Moving pension - provider demanding IFA details

[Warpedfrailty]

So I'm moving my workplace pension from my last workplace provider to my current workplace provider. It is a much better pension and very stable which cannot be said of my previous employer.

However my previous scheme are insisting that I have to send them details of my Independent Financial Advisor and their confirmation that they have provided me with advice regarding this pension transfer. Do they have the right to demand this? I guess it could be a legal requirement?

I don't have an IFA and am moving it after doing my own research from various sites.

Any advice would be welcome.

Have you told them you don't have an IFA?

Is it a final salary pension?

Is it an DB/FS pension that you want to transfer, and is the CETV greater than £30K?
That would trigger the legal requirement of IFA advice - and not any IFA, but one who holds the additional insurance to advise on DB transfers.

I think a new provider could still ask you to take advice from an IFA for a DC, no form wants to be the future latest investigation into pension mis-selling!

It might just be a box to add IFA if you have one, but is OK to leave blank. Ask the new provider?

*no firm wants

If it is DC, I’m curious that you say one is more stable than the other. Do you not have some choice in the funds that you’re invested in? I don’t think many DC pensions would win points for stability this year 🙈😷
Mine’s been up and down (mainly down 😫) quite dramatically.

It may be that the pension holds some guarantees, guaranteed anuuity, enhance tax free cash etc

This may have warranted it. Unusual for a standard DC pension to request advice to transfer.

To answer some questions it is a final salary scheme run by my previous workplace. It is my previous workplace that is demanding the IFA approval, not the scheme I am moving to.

They won't confirm the amount with me but always insist on IFA so I assume it is over £30k.

I have been trying to move my pension for well over a year now and they have stalled and stalled. They said they they had all the paperwork and I needed to wait for the payment, then they said the trustees told them not to make any payments at all, then they decide that they don't have all the paperwork despite me calling them and them assuring me on several occasions that all the paperwork is in hand!

I am moving to the Civil Service from a retailer. I believe from research that the Civil Service is far better than a retailer at this time especially as they have tried every avenue not to transfer the pension.

@warpedfrailty

That is standard practice I am afriad.

Comparing DB schemes is a very detailed process, so without full assessment of both schemes PLUS your personal circumstances an IFA can not make a recomendation.

Moving these schems is very high risk for an IFA, so finding one may be a challege, especially given the impending contingent charging.

@fromdownwest

Thanks, I'm grateful for the clarity.

I don’t think you can easily transfer one DB pension to another. You are likely to lose valuable benefits that you can never replace. That’s why you need advice.

Why do you think your existing DB pension isn’t “very stable”? It gives you a guaranteed defined benefit. I suppose it could go into PPF, unlike CSP, but DB pensions are not generally considered unstable!

Why do you think the Civil Service pension is better? Have you done any research on what your transfer in would buy? You don’t just take (say) 5 years of existing scheme and get credited 5 years of new scheme.

It is, as several of us have said, a legal requirement with DB schemes over £30K to have IFA advice. Expect to pay thousands for these by the way - the insurance for transfer qualified IFAs is high let alone the workload for a case.

I recommend MSE forum for DB transfers information. You definitely need to do more research, as the requirement for an IFA is pretty basic stuff - which suggests your research wasn’t very wide. So I definitely recommend MSE to help with that!

Something else to consider... are you likely to want to retire early, and if so will you have anything to bridge that?
Once you transfer in, if you start your CSP early, it will be reduced.
If you have a second pension, it could be possible to take that at a reduced rate first, allowing you to preserve your CSP at it’s full rate for later.
It’s not a bad thing to have more than one pension!

The Civil Service pension scheme isn't as good as it used to be, I was lucky, I got out in 2010 & got my pension on ill health grounds in 2012, I got the final salary scheme, enhanced to 30 years. New entrants even when I was still working were starting in a new scheme where terms & conditions were nowhere near as good as mine & the contributions were much higher. I only paid 1.5% for a widows & orphans pension, as I was luckily divorced when I started my pension, I got all my contributions repaid.

@Warpedfrailty When you say you are waiting for paperwork and you don't know the figures, what exactly have you asked for?

You need to request a Cash Equivalent Transfer Value statement to establish the transfer value on offer. You really also need a statement of benefits so you have an idea of how much income you could expect from the scheme at normal retirement date.

If the transfer value is higher than £30k then you cannot move anything without appropriate advice. If it is lower than £30k you will still be expected to have sought guidance from either an IFA or a free service such as Pensionwise or MAPS.

If you're not yet 55 and have no compelling reasons to transfer out then it is highly unlikely that any reputable adviser would support a transfer.