Defined Benefit pension transfer value advice

[Natt14]

Hello

I would like some advice, I have a Barclays defined benefit pension. I worked at Barclays from, February 1984 to October 1987. I recently asked for a transfer value, and was told it was just under £40000, see below. The scheme was the Barclays 1964 pension scheme. I have spoken to other ex Barclays colleagues, they told me this doesn’t seem right. Also I found an old Barclays remuneration document from December 1986, which showed a pensionable salary as £4858.00. I can’t see what the pension is due to the damage on the document, but it was worked out over 480 months. The document also states, if I took the maximum sum of £7287,(a part pension payment), the pension would be reduced to £2,723. Also, is the transfer value, the total amount in the pension pot. Thank you in advance to anyone who can advise.

Date of leaving:
16 October 1987
Date Pensionable Service commenced:
28 February 1984
Normal Retirement Date (NRD):
Guaranteed Minimum Pension (GMP) age:
1 January 2026
60
Date statement was requested:
16 November 2021
The NRD is the earliest date the member may be able to take their pension without any adjustment for early
retirement
Transfer entitlement
Total transfer value
Guaranteed transfer value
which includes:
Scheme pension built up before 6 April 1997
Transfer value of Guaranteed Minimum Pension (GMP)
39329.91
39329.91
39329.91
Guarantee date
16 November 2021
Pension benefits
GMP built up before 6 April 1988
Total Scheme pension
Pension at 16 October 1987
96.72 a year
96.72 a year

[mc2fool]

Hello, and welcome to the Lemon Fool.

You say you'd like some advice but, aside from one question (question marks would help!), I can't discern what you'd like advice about. So, here's some comments on a few things I've picked out.

On it being the Barclays 1964 pension scheme, that can't be so. There were major changes to pension schemes in 1978, with the introducing of SERPS and contracting out, and as you were most definitely contracted out (the presence of GMP tells us that) it can't be out of a 1964 scheme!

On is the transfer value the total amount in the pension pot(?), you can think of it that way if you like, but with DB schemes there is no "pot", per se, like there is with DC schemes but rather an obligation to pay you a pension calculated on, in your case (as yours is all GMP), the reduction in NI payments you made while in service and the revaluation method since. The transfer value is the scheme's estimated discounted future value of providing the pension.

The bad news is that that value is calculated, inter alia, on long(er) term interest rates and as those have gone up since you got your transfer value on 16 November 2021, your transfer value will now be lower. Before you ask, no, there's no easy way to estimate by how much!

You say you can’t see what the pension is 'cos of damage to the document: most schemes will give you a pension statement at any time, and indeed many have online systems that you can get a personal account for and log into and get a pension statement interactively. Be aware though, in case you think of getting another transfer value soon, that most schemes only allow one every 12 months for free and charge for any subsequent ones. £200-300 is typical.

Finally, on the possibility of transferring out, which I assume is the overall reason for your query, unfortunately you are probably in the worst position, cost wise, as any DB transfer over £30,000 must be advised by a qualified IFA, and that will almost certainly cost you several thousand pounds.

And the worst of it is that after spending that several thousand the IFA's advice may well be "no, you shouldn't do it" and there are decreasingly few DC schemes (you can only transfer DB to DC, such as SIPPs, etc) that will accept "insistent clients", i.e. ones that want to transfer against IFA advice.

[Natt14]

Thank you for your advice.

Well, my transfer value document from the bank is titled, The 1964 Pension Scheme, including the brochure they sent me.
I’ll see if there is a further interest rate rise, during the year, in which case, I may not need the IFA advise.

Thank you for your help today.

[mc2fool]

Well, my transfer value document from the bank is titled, The 1964 Pension Scheme, including the brochure they sent me.

Well then they very seriously changed the scheme without changing the name!