TRANSFERRING OUT OF A FINAL SALARY SCHEME IS UNLIKELY TO BE IN THE BEST INTERESTS OF MOST PEOPLE.
Harbour Wealth Management is qualified and experienced in Company Defined Benefit Scheme Transfers. Our fees are competitive, and we offer a high-quality service.
What you can and can’t transfer
If you’re in an ‘unfunded’ public sector pension scheme, for example a Teachers or NHS scheme, you won’t be able to transfer your pensions.
You will be able to transfer your pension if you’re in a Private sector defined benefit scheme or a Public Funded sector pension scheme such as a local government pension. There are certain safeguards in place for these schemes.
How a pension transfer works
If you decide to transfer out of your workplace defined pension scheme, the trustees who run the scheme convert the benefits you’ve built up into a cash sum.
This is called a ‘transfer value’ or ‘cash-equivalent value’ (CETV).
You must then invest this in a:
- Personal or Stakeholder pension
- Pension Scheme with another employer
- Self-invested personal (SIPPs)
Not all employer pension schemes, personal pensions or SIPPs accepts transfers. Your adviser can advise you on this.
Risks of staying in your defined benefit scheme
Staying in a defined benefit pension scheme is not risk-free.
If your employer is still in business, it usually has to make sure the scheme has enough funds to provide the full entitlement to members.
But some employers sponsoring these schemes have gone bust, not leaving enough money to pay the pensions promised.
If an employer is going out of business without enough funds in its pensions scheme, the Pension Protection Fund might be able to provide compensation, but this might not be the ful amount of the pension you’ve accumulated.
Getting help
If the value of your Defined Benefit pension Scheme is £30,000 or above, you’ll have to take advice from a regulated financial adviser before you can transfer.
The rule is there to protect you and make sure that you’re aware of all the pros and cons of transferring.
Even if the value of your scheme is below £30,000, it’s a good idea to take advice.
If you do take regulated advice and things go wrong, or it ends up being the wrong choice for you, you’ll be able to use the complaints and compensation schemes available.
Please see the Harbour Wealth Management Terms of Business and Privacy Notice for more information on making complaints.
When you ask your pension scheme trustees about pension transfers, the information you get will be about pension transfers in general and won’t be specific to your needs and circumstances.
Firms advising on transferring your defined benefit pensions to a defined contribution pension must have specialist knowledge in this area. Harbour Wealth Management is qualified and experienced in transferring defined benefit pensions.
The risks of transferring a defined contribution scheme
Any potential advantages of transferring from a defined benefit pension scheme to a defined contribution one can be outweighed by the costs, risks and loss of benefits. Your future pension income can’t be predicted with any certainty if you transfer to a defined contribution scheme, regardless of whether it’s run by your employer or it’s a personal or stakeholder pension.
What to expect from us
We will discuss your personal circumstances and financial position with you, including the level of risk you feel comfortable with. We will then, with your permission, approach the trustees who run your scheme and request all the relevant and up to date information required to make an informed decision as to whether to transfer and to enable us to transfer your pension should this be the best course of action for you.
We will compare the benefits you might give up if you transfer out of your employers’ scheme and with the benefits you might get if you transfer in to a new employers’ scheme or personal/stakeholder pension.
We will then assess the level to which your employers’ pension scheme is funded, the risk that your benefits might be reduced and the effect on any transfer value offered.
It is a good idea to involve your partner as the options you choose may affect them as well. With all the required information we will then check the full range of options available to you and produce a recommendation that best meets your needs.
If you have any queries regarding your company pension please do not hesitate to contact us.
TRANSFERRING OUT OF A FINAL SALARY SCHEME IS UNLIKELY TO BE IN THE BEST INTERESTS OF MOST PEOPLE.
Harbour Wealth Management is qualified and experienced in Company Defined Benefit Scheme Transfers. Our fees are competitive, and we offer a high-quality service.
What you can and can’t transfer
If you’re in an ‘unfunded’ public sector pension scheme, for example a Teachers or NHS scheme, you won’t be able to transfer your pensions.
You will be able to transfer your pension if you’re in a Private sector defined benefit scheme or a Public Funded sector pension scheme such as a local government pension. There are certain safeguards in place for these schemes.
How a pension transfer works
If you decide to transfer out of your workplace defined pension scheme, the trustees who run the scheme convert the benefits you’ve built up into a cash sum.
This is called a ‘transfer value’ or ‘cash-equivalent value’ (CETV).
You must then invest this in a:
- Personal or Stakeholder pension
- Pension Scheme with another employer
- Self-invested personal (SIPPs)
Not all employer pension schemes, personal pensions or SIPPs accepts transfers. Your adviser can advise you on this.
Risks of staying in your defined benefit scheme
Staying in a defined benefit pension scheme is not risk-free.
If your employer is still in business, it usually has to make sure the scheme has enough funds to provide the full entitlement to members.
But some employers sponsoring these schemes have gone bust, not leaving enough money to pay the pensions promised.
If an employer is going out of business without enough funds in its pensions scheme, the Pension Protection Fund might be able to provide compensation, but this might not be the ful amount of the pension you’ve accumulated.
Getting help
If the value of your Defined Benefit pension Scheme is £30,000 or above, you’ll have to take advice from a regulated financial adviser before you can transfer.
The rule is there to protect you and make sure that you’re aware of all the pros and cons of transferring.
Even if the value of your scheme is below £30,000, it’s a good idea to take advice.
If you do take regulated advice and things go wrong, or it ends up being the wrong choice for you, you’ll be able to use the complaints and compensation schemes available.
Please see the Harbour Wealth Management Terms of Business and Privacy Notice for more information on making complaints.
When you ask your pension scheme trustees about pension transfers, the information you get will be about pension transfers in general and won’t be specific to your needs and circumstances.
Firms advising on transferring your defined benefit pensions to a defined contribution pension must have specialist knowledge in this area. Harbour Wealth Management is qualified and experienced in transferring defined benefit pensions.
The risks of transferring a defined contribution scheme
Any potential advantages of transferring from a defined benefit pension scheme to a defined contribution one can be outweighed by the costs, risks and loss of benefits. Your future pension income can’t be predicted with any certainty if you transfer to a defined contribution scheme, regardless of whether it’s run by your employer or it’s a personal or stakeholder pension.
What to expect from us
We will discuss your personal circumstances and financial position with you, including the level of risk you feel comfortable with. We will then, with your permission, approach the trustees who run your scheme and request all the relevant and up to date information required to make an informed decision as to whether to transfer and to enable us to transfer your pension should this be the best course of action for you.
We will compare the benefits you might give up if you transfer out of your employers’ scheme and with the benefits you might get if you transfer in to a new employers’ scheme or personal/stakeholder pension.
We will then assess the level to which your employers’ pension scheme is funded, the risk that your benefits might be reduced and the effect on any transfer value offered.
It is a good idea to involve your partner as the options you choose may affect them as well. With all the required information we will then check the full range of options available to you and produce a recommendation that best meets your needs.
If you have any queries regarding your company pension please do not hesitate to contact us.
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