Existing Pensions

Since DB deficits were running too high, nearly all UK companies decided to close the schemes to new entrants and open ‘Defined Contribution’, or money purchase, schemes. It has become too expensive for companies to define how much they will pay to former employees in retirement and therefore they will now only define how much both employee and employer will contribute. The benefit will depend on the underlying investment performance. Despite this change, the employer still decides when the pension can be accessed and how it is invested.

disadvantages of offshore schemes are often the same as onshore schemes, with the key difference being simply in which jurisdiction they are held. As a member of an offshore scheme, you have the same rights to request your pension scheme information. You also have the same rights to a Transfer Value Analysis and to request transferring to a personal scheme.

A Self Invested Personal Pension (SIPP) is a HMRC approved pension scheme which allows you to take control of your pension. You can choose how your pension is invested, when you retire, how much income you take in retirement, and nominate your own beneficiaries on death. SIPPs give you a choice of currency for your pension if you will be retiring outside of the UK and can also be used for consolidating multiple pension pots.

Yes, there are alternative solutions available. For example, South African nationals may benefit from a 40EE and clients returning to the European Economic Area may benefit from a QROPS. These solutions will depend on individual circumstances.

The CETV or TVAS are essentially the same thing. They are reports provided by the pension scheme giving details of the policy, the terms and conditions and the cash value amount that they will offer to transfer your pension out of the scheme.

CETVs are calculated based on gilt rates in the UK, which is the interest rate on UK government debt. The lower the interest rate, the more capital is needed to purchase an annuity for the purpose of providing the pension income. Lower interest rates have historically resulted in higher transfer values, and interest rates in the UK are currently at historical lows.

Under law, members of private sector occupational pensions have the right to transfer into a personal scheme. Any transfer must comply with the pension law of the UK, which is regulated by the FCA, The Pensions Regulator, and HMRC. If your request to transfer complies with the rules and is in your best interests, then it can be done.

Because of the deficits in UK pension schemes, the British government have closed the transfer rights for any government-backed pension fund, as they are more that £1tn in deficit. This will include previous teachers, NHS staff, civil servants, and members of the emergency or armed forces. These non-transfer rights have also been extended to any Defined Benefit scheme pension that is in drawdown (being paid out) and any pension scheme that has fallen into the Pension Protection Fund cannot transfer out.

Once we receive the CETV and pension benefits from the scheme, we will discuss with you if we think it’s in your best interests to transfer or to remain with your current scheme.

The value of the pension is transferred from being in your company’s scheme into your own, personal scheme. It is like moving your wallet from your left pocket to your right pocket, but after the transfer you have control over when to open your wallet and how much to take out of it. As pensions are highly regulated, there is a step-by-step process we follow to ensure everything runs smoothly.