Reply to: Transferring Defined Benefit pension

[Hitchphil]

I did it ...........

I had a DB pension as an insurance policy that paid nothing if i died, paid for nothing but an annuity (bad value) & the annuity paid nothing after I died after retirement. The original co went bust & was asset stripped , the pension went into the Gov protection scheme so we lost 10% anyway, the deal was just bad bad bad.

I transferred it to a PP with FA advice after explaining why i wanted it out of an insurance policy. It went into CIS or what ever they are called now, the FA took the commission from CIS for selling the pension & charged me £0, i left it there a discrete year (& it grew ok too) then transferred it to SIPP as it was now a PP & not a DB & they did nto need FA to do that.

It grew massively in the SIPP. then i took 25% of my total SIPP & paid 'Her' off for the house. I now have another parallel SIPP that earns tax rebates & I recycle those rebates back in too & that fund I can take its 25% when i actually retire in not so many years now.

Every case is different but go talk to a local independent FA say what you want & offer the deal.

[ASB]

What do you mean by enhancement?

The value (38x the payout) combined with a long time to retirement make this worthwhile for me.

There were annuity comparisons in the report I got from the IFA.

For example the db scheme where i work offers an additional x% over the actuarial calculated value to encourage transfers to the dc scheme.

[Fred Bloggs]

What do you mean by enhancement?

The value (38x the payout) combined with a long time to retirement make this worthwhile for me.

There were annuity comparisons in the report I got from the IFA.

Agreed. That is close to no brainer territory.

[FrontEnder]

What do you mean by enhancement?

The value (38x the payout) combined with a long time to retirement make this worthwhile for me.

There were annuity comparisons in the report I got from the IFA.

[ASB]

Out of interest is there an enhancement being paid to the tramsfer value? This is quite common now.

Superficially transfer out of a db scheme is generally a bad idea but enhancement and personal cicumstances can make a huge difference.

It is wotgwhile getting annuity illustrations. Even though this might be inappropriate it gives a comparison base.

[FrontEnder]

Sounds like a decent plan. I avoided the other question really, my circumstances are very different to yours. So I hesitate. DYOR is my serious suggestion to you. One way or another, I've been doing this stuff for myself since the mid 1970's and I'm still learning.

Fair enough. That's basically what I plan on doing, make it my responsibility and learn as I go along. I'll be more active in it one I've learned.

I've also got a SIPP with HL, not a lot in there at the moment, just putting a regular £100 a month in, but I plan to increase this and throw the odd lump sum in when I have it available and when the time is right (wish I has some spare cash after the brexit vote!).

[Fred Bloggs]

Out of interest, what would you recommend?

The transfer is already on motion, so I'm happy for it to go in there for the time being I'll keep an eye on it and learn a bit more about investments and maybe move it again if I feel it's worth it.

Sounds like a decent plan. I avoided the other question really, my circumstances are very different to yours. So I hesitate. DYOR is my serious suggestion to you. One way or another, I've been doing this stuff for myself since the mid 1970's and I'm still learning.

[FrontEnder]

Ah, OK, sorry. I apologise. I doubt anyone here will have ever heard of it TBH. I looked it up and first impression to me is that it is a pretty vanilla international equity fund with 5% in bonds/cash and 10% in property. Not able to say much more than that really. Good luck, it wouldn't be my choice but ho hum. The hordes will be along shortly to advise a tracker. But that wouldn't be my choice either.

Out of interest, what would you recommend?

The transfer is already on motion, so I'm happy for it to go in there for the time being I'll keep an eye on it and learn a bit more about investments and maybe move it again if I feel it's worth it.

[Fred Bloggs]

I'm not looking for advice on the transfer itself, just what people think about the fund that the IFA recommended.

Ah, OK, sorry. I apologise. I doubt anyone here will have ever heard of it TBH. I looked it up and first impression to me is that it is a pretty vanilla international equity fund with 5% in bonds/cash and 10% in property. Not able to say much more than that really. Good luck, it wouldn't be my choice but ho hum. The hordes will be along shortly to advise a tracker. But that wouldn't be my choice either.

