Defined Benefit Pension Advice

Defined Benefit Pension Transfer Stages

Providing defined benefit pension transfer advice is complex and takes time. It is potentially one of the most important financial decisions you make in your lifetime so it is essential you understand what the process is, and make sure you understand the risks, as well as the benefits of a pension transfer.

However, transferring from a scheme like this involves giving up valuable guarantees.

Below is a broad outline and explanation of each stage within the process.

Defined Benefit Pension Transfer Stages

1. Information Gathering

This is one of the longest stages.

Once you have returned your enquiry form, we contact your pension provider(s) requesting all the information we need to advise you, such as how much money you have in it and technical data about escalation* and revaluation** rates etc.

Even if you provide us with some of this information, we will still need to check the details with your scheme and gather anything outstanding.

Workplace Pension Scheme (WPS) – We will also need to get details about your most recent WPS, this is a requirement as we must consider it as one of the destination options if a transfer is to go head.

*Escalation is the rate your annual pension will increase/escalate when it is paid after you retire.

**Revaluation is the rate your annual pension will be revalued by from the date you leave the scheme up to the date you start receiving your pension.

2. Triage Advice

This is a free service.

The first stage in helping you to understand your pension options.

At the same time as we are writing to your pension scheme, we will send you generic educational information about the risks of transferring a defined benefit pension scheme and points you need to take into consideration. Our advisers are available if you have any questions.

3. Fact Finding

We listen to you.

Having read through the Triage information and confirmed your understanding so far, we then arrange a telephone call with you at a convenient time, in order to find out about your circumstances and exactly what you need.

4. Abridged Advice

This is a free service.

Unlike Triage advice, at this stage we will have received back most of the information we need from your pension scheme, however, the advice we can provide at this stage is simply about your current pension and personal circumstances, we are not allowed to consider where a transfer might go.

As such, the outcome is limited to either transferring your pension is not advisable or, we are unable to ascertain suitability and can only do so by proceeding to the next stage of Full Advice.

Read our Guide to Abridged Advice for a more details.

5. Your Approval is Required

You are under no obligation to go any further and will not incur any fees if you stop here.

Following receipt of our Abridged Advice report, if you wish to progress to the next stage of Full Advice, you will need to give us your written consent.

6. Full Advice

This service is subject to a fee, whether a transfer goes ahead or not.

A fully qualified FCA regulated adviser discusses our recommendation with you.

Once we have received your written consent, we will proceed to carrying out a full analysis of your case, including running detailed technical reports and illustrations***. The same adviser will analyse all this information and settle upon a final and definitive recommendation, at which point they will arrange a telephone call with you to discuss their recommendation and answer any questions you may have.

However, you must remember that our starting point when consider a pension transfer is that it is unlikely to be suitable.

***Illustrations are the projections of what your pension might be worth if it is transferred and invested into a personal pension, taking into account all the costs and charges.

7. Final Recommendations

Helping you to make an informed decision because you have all the facts.

We send you a full report, written in plain, easy to understand English, which will set out our final recommendation, including all relevant paperwork needed if a transfer is to proceed.

Insistent Clients:

If our recommendation is that you shouldn’t proceed with transferring your pension, maybe because you don’t really need to transfer it now, or because we believe keeping a guaranteed pension from the scheme is more suitable, in certain circumstances we will consider accepting you as an insistent client, in other words you could go against our advice and ask us to proceed with a transfer anyway.

There is no guarantee we will accept you as an insistent client.

Read our Guide to Insistent Clients for more details.

8. Proceeding with a Transfer

This is another very long stage.

Having sent back your completed application forms, we then request your old pension scheme to transfer your pension fund into the new arrangement. This is a very slow part of the process; however, we will keep you regularly updated with our progress; just bear in mind this is largely out of our control and dependent on the efficiency of the administrators of your old scheme.

9. Payment of your cash to you

Most people only release their Tax-Free sum, leaving the rest invested in their pension for a later date.

If you have requested immediate release of some of your pension fund, we arrange for this to be paid directly into your bank account at the point the transfer has completed.

10. Agency switch

If you have been introduced to us by another financial adviser that you wish to maintain as your investment adviser, assuming we have your signed authority to do so, we will automatically switch the contract agency back to them for the on-going advice you need.

Pension Transfer Consultation

Get Started Today

Free Pension Transfer Guide & Consultation
If you would like to find out if transferring your pension or taking a cash lump sum is suitable for you, we can provide a free initial Pension Transfer Consultation known as abridged advice.

Simply complete your details below, and we will send you our Pension Transfer Consultation Pack and Enquiry Form.

As part of the consultation we will look at:

  • What existing pension plans you have in place.
  • What your plans are for retirement.
  • Your needs for flexibility and control.
  • The likely cost of more in-depth advice.

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Defined Benefit Pension Transfer Warning

Transferring away from a defined benefit pension scheme means you will lose valuable guarantees.

Taking benefits early will almost certainly reduce your pension income in retirement and is only suitable for a limited number of people and circumstances. This should not be seen as an easy option for raising cash.

If you release all your money from your pension early you will not have anything left to provide you with income in retirement.

When releasing cash from your pension, usually up to 25% is tax free, the balance is taxed at your marginal rate at the time and could change in the future.

Watch the FCA video explaining the expectations of financial advisers when advising you on defined benefit pension transfers.

Grove Pension Solutions Ltd is authorised and regulated by the Financial Conduct Authority (Reference number 465051).