If you remained in the Smith’s Pension Scheme at the time of the GE takeover all the evidence is that you made a very sound decision. Smiths take their pension responsibilities very seriously and over recent years have been de-risking the Scheme by insuring around £1.6 billion of the scheme’s liabilities for pensions in payment.
Alongside that another de-risking strategy involves offering very generous transfer values for those members who have not yet reached retirement.
Members are entitled to receive a guaranteed transfer value once in any twelve-month period without fee and then have three months to decide whether to take the transfer value.
Whether or not you should take the transfer value is a very difficult and complex decision.
My view is that if you intend working to your normal retirement age and have no reason for wanting to access the tax-free cash (25% of the transfer value) before retirement then you should stick with the very valuable guaranteed pension.
If however the thought of access to the tax-free cash (after age 55) excites you, a partial retirement is a possibility, you are in poor health, or you would like your children to inherit your pension plan, then the transfer option is something you should certainly explore.
Leaping straight in to getting the required pension transfer report from a regulated pensions specialist could prove very expensive. You may even finish up paying large fees and then being advised not to transfer.
My role as a Retirement Coach is to help you understand all the reasons why a transfer may or not be right for you before you get involved in expensive fees, to source a regulated financial adviser to do the report for you if you wish to proceed, and to guide you through every step of the process.
To give you an example of the figures involved, two recent transfers I have helped with had values between £300,000 and £530,000. That is a lot of money but it does not mean that a transfer is right for everyone. There is a great deal to be said for having a very good level of guaranteed income for the rest of your life.
I hate deadlines but a recent consultation paper issued by The Financial Conduct Authority (FCA), who regulate pension transfers, suggests that pension transfers could soon become even more complex and expensive.
I can offer any member of the Smiths Pension Scheme a preliminary meeting entirely without cost just to see if you can get to the stage of deciding whether this is something you would like to explore in some depth.
Just phone or text me, Richard, on 07770 575122 and let’s get together.
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