Advice on Defined Benefit Pension Transfers (Final Salary)
A defined benefit is also known as a final salary pension scheme Basically, retirement income is calculated according to the length of service with an employer and salary at the time of retirement. Or, at the time of leaving employment and revalued to retirement age if earlier.
Notably, if you have final salary benefits from previous employment then in many cases, leaving the scheme benefits where they are is the right things to do. However, you may choose to transfer benefits away from the scheme in exchange for a lump sum. Consequently, this is moved into a separate scheme, known as a final salary pension transfer.
Besides, this is relevant if you need your retirement income to be more flexible. An example maybe if you work part-time but need access to your retirement fund. Equally, you may need capital that cannot be met with your savings or investments. For example, if you have a mortgage that continues into your retirement which you wish to clear. Additionally, there is greater flexibility on who can benefit from your pension on death. Should you require greater flexibility, you may wish to take advice on your pension options.
Subsequently, if this is the case and your Cash Equivalent Value (CETV) is worth £30K or more then regulations stipulate you must get professional advice. Accordingly, you must seek advice from a qualified Pension Transfer Specialist (PTS) who is regulated by the Financial Conduct Authority (FCA).
How Iceni Financial Advisers can help
Thus, if you would like to know your options, we can undertake a careful analysis. Basically, this is to understand whether the lump sum offers good value for the lost benefits. This begins with us understanding your needs and objectives.
Firstly, receiving a transfer value quote and then performing a detailed analysis. Secondly, understanding what benefits you would lose if you transferred and how leaving your benefits in the scheme, or transferring, would meet your needs and objectives.
Unlike many firms, we do not outsource this process. This means that you have only one point of contact. Furthermore, any questions you may have about this process will be answered by us. Accordingly, we have a detailed understanding on exactly what is involved and the associated benefits and drawbacks. Which option is best for you depends on your circumstances and what is important to you.
Whichever type of pension scheme you have, we’ll be able to advice you on your best options.
For your free initial consultation with a fully qualified IFA, contact us today on 01603 957599.
