michaelc
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Post by michaelc on Dec 21, 2019 16:19:07 GMT
Also worth looking at the lemonfool. Some excellent people on there. Here’s a recent thread concerning a similar DB transfer problem. www.lemonfool.co.uk/viewtopic.php?f=17&t=20653take some time to look through that board, it should give you some good pointers. Thanks a lot for that !! Does seem quite relevant and that's the second recommendation I've had for that forum recently so think I'll have a general poke around.
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upperdeane
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Post by upperdeane on Dec 21, 2019 16:30:45 GMT
Thanks for the suggestions. I've looked back and my defined benefit is almost certainly worth a lot less than 30K but the pension as a whole is a lot more. If they've told me I need financial advice to move any part of the pension out is there nothing I can do? I'm particularly annoyed because my pension represents about 1% of the entire value of the fund it is invested in and the fees are high. There is also virtually no choice over what funds I can invest in. Cash, an equities fund and a couple of other funds and thats it. So frustrating they can use a tiny part of the pension to stop me transferring any of it out ! Ask for a benefits illustration and a transfer value. Indeed, once you have a transfer value in writing, if over the £30k threshold you will need to go to either a "whole of market" IFA, or a financial adviser linked to a specific pension company (e.g. Prudential have Pru Advisers). I've helped several people transfer some large DB's schemes over the past couple of years but you have to haggle hard on the transfer fee costs which will seem mentally high at first, but you can get a SIGNIFICANT discount by haggling. It all depends on the transfer value and if you wish to self manage moving forward or pay the advisory ongoing management fees a also. They will all try and get you to take the ongoing management option which will provide them an ongoing revenue stream, but if you are confident managing your own pension when transferred you can save yourself a chunk of money over the years. However, having ongoing financial advise from an adviser can be beneficial for some people, so don't automatically discount that option. Note, it doesn't makes sense for everyone, to move out of the existing DB scheme, but for some its a no brainier - this is the reason the government want to make sure you are doing the right thing on larger pension pots and insist on advice to try and protect you from making wrong decisions. Hope this helps.
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Godanubis
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Post by Godanubis on Dec 21, 2019 18:59:12 GMT
If you are just over the 30k DB threshold and have control over the fund it could be beneficial to reinvest to bring value to just below the 30K and withdraw without what could be a several thousand advice fee. Do you have the first clue of how defined benefit schemes works!!! Your comment suggests you don’t. And the OP liked it! A scheme member has no say in the investment management of the underlying DB fund. Furthermore the value and performance of the investments have no impact on the CETV. The CETV is formula driven by factors such as gilt yield, longevity predictions and future expected investment returns. So all that is required is for michaelc to - drive up gilt yields or - decrease the expected lifespan of the UK population or - increase the future expected investment returns. So to borrow from Godanubis ‘s playbook. Don’t care about understanding or knowing how different pensions schemes work. Just GET IT TRANSFERRED. It’s taking far too long. I don’t really care who is to blame just “GET COLLATERAL SORTED “ Get current funds distributed and then work on compensation etc. This is taking far too long. Yes I do understand the benefit is defined as to what is paid and depending on investment if appropriate based on a proportion of overall investment . The amount varies with the pot in a funded rather than unfunded ie NHS scheme . I have had friends able to move pension when markets were lower with DB portion fell below 30k. As a personal note I managed to get my full NHS pension including DB out. I did require to get official sign off of DB portion as it was in excess of 30k
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Godanubis
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Post by Godanubis on Dec 21, 2019 19:10:45 GMT
DB ok for those with dependants NHS was great if I had family I currently take what I require after transferring it out to minimise tax and reinvest in tax free investments for future use before state pension kicks in and reduces amount of tax free income. It is currently making more than twice what my NHS pension would have paid and I still have few hundred of thousands I can take extra at anytime if really required by paying appropriate tax.
As stated by others negotiate your fee for advice especially if you know what you want to do with fund beforehand.
