Defined Benefit Pension Transfers – FAQs

What is a pension transfer?

A pension transfer is where either a Defined Benefit Final Salary pension scheme or arrangement with Safeguarded Benefits is transferred into a Personal Pension.

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To talk to one of our expert retirement planners today and arrange a free, no-obligation initial meeting, please contact our office on:

0115 981 95 29

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Why transfer this type of arrangement?

There are a large number of reasons why a transfer could be in the best interests of an individual with this type of pension, such as greater flexibility, generational planning, control of tax planning and many others. There are equally a large number of reasons why a transfer may not be in your best interests such as loss of important guarantees and increased investment risk, so professional advice is essential.

Each individual’s circumstances differ and a transfer may not be appropriate for everyone. Always check if your scheme offers a partial transfer as it may be that you can elect to transfer some, but not all, of your scheme benefits therefore securing the ‘best of both worlds’ – guaranteed income and non-secured income.

What are the risks of not considering a transfer?

As Financial Planners, our regulators – the Financial Conduct Authority – expect us to take into account all aspects of your situation when providing advice. Ignoring a pension on the assumption that a transfer is probably not appropriate is not acceptable, particularly in light of the new pension’s freedom rules and the greater flexibility they bring.

What is a Transfer Value Analysis Report? (TVAS)

A TVAS report is vital in helping us determine whether transferring your defined benefits scheme is the right option for you. The report gives us an indication of the investment returns that would be required after transferring into a personal pension scheme to match the benefits you are giving up from your defined benefits scheme after all costs and charges are taken into account, as well as assumed investment returns.

How long does a pension transfer take?

This ultimately depends on the existing scheme and their timescales for firstly providing a transfer value and then processing the transfer itself. Our experience is that the transfer process can typically take from 1-3 months for completion and sometimes longer, as this is a highly complex area of advice.

As part of our service we will regularly chase the pension schemes for progress updates and relay these back to you.

What happens if you decide a transfer is not right for me?

Once our analysis has been completed we will reach a firm decision as to whether we think transferring your defined benefit scheme is right for you.

If we do not believe that transferring is in your best interests then we shall report this to you and will not proceed with processing any transfers pending further discussions.

What are your fees for defined benefit transfers advice and implementation?

Our initial discovery meeting would be at our own cost. This would simply be an opportunity to provide a detailed overview of our company service and to discuss the generic details of what a pension transfer consists of and a discussion of your retirement planning requirements. We would also include a quotation on likely costs involved in the process.

If we decide to progress to the next stage, we will allocate a ‘Pension Transfer Specialist’ and provide a more detailed analysis which would compare the benefits of your existing Final Salary Pension arrangements with a possible ‘Transfer-out’ in order to determine whether a transfer would be a feasible option for you. The Transfer Analysis Report will typically be charged on a fixed, non-refundable fee of £1,500 and will not be contingent on a Transfer-out being recommended (though in the event that a Transfer is recommended we would offset this fee against our implementation fee).

Where we deem a Transfer to be appropriate, your Pension Transfer Specialist will then provide a detailed report outlining all aspects of our advice in relation to the Transfer, including the identification of an appropriate Pension vehicle and a suitable investment strategy and provide full implementation of these recommendations. Our fees for this work are a fixed percentage of the Transfer Value which is agreed at outset. Our fee schedule outlines our usual terms however we will take into consideration the size of the fund when we quote.

To talk to one of our expert retirement planners today and arrange a free, no-obligation initial meeting, please contact our office on 0115 981 95 29
or e-mail us at: [email protected]