You may be someone who has spent part or all of your working life employed by a large national employer who during that service provided you with a final salary occupational pension scheme. These schemes are highly sought after as they offer attractive and secure retirement benefits.

With the introduction in April 2015 of the new pension freedoms, members of occupational pension schemes in the private sector have choices that were not previously available. The new pension freedoms give private sector final salary pension scheme members far greater flexibility and access than ever before. With these new retirement benefit freedoms comes responsibility to ensure that your largest asset is used wisely.

Occupational Pension Scheme Transfers are a complex area requiring specialised qualified advice. In order for a firm to be able to advice on pension transfers they must hold the appropriate Financial Conduct Authority (FCA) permissions to undertake such advice. A pension transfer must be undertaken by an individual who is deemed to be a pension transfer specialist. In order to achieve this status, the adviser must have passed the relevant examinations and therefore hold the appropriate qualifications. At Estate Capital we have two individuals who hold this status.

Our financial advisers can:

• Provide a full and detailed report regarding deferred company pension scheme benefits.
• Provide a comparison of the projected benefits at retirement.
• Provide a comparison of benefits available on death both pre and post retirement.
• Provide a calculation of the annual rate of growth or critical yield required to match the value of the benefits that would have been available in the existing scheme.
• Explore and explain the advantages and disadvantages of any potential transfer.
• Assess your attitude to risk in conjunction with the suitability of the transfer.
• Research all of the market, as we are an independent firm, to find the provider best suited to your needs if this is appropriate.

Defined Benefit Pension Transfer Advice

Following guidance from the FCA, we have, like all other advice firms, changed the way in which we charge for providing advice relating to the transfer of benefits from a Defined Benefit Pension Scheme.

From 1 October 2020, occupational pension transfers (Defined Benefit / final salary schemes) are subject to a new, three-step advice process.

Firstly, a free, non-advised Triage Service is available to all clients. It looks at existing safeguarded benefits and helps a client decide if Full Advice is required.

The next option is Abridged Advice, which looks at your personal circumstances, including health, financial objectives, your knowledge and experience of investments, your attitude to investment risk and transfers risk, your ability to withstand financial losses and others. At this point, the advice may be to either retain your DB scheme or the position may be unclear. If the latter is the case, you can choose to receive Full Advice.

Full Advice, in addition to points mentioned above, entails a comprehensive analysis of the benefits of your existing DB scheme and a new DC scheme that might be suitable for your needs.

The triage service is free, the other options are subject to fees. The fee for Abridged Advice costs £1,000. Of this, £500 can be covered by your existing DB scheme. The fee for Full Advice is £4,000. The fees and the risks of proceeding with the recommendation will be highlighted to you before any advice takes place.

This fee will be payable by invoice rather than paid from a pension fund. Our fee is set at an established level regardless of the size of the pension fund being considered to ensure you receive impartial advice and pay a fair price for the work that we do.

Our fee will be chargeable irrespective of whether our analysis shows that it is in your best interest to transfer your defined benefits or to remain within your existing defined benefit scheme. Our objective being to give you the most appropriate advice in your circumstances. The fee covers our costs for analysis, research and if appropriate subsequent implementation of our recommendation to transfer.

Fixed Fees are applicable to specialist areas of advice that may not result in a recommendation to purchase a product. For this reason, Value Added Tax (VAT) may be applicable but we will tell you if this is the case before, we proceed.

In order for our firm to provide DB transfer advice, a client must meet the following criteria:

• Be a UK resident;
• Aged 50 or older;
• Have a pension plan valued at £200,000. (For existing clients of Estate Capital, we will consider lower plan values).

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