Potential Transfers from a Defined Benefit ‘Final Salary’ Pension
Defined Benefit pension reviews and transfers can be complex, and often clients do not appreciate the time and expertise that go into the analysis of the benefits. Here is a summary of our process:
We will request that your current Pension Scheme provide us with an explanation of what you would receive at their normal retirement date, along with a Cash Equivalent Transfer Value (CETV), an amount of money that can be transferred to another scheme.
We will complete with you a questionnaire about your current situation, other plans that you have and what you hope to achieve in the future. We will also discuss your attitude to investment risk and between us, we will obtain information on your likely State Retirement Pension.
We will then complete a detailed analysis of the current scheme compared to other options, which may involve getting further information from the existing scheme and other providers. Once we have formulated our advice, we will submit it to our Compliance department so they can confirm the suitability of the advice, to give you the reassurance that the advice to you is correct. The advice will be provided to you in writing, along with Cashflow forecasts, illustrations and an application form if we are recommending a transfer.
Please be aware of the following:
- The CETV is guaranteed for 3 months from the issue date. After that date, the transfer value can rise or fall.
- As you will appreciate, there is a lot of work for us to complete on this type of transfer and in a lot of cases it is not possible to complete everything within the three months and therefore another CETV may be required.
- A scheme is only obliged to provide one CETV each year, therefore they will most likely charge you for a new valuation. That charge is normally a minimum of £300.00
- Please be aware that a new CETV value may be significantly lower depending on market conditions at the time of a request
Whilst we will endeavour to provide the advice within the guarantee period, we cannot be held responsible should the guarantee period expire and the CETV fall in value.
If a transfer is recommended, the process normally takes between 3 and 6 months for the funds to be transferred to the recommended provider. This is considerably longer than a Personal pension transfer (usually around 6 weeks), given the high-level checks that have to be done by the scheme actuaries.
Need to Know More?
If you would like to know what this means for you, or you’re looking for pension advice, please get in touch with one of the Gilker Flynn team. We have years of experience and are well equipped to provide independent financial advice.