Defined Benefit Transfer Advice

Pensions Freedom has brought material changes to the options available to members of Defined Contribution (also known as ‘Money Purchase’) pension schemes. However these new regulations are not available to Defined Benefit (also known as ‘final salary’) schemes.

Individuals who wish to take advantage of the Pensions Freedoms legislation can do so by electing to transfer their Defined Benefit pension scheme into a Defined Contribution scheme.

This option is typically only available to individuals who are no longer contributing to their defined benefit pension scheme.

Furthermore, seeking defined benefit transfer advice from a regulated financial adviser who is classed as a pension transfer specialist is mandatory before transferring out of a defined benefit pension scheme if their transfer value is in excess of £30,000.

Transferring a defined benefit pension will not suit everyone, and our role is to capture information regarding an individual’s circumstances, attitude to risk and objectives to determine whether transferring is suitable for them.

There are a number of aspects which we will consider when determining our advice as to whether or not to transfer your defined benefit arrangement.

The key areas that need to be considered include:

  • Personal circumstances.
  • Health & lifestyle.
  • Need for lump sum benefits on death.
  • Desire to have death benefits paid to someone other than spouse (i.e. children).
  • Capacity for loss.
  • Attitude to Risk.
  • The income you require at retirement.
  • Whether you would like the ability to vary your income at retirement.

In addition, we will also conduct a Transfer Value Analysis (TVAS) report. This is a mandatory requirement for those looking to transfer away from a defined benefit scheme. The aim of the TVAS is to compare in financial terms the benefits available under the defined benefit scheme with the benefits available by accepting the transfer value offered.

Should you wish to discuss this further, please contact us at info@creativewm.co.uk or call us on 020 3725 4149.

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