompt and clearly well-informed replies; I am in the right place.

I am (a very young) 52 and although I worked for Barclays I was in IT; my PhD is in Archaeology so under no circumstances am I to be left alone with my finances! Although new rules say I can walk at 55 I would prefer to wait until my NRD of 60, especially if I keep the DB pension. I am therefore committed to at least another eight years of working.

I did check my State Pension, thanks for the link - I have worked all my life but have 7 years that are 'not full' which are all down to higher education. I have to work 4 more years to get the full state pension in 2037 but I know I was opted out of SERPS for most of the time I spent with Barclays so the £155 is unlikely. I don't really understand my statements from TW but it looks like a GMP gets revalued at 65 and the pension goes up, only for it to go down again at 67 when I get my SP! I need a lie down now.

You are correct in that I am looking at lump sums when I should be looking at income, in mitigation I am a self-funded researcher who has had an eye-watering (to me) sum flashed at me. I have also been quietly content over the years knowing I have spread my investments over DB and DC schemes - perhaps I should stick with what I've got.

I'm a bit nervous at posting figures up but happy to discuss these if anyone wants to PM me

xylophone · 12 January 2017 at 5:22PM

http://forums.moneysavingexpert.com/showthread.php?t=5583351

post 8 onwards.

http://forums.moneysavingexpert.com/showthread.php?p=63517441#post63517441

Only the mention of Barclays and GMP is enough to send shivers down the spine.....:D

Bind the cold towels round the head and make your way through the above thread - I'm sure that Mike would be delighted to explain all...:rotfl:

MikeFloutier · 12 January 2017 at 6:08PM

Hi ArchaeoNeo, I'd be happy to comment on your DB offer figures privately if you think it might help; I've no experience of DC.

I think my main advice regarding dealing with Barclays/TW is to make sure you understand relevant pension law - via this forum & the Fund's scheme rules. Having started there and applied them to your figures/circumstances you need the perseverance to follow through in negotiations with TW.

The process is:

1. Understanding and applying the above.
2. Putting it firmly to TW
3. Applying to TPAS if TW reject your assertions
4. Finally the Ombudsman if all else fails

My experience and research indicate that TPAS and the Ombudsman are both reasonable whereas TW have a, not unnatural, self-interest.

Talking to other Barclays folk in similar positions has shown me that TW do need encouraging to pay up.

MikeFloutier · 12 January 2017 at 6:13PM

Also, I'd encourage you to walk through each step with the forum.

I find that the process of describing everything accurately and in detail is a great help in understanding it all.

In addition to this you also get the benefits of knowledge, safeguarding and encouragement from many highly experienced and supportive forum members.

I found it a very helpful and uplifting process.

xylophone · 12 January 2017 at 7:16PM

I found it a very helpful and uplifting process.

Almost transcendental?:)

ArchaeoNeo · 12 January 2017 at 7:52PM

Fantastic - didn't think I'd be sending a LOL! out on this forum today, but there you go!

Thanks all for your thoughts, links and wisdom. I'd like to mull over my offer with you Mike, that's very kind of you; I'll PM you either later or tomorrow. You've mentioned pension law which I know next to nothing about. I also understand that TW are actuaries and therefore have the trustees and shareholders best interests at heart, not mine.

ex-pat_scot · 13 January 2017 at 10:32AM

ArchaeoNeo wrote: »

Fantastic - didn't think I'd be sending a LOL! out on this forum today, but there you go!

Thanks all for your thoughts, links and wisdom. I'd like to mull over my offer with you Mike, that's very kind of you; I'll PM you either later or tomorrow. You've mentioned pension law which I know next to nothing about. I also understand that TW are actuaries and therefore have the trustees and shareholders best interests at heart, not mine.

The trustees should be acting in the interests of all members of the scheme, whether active, deferred or pensioner.

WTW are appointed scheme actuaries and administrator. Their duties are set out in the service contract. If you receive poor performance from them, then your escalation is to the trustees.

Defined Benefit Transfer Values

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