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Godanubis
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Post by Godanubis on Dec 21, 2019 19:19:27 GMT
If you are just over the 30k DB threshold and have control over the fund it could be beneficial to reinvest to bring value to just below the 30K and withdraw without what could be a several thousand advice fee. Do you have the first clue of how defined benefit schemes works!!! Your comment suggests you don’t. And the OP liked it! A scheme member has no say in the investment management of the underlying DB fund. Furthermore the value and performance of the investments have no impact on the CETV. The CETV is formula driven by factors such as gilt yield, longevity predictions and future expected investment returns. So all that is required is for michaelc to - drive up gilt yields or - decrease the expected lifespan of the UK population or - increase the future expected investment returns. So to borrow from Godanubis ‘s playbook. Don’t care about understanding or knowing how different pensions schemes work. Just GET IT TRANSFERRED. It’s taking far too long. I don’t really care who is to blame just “GET COLLATERAL SORTED “ Get current funds distributed and then work on compensation etc. This is taking far too long. As you highlighted I said you need to have control. There are many businesses that control their own pension schemes and have different pension choices that members can choose with the possibility of scheme transfer internally. As for getting things sorted I think you missed the satirical references.
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michaelc
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Post by michaelc on Dec 21, 2019 21:35:50 GMT
Often there is scheme administrator (Mercer, Capita, etc) with reasonably good website with key functionality. There’d be a specific account for each member and some potentially helpful valuations on there. For your scheme and account you’d need two valuations. If you’re lucky both might be on the scheme administrators website. - The DC value of the investment units at prices at close of last business day say. - The DB underpin illustrative value based on the end of the previous month variables, say. Whilst a website valuation of DB is not a binding CETV it’d give you a good idea of likely value give or take a bit depending on gilt volatility. Right I've done this and you are quite right! It is run by Mercer and on the front page shows both defined contribution and defined benefit plans. Until today, I'd always ignored the defined benefit section. It shows the value of the defined contribution plan as a big sum (not _that_ big but quite a lot to me !) and then it shows the defined benefit value as "£54.60 a year as at 31/12/2012" . How the heck can that be worth 30 K ? When I click into more details it gives this info: Post 5.4.1988 GMP at Date of Exit £54.60 Total GMP at Date of Exit £54.60 Deferred RST Pension at Date of Exit £4,717.44 Post09 Escalating Pension @ DOE £1,474.20 Does this all mean I should be able to move at least the defined contribution part? For £56 a year I really don't care about moving that and it seems the law is an ass if it is making me spend thousands for "advice" just because of that tiny pension. P.S. THanks very much to all for useful and interesting contributions to this thread!
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michaelc
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Post by michaelc on Dec 21, 2019 22:47:51 GMT
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starfished
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Post by starfished on Dec 22, 2019 14:00:01 GMT
Often there is scheme administrator (Mercer, Capita, etc) with reasonably good website with key functionality. There’d be a specific account for each member and some potentially helpful valuations on there. For your scheme and account you’d need two valuations. If you’re lucky both might be on the scheme administrators website. - The DC value of the investment units at prices at close of last business day say. - The DB underpin illustrative value based on the end of the previous month variables, say. Whilst a website valuation of DB is not a binding CETV it’d give you a good idea of likely value give or take a bit depending on gilt volatility. Right I've done this and you are quite right! It is run by Mercer and on the front page shows both defined contribution and defined benefit plans. Until today, I'd always ignored the defined benefit section. It shows the value of the defined contribution plan as a big sum (not _that_ big but quite a lot to me !) and then it shows the defined benefit value as "£54.60 a year as at 31/12/2012" . How the heck can that be worth 30 K ? When I click into more details it gives this info: Post 5.4.1988 GMP at Date of Exit £54.60 Total GMP at Date of Exit £54.60 Deferred RST Pension at Date of Exit £4,717.44 Post09 Escalating Pension @ DOE £1,474.20 Does this all mean I should be able to move at least the defined contribution part? For £56 a year I really don't care about moving that and it seems the law is an ass if it is making me spend thousands for "advice" just because of that tiny pension. P.S. THanks very much to all for useful and interesting contributions to this thread! Isn't the relevant bit the Reference scheme test pension amount rather than just the GMP bit?
