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Defined Benefit Transfers – Smith Robinson & Co

Defined Benefit Transfers

  • If you have a Defined Benefit Pension and wish to transfer this to have access to your pension more flexibly, you need to understand the risk and consequences. 

    Defined Benefit schemes have safeguarded benefits such as an inflation proofed, guaranteed lifetime income as well as spousal/partner pension benefits. It’s extremely difficult to try and replicate these benefits with the transferred fund value and so the reasons for wanting to transfer should be needs which the scheme can’t offer. 

    Pension freedoms allowed those with defined contribution schemes to access the pension, without limitations from age 55, unfortunately those same rules don’t apply to defined benefit schemes. Those who are wanting to forego their guaranteed benefits should in the first instance ask their scheme administrators for a Cash Equivalent Transfer Value. All schemes allow for at least one transfer value to be calculated in any 12 month period, free of charge. The transfer value will be guaranteed for three months, in which time the scheme should be notified with an intention to transfer, or let the guaranteed transfer value lapse. 

    The Financial Conduct Authority currently requires anyone who wishes to transfer a defined benefit scheme, with a value of £30,000 or more, to seek financial advice from someone who has obtained the relevant pension transfer permissions. 

    Smith Robinson has the relevant permissions, and has carried out many requests in this area. 

    If you wish to discuss your situation or find our more about our pension transfer specialist please click below.