Final salary scheme

In uk.finance? Doubt it ;-)

Most schemes are based on an average of the last three years. How long before you retire?

Transfer values are never good - you never get as much as you think you should be entitled to. The Trustees will take a slice of your pension fund if you move it, because they are going to lose out on the long term benefit of having your money in the scheme and any benefit they have actuarily assessed based on your anticipated life expectancy.

That's always a risk these days, Nobody can predict what will happen tomorrow, let alone next week, month or year. Best you can probably do is seek out an IFA who will offer you their best advice. However, I suspect that any IFA will not recommend you pulling out of the final salary scheme, as although you are earning less/paying less in, etc, you will probably still be better off staying in it rather than taking all your money and dumping it into a private pension scheme. Also, what other benefits does the final salary scheme give you ? Death in service benefit? Spouse pension? Anything else?

I'd echo most of what was stated above.

However, it may not be the case that the Trustees will short change you by reducing the transfer value.

I've seen many cases lately, especially where the pension scheme is in deficit, where the Trustees are enhancing Transfer Values, as they want members to leave, in order to reduce their long term liabilities. It is often actuarily attractive for them to get members out of the scheme.

Therefore, check out the funding situation of the scheme (i.e. whether it is in surplus, deficit, etc).

Whilst you should take independent advice if you are'nt 100% sure of what you are doing (choose a fee-based IFA), there is (or there was) a little known loophole whereby you could transfer benefits yourself from a final salary scheme to a stakeholder pension, and the stakeholder scheme could not refuse to take the transfer. This could then be transferred on to a new scheme (such as a SIPP). I managed to use this rule to get my own money out of a couple of final salary schemes without having to involve an IFA.

However, if the pension scheme is financially secure, why risk your pension, unless you enjoy taking risks ?

Neil.

Wedell wrote:

--------------------------------------------------------------------------------------------- Some schemes have a rule which allows them to take into account the best three years earnings in the last 10. This is designed for just such a situation as yours and usually those earnings are adjusted to take inflation into account.

Costs nothing to ask!

Are you sure that commissions are included in the calculation of your pension?

Robert

"Ozzie" writed in news:449f0dd4$0$1222$ snipped-for-privacy@news.zen.co.uk:

If you are over 50, is there a possiblity (which is in some public sector schemes) to "retire & return" thus effectively freezing your sceme at this moment in time?

| If you are over 50, is there a possiblity (which is in some public sector | schemes) to "retire & return" thus effectively freezing your sceme at | this moment in time?

I'm 51 and the ' retire & return' sounds interesting, I'll ask a trustee.

Thanks to all for the helpful advice.. Robert ... commission is ( or was ! ) about half my salary and is definitely included in the FSS.

I'm going to arrange an appointment with an IFA .. SAGA come recommended, although I'm not sure how independent they are. Also recommended is my union, Unison., who offer financial advice.

Chris.

I can't stress strongly enough if you are asking an IFA to look at final salary scheme benefits, ensure that you are paying them by the hour (or a fixed fee) for the advice, not commission linked to any subsequent transaction.

If it is in your interest to remain in the scheme, you would want them to tell you that.

Neil.

Ozzie wrote:

"actuarily attractive"

Nice turn of phrase, I must try and use it in the coming week ;-)

rgds, Alan