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michaelc
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Post by michaelc on Dec 22, 2019 23:01:49 GMT
Right I've done this and you are quite right! It is run by Mercer and on the front page shows both defined contribution and defined benefit plans. Until today, I'd always ignored the defined benefit section. It shows the value of the defined contribution plan as a big sum (not _that_ big but quite a lot to me !) and then it shows the defined benefit value as "£54.60 a year as at 31/12/2012" . How the heck can that be worth 30 K ? When I click into more details it gives this info: Post 5.4.1988 GMP at Date of Exit £54.60 Total GMP at Date of Exit £54.60 Deferred RST Pension at Date of Exit £4,717.44 Post09 Escalating Pension @ DOE £1,474.20 Does this all mean I should be able to move at least the defined contribution part? For £56 a year I really don't care about moving that and it seems the law is an ass if it is making me spend thousands for "advice" just because of that tiny pension. P.S. THanks very much to all for useful and interesting contributions to this thread! Isn't the relevant bit the Reference scheme test pension amount rather than just the GMP bit? Arghh I don't know what these acronyms mean but is your suggestion that this element of the pension could be worth more than 30K ?
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michaelc
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Post by michaelc on Dec 22, 2019 23:08:25 GMT
I wrote something then deleted it as I concluded I shouldn’t get drawn into commenting on a matter where I don’t have sufficient details and it’d be easy for me to misinterpret the situation based on second hand snippets. Thanks a lot anyway for you contribution. That is a shame you spent the time with a no doubt interesting/useful reply but then tantalisingly redacted the lot. I would certainly be interested to hear your opinion either in thread or via PM but understand if you'd rather not.
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Post by bracknellboy on Dec 23, 2019 8:48:23 GMT
Right I've done this and you are quite right! It is run by Mercer and on the front page shows both defined contribution and defined benefit plans. Until today, I'd always ignored the defined benefit section. It shows the value of the defined contribution plan as a big sum (not _that_ big but quite a lot to me !) and then it shows the defined benefit value as "£54.60 a year as at 31/12/2012" . How the heck can that be worth 30 K ? When I click into more details it gives this info: Post 5.4.1988 GMP at Date of Exit £54.60 Total GMP at Date of Exit £54.60 Deferred RST Pension at Date of Exit £4,717.44 Post09 Escalating Pension @ DOE £1,474.20 Does this all mean I should be able to move at least the defined contribution part? For £56 a year I really don't care about moving that and it seems the law is an ass if it is making me spend thousands for "advice" just because of that tiny pension. P.S. THanks very much to all for useful and interesting contributions to this thread! Isn't the relevant bit the Reference scheme test pension amount rather than just the GMP bit? There will be people on here that know far more than me on this (or indeed anything else). But based on a little knowledge gained from my own deferred DB pension scheme and other bits of knowledge: GMP = Guaranteed minimum pension. This is a small part of your pension which is related to opt out of SERPS. Schemes / members used to have the choice to opt out of the State Earnings Related Pension in exchange for reduced NI contributions. In exchange the provider had to provide a "GMP". This is not directly related to your actual DB at all I believe, purely derived from the value of your opted out NI. Its going to be only a small part of your DB scheme (EDIT: normally, unless your pay was v. low/your scheme was ***p).
I dion't know what the "RST" and POST0o9 escalating are. What you need I suggest is the per annum pension amount, which might be one of those. I suspect for transfer value purposes - the £30k test - they /might/ use the same multiplier that is used for LTA purposes i.e. x20 the annual pension value. Or they might use something which is far more reflective of real world annuity rates, which will be greater than that.
EDIT: IF the Post09 Escalating at DOE is in fact the annual value of your DB pension at date of leaving (exit), then it wouldn't take much in the way of subsequent index uplift to get it to a pont where x20 > £30k. But I don't know that is what it means, and I would have expected your latest pension statement to give a current value as well as a value on date of exit.
