Final Salary Transfer
These are often referred to as a defined benefit scheme and are becoming increasingly rare due to the high level of benefits that can accrue from years of working for the same company.
In many cases, leaving the scheme where it is, is the right thing to do. Help will usually be needed to decide what balance of cash/ income is most appropriate for the individual, as the income will be reduced by a certain factor as the entitlement to the lump sum increases.
However, there are circumstances where an individual may choose to transfer benefits away from the scheme in exchange for a large lump sum which gets paid into a new scheme. This is known as a final salary transfer. This is particularly relevant since the changes in legislation in April 2015, as pensioners are able to pass their pension pots to their spouse without the worry of punitive penalties, and can access the money at a rate they choose. For those with alternative income streams in retirement, this can be very attractive.
> Final Salary Transfer Advice
Advice on transferring benefits from a final salary scheme can only be given by a pension transfer specialist, as required by the FCA and here at Churchill Wealth Management, all advisors have this qualification.
Careful analysis needs to be performed to understand what the member may be giving up and whether the lump sum offers good value for the lost benefits. This begins with us requesting a transfer value quote, then performing detailed analysis including how your benefits would revalue in the old scheme compared to the new scheme and how much growth is required from the new scheme to match the benefits of the old.
Unlike many firms, we do not outsource this process. This means that any questions you may have about this process will be answered by your adviser who will have a detailed understanding on exactly what is involved and the associated benefits and drawbacks.