“The Pensions Regulator has revealed that 67,700 people transferred out of defined benefit pension schemes in the last year alone, as savers seek to take advantage of sky-high transfer values.”
In this article, we will look at issues regarding final salary pension transfer advice and defined benefit pension transfer advice. We will describe examples of:
It will provide a basis for comparing defined contribution vs defined benefit pension plans.
Why Do People Want to Transfer Defined Benefit Pension to a SIPP or a QROPS
‘With increased pension flexibilities a greater number of clients are likely to find themselves considering some form of income withdrawal solution to their retirement income needs. With the availability of flexi-access drawdown (FAD) and its removal of the need to consider maximum GAD limits, the opportunity to take large, irregular and ad-hoc income payments creates further complexity in ensuring the sustainability of a client’s pension income.’ Just Retirement – Technical Bulletin – Critical Yield
People want advice and will want to transfer for different reasons, each person is different and we at Lawsons Equity Ltd treat each as different. There are many factors that must be considered at the start, and these are covered in detail in our article on Top 3 Destinations for Pension Transfers. These include attitude to risk, ability to absorb fluctuations in the value of the pension fund, personal circumstances, economic goals etc. Examples of why people want to transfer include;
Which pensions can be transferred and which cannot
If you’re in what’s called an ‘unfunded’ public sector pension scheme, you won’t be able to transfer your pension. Examples of an unfunded public sector pension scheme are the Teachers Scheme and the NHS scheme.
You will be able to transfer your pension if you’re in a:
Benefits of Transferring
Not all benefits will apply to all clients, some depend on the jurisdiction of the new scheme, the tax residency and domicility of the client, where funds are remitted to, etc.
Benefits of NOT Transferring out
Key factor that a pensions specialist must be considered
All the factors in our article on the Top 3 Destinations for Pension Transfers, however a small number of key ones are here:
Brief outline of the process and How can Lawsons Equity help.
The process is straightforward but not simple. There are many dangers including the risk of pension scam, making illegal transfers that later lead to your fund being taxed as a non-qualified fund. Lawsons Equity will work with your pension administrator to get the information needed for the analysis. They will spend the time to understand your personal and economic objectives and your situation. From this, they will develop a proposal with you for what type of pensions suits your needs, what underlying investments can help you meet your objectives and arrange financial advice from an FCA regulated pension specialist if required. Then once you have an agreed plan we will take responsibility for its implementation. We are fully regulated and abide by the Malta Financial Service Authority code of ethics, our cost will be given up front, and we will treat you as an individual.
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Lawsons Equity Limited is a company registered in Malta with company number C49564 and Licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here
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