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starfished
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Post by starfished on Dec 23, 2019 17:00:41 GMT
Isn't the relevant bit the Reference scheme test pension amount rather than just the GMP bit? Arghh I don't know what these acronyms mean but is your suggestion that this element of the pension could be worth more than 30K ? Dees is right it is dangerous to comment on this with such limited information... However what I will say is: GMP typically means guaranteed minimum pension which is the minimum amount a scheme had to offer an individual for their pre 1997 NI contributions. Usually small relative to the rest of their pension accrued. RST standards for reference scheme test and related to the minimum DB annual pensions amount the scheme had to offer the individual for their post 1997 NI contributions based on how the scheme "contracted out" All reasonably complicated, so the scheme and individuals details is key. E.g. how does it increase in payment? etc. Worth some specialised advice/guidance in my view. A 4k a year DB pension increasing is easily worth more than 30k transfer value (from the scheme's point of view)
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michaelc
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Post by michaelc on Dec 29, 2019 0:17:27 GMT
Still looking at this but now I discover most of my pension is invested in this fund: www.aegon.co.uk/content/dam/ukpaw/hidden/Standard_B5SHMS9.pdfFair enough, but what I don't understand is how can I track this fund on the usual sites like Trustnet and Morningstar etc ? There appears to be no reference numbers or other way to identify it. On the face of it it seems to be doing quite well but to non-financial folk like me, it all seems very opaque. Edit: No doubt part or most of the reason for the apparent good performance is due to the dollar gain against sterling.
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r00lish67
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Post by r00lish67 on Dec 29, 2019 10:24:28 GMT
Still looking at this but now I discover most of my pension is invested in this fund: www.aegon.co.uk/content/dam/ukpaw/hidden/Standard_B5SHMS9.pdfFair enough, but what I don't understand is how can I track this fund on the usual sites like Trustnet and Morningstar etc ? There appears to be no reference numbers or other way to identify it. On the face of it it seems to be doing quite well but to non-financial folk like me, it all seems very opaque. Edit: No doubt part or most of the reason for the apparent good performance is due to the dollar gain against sterling. Had a look at the fundsheet out of interest. What you have there is what looks very much like a closeted index tracker i.e. it's basically a bog standard passive global index tracker that's pretending to be actively managed. At first glance the returns actually seem slightly better, but then this fund reinvests dividends rather than paying them out. In fairness, the total charges on the fund at 0.73% aren't the worst I've seen, although three times what Vanguard charge ( VWRL = 0.22%). And yep, like everyone else exposed to global equities, some of the gain is GBPUSD, although nowhere near all of it. edit: I don't know how to track that fund specifically either, but you could just look at VWRL (other passive global equity trackers are available) and compare the numbers to see how it's stacking up
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michaelc
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Post by michaelc on Dec 29, 2019 15:41:34 GMT
Still looking at this but now I discover most of my pension is invested in this fund: www.aegon.co.uk/content/dam/ukpaw/hidden/Standard_B5SHMS9.pdfFair enough, but what I don't understand is how can I track this fund on the usual sites like Trustnet and Morningstar etc ? There appears to be no reference numbers or other way to identify it. On the face of it it seems to be doing quite well but to non-financial folk like me, it all seems very opaque. Edit: No doubt part or most of the reason for the apparent good performance is due to the dollar gain against sterling. Had a look at the fundsheet out of interest. What you have there is what looks very much like a closeted index tracker i.e. it's basically a bog standard passive global index tracker that's pretending to be actively managed. At first glance the returns actually seem slightly better, but then this fund reinvests dividends rather than paying them out. In fairness, the total charges on the fund at 0.73% aren't the worst I've seen, although three times what Vanguard charge ( VWRL = 0.22%). And yep, like everyone else exposed to global equities, some of the gain is GBPUSD, although nowhere near all of it. edit: I don't know how to track that fund specifically either, but you could just look at VWRL (other passive global equity trackers are available) and compare the numbers to see how it's stacking up THanks a lot for that information. Very helpful. I've decided to post this to lemonfool in its own thread to see if I can get a few more comments. Its starting to sound like I should consider switching. (And for the record, any "advice" I receive here or on any public forum is assumed to be provided in good faith and I would never remotely consider blaming anyone for any "advice" that turns out not to have been the best "advice" or in my best interests. )
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