Reasons why you might wish to restructure your pension

Final Salary Pensions (DB)

  • Improve pension against standard scheme spec.
  • Improve and protect pension where employer not financially sound and PPF is a possibility.
  • Access benefits early where scheme rules don't permit this.
  • Improve death in deferment benefits.
  • Provide death benefits to non-spouses/dependants.
  • Take benefits in a different format to scheme spec, especially new retirement options.
  • Access PCLS in order to clear debts or meet capital expenditure requirements, where there are no alternative sources of funds (over 55s only).
  • Access new flexibility with retirement options post 5th April 2015.
  • Protect against the impact of the lifetime allowance.
  • Access higher PCLS (non-UK residents 5 years +) .
  • Provide access to loans and self-investment in member's business. (UK residents).
  • Facilitate commercial property purchase either as an investment or as trading premises. (UK residents).

Things to watch out for

  • The acid test is that any transfer must be in the member's best interest.
  • Over-riding priority is the provision of member's income at retirement. Any option that will result in a reduction must be able to clearly be justified.
  • Any of the above potential uses MUST be matched with a genuine client need that cannot be met in any other way.
  • Loss of enhanced or primary protection.
  • Loss of death benefits.
  • Taxation of PCLS for non-UK residents
  • TV's usually valid for only 3 months, so advice needs to be delivered and transactions carried out within that timescale.

Money Purchase Schemes (DC)

  • To reduce cost. (All types of clients).
  • To improve fund access/performance. (All types of clients).
  • To adopt a more coherent investment approach in line with other investments. (All types of clients).
  • To consolidate with other arrangements in order to simplify personal admin (secondary reason only). (All types of clients).
  • To access PCLS in order to clear debts or meet capital expenditure requirements, where there are no alternative sources of funds. (All types of clients/over 55).
  • To facilitate borrowings or investment in members business in order to further business objectives. (UK resident, Limited company shareholder/directors).
  • To facilitate commercial property purchase either as an investment or as trading premises. ( UK resident,Limited company shareholder/directors and self employed sole traders or partnerships).
  • To improve death benefits under old style schemes. (All types of clients).
  • To protect against impact of lifetime allowance.
  • To retain control where a director or shareholder member of a SSAS exits a business. (UK resident, Limited company shareholder/directors existing SSAS members).

Things to watch out for

  • Tax-free cash in excess of 25% under existing schemes.
  • Enhanced and Primary Protection.
  • Guaranteed Annuities.
  • Life cover.
  • Waiver of contribution.