Defined Benefit Pension Transfers
In order to provide our clients with an improved and streamlined service we have decided to outsource the processing of defined benefit pension transfer enquiries to a third party, and we have voluntarily removed our defined benefit transfer permissions from our FCA authorisation.
Key Factors to consider
Transferring a defined benefit (final salary) pension is only suitable for a small minority of people. This is a vitally important consideration, and it should be comprehensively scrutinised before you proceed.
You must ensure that you participate in a comprehensive analysis which examines multiple factors to determine whether a defined benefit pension transfer would be suitable for your circumstances
We have investigated third party sources who help in this area and we identified three: Pension Works, Pension Help, and Pension Exchange. We have chosen to recommend Pension Works because of good experience with them over the last few years.
The Analysis Process
The process follows the four stages:
1
Initial Consultation
Understand your circumstances, objectives and concerns
2
Data Gathering
Collect detailed information about your pension and financial situation
3
Technical Analysis
Comprehensive modelling and comparison of options
4
Recommendation
Clear advice with detailed reasoning and risk warnings
Understanding Your Circumstances
A thorough analysis of your personal circumstances, will be undertaken which will examine factors including:
- Your health and that of your spouse/partner
- Your attitude to investment risk
- The importance of providing benefits to your spouse/dependants
- Your other sources of retirement income
- Whether you need to access your pension before scheme retirement age
- Important Considerations
- Before considering any pension transfer, it’s crucial to understand the potential risks and benefits involved.
Transfer Value Analysis
You will be provided with a comprehensive analysis of your defined benefit pension transfer value, examining whether the offer represents good value compared to your guaranteed benefits.
- Current transfer value assessment
- Future benefit projections
- Critical yield calculations
Investment Growth Potential
Consider the investment growth required to match or exceed your defined benefit pension, taking into account your risk tolerance and investment timeline.
- Required growth rates
- Investment risk assessment
- Market volatility impact
Security vs Flexibility
Balance the guaranteed income from your DB pension against the flexibility and inheritance benefits that come with a personal pension arrangement.
- Guaranteed vs flexible income
- Inheritance planning benefits
- Control over investments
Potential Risks
- Transfers are only suitable for a small minority of people
- You may be giving up valuable guaranteed benefits
- Investment returns are not guaranteed
- Charges will reduce the value of your pension pot
When Transfer Might Be Suitable
- Serious ill health affecting life expectancy
- No spouse/dependants requiring survivor benefits
- Very high transfer value relative to guaranteed benefits
- Strong need for inheritance planning
- Significant other retirement provision already in place
The Role of Interface Financial Planning
Pension transfer advice is a specialist area requiring specific FCA permissions. While we have many years’ experience in the area, we no longer have the FCA authorisation so we will not be providing you with the advice on whether or not you should transfer. The advice will be entirely the responsibility of the third party.
With your permission we will provide your full details to the third part so that they have an initial understanding of your circumstances. We will monitor progress of this advice via our third-party account.
If you decide to proceed with the transfer we can monitor your investments, manage your withdrawals, and include your invested pension along with your other investments. We can also include it in your lifetime cash flow projections if you would like us to do so.
If you would like to investigate your defined benefit transfer options with no obligation whatsoever simply contact us and we will send you the third-party authority form for your signature.
Please note that the third party will charge you a fee for arranging your transfer and it is their responsibility to declare that fee to you before you proceed. If you decide to proceed, they may provide us with a share of their fee and if you request it, we will declare this fee to you after we receive it.
The reason for our involvement is because we want clients to have access to a professional defined benefit transfer service if it is appropriate for their circumstances.
