Transfer Value from final salary pension

[concretejungle]

Hi

I've been thinking about transferring my accrued benefits in my ex-employers final salary scheme to a defined conts pension

I got a quote, which looks good at 30x value of annual pension.

I know I need advice, however having made enquiries it's extortionate!!

Company A (big nationwide business) charges are 1.5k + a fee based on value of transfer which would be 7k.

This company are a big name in the industry, so I though a smaller local firm might be better value...., Company B charges are 2.5k + a fee based on transfer value that would be 15k.

Anyone else been through the advice process who can give me an idea of what they paid?

Thanks

No experience of companies who provide advice, but you absolutely should take proper advice before doing this. It is highly unlikely that it is in your interests transfer a final salary pension.

Get professional independent advice as from what I’ve heard generally it’s never a good idea to leave a final salary scheme

I’ve heard it too that it’s never a good idea. Also, you could have pension from different sources without a problem.

I’m sorry as I haven’t been through the process myself but not sure what exactly the company would charge for?

When you say it looks good at 30x annual pension is that the annual pension when you left the scheme, revalued to now or projected to normal retirement date and how long have you got to go till retirement? If there is a while to go between the effective date of the annual pension and your retirement date then 30x is not as good as it looks. Have you checked annuity rates for your normal retirement age (remember to look for the rates with the pension increases and spouse's pension that you want)

I would look for someone who charges straight hourly fees for advice. At least you know the advice if unbiased in terms of transfer or not.

I do DB Transfers. That fee sounds about right.

You have no idea of the work involved the CPD, the PI liability, the FCA reporting requirements. I hold additional licences and have advanced qualifications to do this work.

1.5% is my minimum and I'm pretty reasonable. I charge that if it's £1.5M - my liabilities are huge and life long.

However a few things to consider:

30 x is not 'great' value. It's OK.
Your age will be relevant. 55 is far more attractive, but it's about individual circumstances.
If this is your only pension, why do it?
What the funding position? >90% is basically fully funded. What's the sponsoring employers position?
What are the death benefits? 66% / 50%, is that even relevant?
What's your experience of investing? Can you 'ride out' a crash without panicking?

THIS IS A ONE WAY STREET. Yep I'm shouting. You decide you don't like it and employ an ambulance chaser (who'll be out in force in 10'years time). The IFA will go bankrupt and you won't get fuck all. Be warned, you're not dealing with Lloyds Bank and billions of reserves here. This decision will last you for the rest of your life ..,, and the IFA that does it.

I think if you've got a good adviser, you've found yourself a bargain.

I should add, non-contingent charging (ie charging for the work done) is FCA recommended conduct.

I charge £1.5k for an assessment, even if you don't go ahead. I'm liable for a don't do it advice too! If it goes into the PPF and you sue me, I have to insure myself for that advice.

Toxic stuff and there aren't really any winners!

Don't what ever you do use SJP - make sure they are Independent. Their charges are horrible.

Got a bit agitated there

I second that re SJP.

Try a google search in your local area, check reviews, the relevant qualifications and also whether or not you trust that person to advise you on your money. Are you convinced they have your best interests at heart?

I hope that helps.

Jeepers, my phone is now flashing up Final Salary Transfer adverts! Big brother is watching

Agree with dontcallmethat this is an extremely technical area and the decision will last a lifetime - not one to skimp on.

I calculate cetvs for db schemes. It's very rare for someone to be better off transferring it to a dc scheme.

I calculate cetvs for db schemes. It's very rare for someone to be better off transferring it to a dc scheme.

Some of them are actively shedding liabilities and CETV's are at 50 x pension. I've seen lots over 40, many at 35, LOADS at 22 - 26 and rudest of all 13 times. It really does depend on the scheme.

Thank you all so much. I'll reply properly tomorrow....

In the meantime the cetv is 34 x the annual pension. I'm "only" 40 so a long way from retirement

Why do I want to think about this? I reckon that a well chosen investment strategy can outperform an increase in annual pension of rpi. And, preserve the capital at point of drawdown - i.e. I live off the investment performance and pass the capital in as inheritance.

Xx

Is that pension in 'todays' money or at leaving? Assuming they are different?