Pension Income Planning Ltd.
01277 600518
Please be aware that calls to and from our offices are recorded, will form part of our client records and may be used for training purposes
  • 1
    Start my journey
  • 2
    Initial application
  • 3
    Abridged Advice
  • 4
    Full Advice

Initial information

Please read the below information...

I'm thinking about transferring out of a Defined Benefits Pension scheme. What do I need to know?

Whether to retain or transfer benefits in a Defined Benefits (DB) scheme, is a decision that can only be made with full understanding and consideration of the advantages and disadvantages of the staying in the scheme, compared to the alternative options, and the risks and costs involved.

What does the Financial Conduct Authority say?

The Financial Conduct Authority (FCA) say that the decision to transfer out of a DB scheme is a complex one and their view is that for most people it is unlikely to be suitable to transfer safeguarded benefits offered through an occupational pension scheme in favour of flexible benefits.

Where could I transfer my DB scheme benefits to?

If a transfer is deemed suitable, the FCA say that the default plan for destination of the transfer funds should be your current or most recent employer’s workplace pension scheme, if it can accept DB scheme transfers, unless an alternative plan can be shown to be more suitable.

How quickly can a transfer take place?

The transfer process from start to finish can take several months to complete. From when the DB scheme Trustees receive a request for a Cash Equivalent Transfer Value (CETV), they must supply one within 3 months (extended to 6 months during the Covid-19 pandemic).

CETVs are valid for 3 months from their guarantee (or calculation) date. If you are advised to transfer and accept the CETV offer before it expires, the scheme Trustees have 6 months from the guarantee date to arrange the transfer to the recommended new plan.

You are entitled to one free CETV per annum. There is likely to be a charge for any additional CETV requested within a 12-month period. Once you are within 12 months of the scheme’s Normal Retirement Date, the scheme Trustees are not obliged to provide a CETV, so you may not be able to transfer.

Do I need to take financial advice?

Financial advice from a qualified Pension Transfer Specialist must always be taken if the scheme CETV is £30,000 or more. Taking financial advice for smaller CETVs is still a good idea if you are not completely certain that you understand the disadvantages and possible consequences of a transfer.

What will it cost me?

Before you commit to paying any fees to Pension Income Planning Ltd for financial advice, you should commence our step-by-step client journey, which we have designed to help you through the process. You can stop the journey at any time and only move to the next step if you are satisfied that this is still the right thing for you.

Description Cost
Step 1

Completion of our Customer Privacy Notice by you and, if applicable, your partner. This is necessary for us to be able to hold certain personal data.

No charge
Step 2

Triage. Read our Client Guide DB pension scheme transfers.

No charge
Step 3

Read and complete our generic DB scheme information document.

No charge
Step 4

View the FCA’s video on DB pension schemes.

No charge
Step 5

View a series of Money Alive videos on DB schemes.

£50

Step 6

Commit to Abridge Advice.

Abridged Advice will entitle you to have a recorded meeting with a qualified Pension Transfer Specialist from Pension Income Planning Ltd, who will conduct an in-depth assessment of:

  • Your personal and financial circumstances.
  • How critical fixed income would be for you in retirement.
  • Your specific objectives, including any goals for your tax-free cash and income patterns in retirement.
  • Any expected changes to your circumstances.
  • Your assets and liabilities, other sources of income available to you and, if applicable, your partner.
  • Your attitude to risk.
  • Your health and longevity.

We will also consider the benefits, advantages and disadvantages of your existing DB scheme benefits and whether these can meet your goals.

Abridged Advice will determine whether, in your own case, we can categorically conclude that a transfer would NOT be suitable OR whether it is UNCLEAR whether a transfer MAY be suitable.

A written report covering the aspects discussed and confirming the recommendation, an investment risk analysis report and cash flow modelling charts, will be provided.

If the outcome of Abridged Advice is that a transfer would not be suitable, no further fees are due.

If the outcome of Abridged Advice is that it is unclear whether a transfer may suitable, you have the option to pay for Full Advice from a qualified Pension Income Planning Ltd Pension Transfer Specialist.

Our advance fee for the provision of Abridged Advice, is £960 inclusive of VAT for one DB scheme transfer value.

Where there are 2 or more periods of service these are chargeable as separate transfer values.

Our fee for any additional schemes is £300 + VAT per scheme. Where there are multiple schemes, we will apply the £960 fee to the larger of your schemes.

Step 7

Commit to Full Advice.

This advice will result in a recommendation to either transfer or not.

Full Advice will entitle you to have a recorded meeting with a qualified Pension Transfer Specialist from Pension Income Planning Ltd, who will:

  • Review the information considered at the Abridged Advice Stage.
  • Prepare an in-depth mathematical analysis of the features of your DB scheme.
  • In the event of a transfer being deemed suitable, conduct an analysis of the features and charges of the new or existing arrangement being considered as the destination for the transfer, to ensure the product is suitable.
  • Recommend a potential investment strategy that is in line with your objectives and appropriate for your attitude to risk.

This Full Advice fee is payable whether the recommendation is to transfer or not, unless you meet certain criteria relating serious financial difficulty. You must, therefore, be able to commit to pay this fee direct to Pension Income Planning Ltd in the event of a no transfer recommendation or where, in the event of a transfer recommendation, we cannot collect the fee from the transferred funds, e.g. if the receiving scheme is a WPS.

For a transfer recommendation, the fee also covers the following work by Pension Income Planning Ltd:

  • submission of correctly completed transfer paperwork to the DB scheme administrators, in a timely fashion
  • submission of correctly completed paperwork or online information to the administrators of the scheme or plan that is to receive the transfer, in a timely fashion
  • monitoring the transfer process throughout to ensure, where possible, the deadline is met
  • arranging any tax-free cash payments to you and investing the funds, once the transfer has completed

A written report confirming the recommendation, a Pension Transfer Analysis report and, for a transfer recommendation, a personal illustration for the new plan, with supporting documentation, will be supplied.

£4,000 + 1% of the transfer value per scheme being reviewed. This fee will be offset by the net fee paid for Abridged Advice.

What will I need to provide, if I commit to Abridged Advice?

In addition to the Customer Privacy Notice, completed in Step 1, we will need to see an item to confirm your name, such as a valid passport, and an item to confirm your address, such as a valid full driving licence.

We will also require:

  • Completion of our Client Agreement, which sets out our terms of business.
  • Completion of our Initial Client Confidential Question, which will gather information about you and, if applicable, your partner, including:
    • Aims and objectives
    • Details of the DB pension (s) to be reviewed and any other pension arrangements you have, including recent valuations
    • Current employment status
    • Income and expenditure
    • Non-pension assets
    • Liabilities, such as a mortgage or loan
    • Financial dependants
    • Health
  • A personal letter from you, giving full details of your objectives and your financial experience and knowledge.
  • A signed Fee Agreement for Abridged Advice. Details of the fee are in the Client Agreement and confirmed in the Fee Agreement.
  • Completion of a Letter of Authority (LoA) allowing Pension Income Planning Ltd to obtain information about your benefits in the DB scheme. A separate LoA is needed for each DB scheme to be reviewed.
  • Completion of our Risk Profile Questionnaire. This should be completed with your own IFA and will established your attitude to risk and capacity for loss.

pension

Sterling Court, 4 Gresham Road
Brentwood, Essex, CM14 4HN

01277 600518
01277 202233
pip@pipplanning.co.uk

Please be aware that calls to and from our offices are recorded, will form part of our client records and may be used for training purposes.

 

 

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