[FrontEnder]

This is where the fun starts then! Is the IFA doing the transfer for you?

Yes

Who to - direct with Royal London, or through a platform?
Direct with royal london

Is it a personal pension ie a stakeholder or such like, or a SIPP?
Pesonal pension

Are there extra charges as well as the 0.45%, and what actually is the 0.45% is it the fund charge?
It's the fun charge. No other charges, other than the pension transfer.

What about ongoing fees for the IFA? What about platform fees?
No and no. They offered ongoing management for an annual %, which I declined.

How large is the transfer value (only approx) and how many x is it of the GBP 8600 benefit?

Details are in the opening post. £8600 is the projected value as it increases with inflation each year, £3800 is the current value

How long do you have to retirement?
As above, over 30 years.

Do you have other pension savings as well?

Yes, What are your targets and at what age? What is your attitude to risk? All this would be nice to understand then you can work from there.... HTH.

I'm not looking for advice on the transfer itself, just what people think about the fund that the IFA recommended.

[Fred Bloggs]

Had the full advice report etc from the IFA who was happy to recommend transferring out.

Estimated value at retirement age of the old pension is about £8600, so acheive this in a personal pension, the "critical yield" is just 4.4%, so I think I've made the right choice.

So a question for the more experienced investors - the fund reccommended to be placed in is the Royal London Governed portfolio 7. Thoughts on this?

Seems a good choice, low fees (0.45% for the amount I have), moderately adventurous/adventurous profile (I'm 30+ from retirement age, so volatility doesn't matter so much).

This is where the fun starts then! Is the IFA doing the transfer for you? Who to - direct with Royal London, or through a platform? Is it a personal pension ie a stakeholder or such like, or a SIPP? Are there extra charges as well as the 0.45%, and what actually is the 0.45% is it the fund charge? What about ongoing fees for the IFA? What about platform fees? How large is the transfer value (only approx) and how many x is it of the GBP 8600 benefit? How long do you have to retirement? Do you have other pension savings as well? What are your targets and at what age? What is your attitude to risk? All this would be nice to understand then you can work from there.... HTH.

[FrontEnder]

Had the full advice report etc from the IFA who was happy to recommend transferring out.

Estimated value at retirement age of the old pension is about £8600, so acheive this in a personal pension, the "critical yield" is just 4.4%, so I think I've made the right choice.

So a question for the more experienced investors - the fund reccommended to be placed in is the Royal London Governed portfolio 7. Thoughts on this?

Seems a good choice, low fees (0.45% for the amount I have), moderately adventurous/adventurous profile (I'm 30+ from retirement age, so volatility doesn't matter so much).

[zoomfwd]

Transferring Defined Benefit pension

Tideway feature heavily on the web and have been quoted in a number of newspaper articles I've seen

Their blurb says the charge 1% if they recommend a transfer and no charge if they don't - with no commitment to use them to manage the funds on an ongoing basis.

If I was unsure on the best way forward there is no way I would use them but if I was convinced I wanted to do the transfer then they sound like a cheap way of facilitating it

[FrontEnder]

Spoke to a local IFA this morning, who sounded positive about doing the transfer. Will need do the full assessment, but based on the transfer value I've been given, should be doable.

3% fee though, which seems steep.

[mackenzie99d]

Most IFAs are affiliated with a specialist transfer company so just ask your IFA. The one I used wasn't great as they took 6 months.
Having said that the transfer value increased 10% during that time so it worked out well!! A friend of mine just
got his transferred in 6 weeks. It's nice little business to be in as all they really do is write to your pension company
and then put the details into some software that produces 1 page of decent info and about 20 pages of BS projections.
They will then tell you not to transfer your pension and you go back and forth and overrule them etc. It probably takes them
about 2 hours in total start to finish. Some charge a % of the transfer value and some charge a fixed amount.