Cetv

deano12 · Post by **deano12** » 13 Feb 2019, 23:09

Hi l am due to take my pension in a years time. Been looking at taking it out , and putting it in a flexible draw down plan. It seems that you have more control over your future finances. Anybody else went down this route? Cheers

Post by **RobertT** » 14 Feb 2019, 04:30

You can only transfer your RMPP(post 2012) benefits into a DC scheme via a CETV, which you could then drawdown. You can't transfer your RMSPS(pre 2012) benefits into another DC plan! Details.

The one big advantage of a DB scheme is that your income is index linked for life, it's guaranteed and you don't have to think about it.
With the drawdown route, you'll be at the mercy of the stock markets and there's always the danger you might run out of money, leaving you with just the state pension to live on.

It's a big decision, so please take proper financial advice before proceeding. Infact if your RMPP CETV is more than £30,000 you'll have to!

Personally I'm going the drawdown route(using a personal pension set up specifically for that) to fund early retirement and to supplement my RM pension before state pension age. From SPA onwards I'll have a decent guaranteed income along with what's left of my tax free lump sums to dip into.

lordthornber · Post by **lordthornber** » 14 Feb 2019, 08:01

As I left in in '04 I was unable to take the CETV route. However, I was able to do it with my pension from my job after RM. This, like Royal Mail, was a DB scheme. I had the perfect situation for my circumstances, transfer the CETV to my SIPP, ( I've been an amateur investor for 20 + years), and use the DB elements of RM's scheme for the relative stability.

Yes it's expensive to do, and compulsory on CETV over 30k. I was quoted as much as £4000 but paid £2000. I'm not advocating anyone does this, it is not for the faint hearted and definitely not for anyone who thinks flinging their DB pension fund into an advisors hands will make them rich. As I actively enjoy the investment work I put in, it was a no brainer for me.

deano12 · Post by **deano12** » 14 Feb 2019, 08:57

Cheers for the input lads. My reasoning for prob going with cetv is this. RM gives me a pension of £8.500. Of l take the max lump £6.500. Say after a while l pop it. My beneficiaries get £3.250 split between them for life. Now say my cetv is £160.000.l take £40.000 lump. Leaves £120.000. I take £6.000 yearly for 6 years till SPA. Leaves £84.000 if anything happens to me. Bit of a no brainer l think. Would only be putting my cetv is a low risk fund 2 to 3% return

lordthornber · Post by **lordthornber** » 14 Feb 2019, 16:28

If it stacks up for you then good. Don't forget to factor in tax implications and on going fees for it being managed. You could always put 50% into a SIPP, use a ready made portfolio which matches your attitude to risk and put other half with an advisor or a low risk tracker. Just some food for thought,all the best.

Hawkey99 · Post by **Hawkey99** » 14 Feb 2019, 17:08

I know you need to speak to a FA if you wish to take your NRA 65 as a CETV amount instead of a pension but just wondered who actually makes the decision.

Do they advise you in writing its unwise but its up to you or can they stop you doing it.....

Just interested.

Thanks

Post by **RobertT** » 14 Feb 2019, 18:57

The IFA will have to 'sign off' the transfer. If they don't think it's in your interests then they don't have to, because they can be liable to pay compensation further down the line if you realise it was a bad move. That's also the reason charges can be high, as they often take out insurance against it. They're basically covering their backs should things go sour.

In general, DB schemes are always better than DC. The ability to transfer out via a CETV totally goes against that, so if you're thinking of going down this route, do your homework, get advice and don't be blinded by the £££'s!

You might also find that some pension providers don't accept these type of transfers without advice, even when the value is below £30k.

Here's some reading on the matter: https://www.moneyadviceservice.org.uk/e ... ion-scheme" onclick="window.open(this.href);return false;

deano12 · Post by **deano12** » 14 Feb 2019, 21:40

I left in 2013 . Can.t keep up with DB.s DC.s. Pensions are too confusing. 13 weeks to get a cetv. Ridiculous l think.

Post by **RobertT** » 15 Feb 2019, 04:32

deano12 wrote:I left in 2013 . Can.t keep up with DB.s DC.s. Pensions are too confusing. 13 weeks to get a cetv. Ridiculous l think.

As I said in my earlier post you can only get a CETV and transfer to DC for drawdown, for the RMPP(post 2012) element of your RM pension. So if you left in 2013, you'll only have a year or so in that part?

As a rough guide to how much your CETV is going to be, just multiply your 2012-2013 pension entitlement by 20.
I would hazard a guess it's likely to be only around £8,000.

* If you want to transfer your RMSPS(pre 2012), you can only move it to another DB scheme.

lordthornber · Post by **lordthornber** » 15 Feb 2019, 06:11

Hawkey99 wrote:I know you need to speak to a FA if you wish to take your NRA 65 as a CETV amount instead of a pension but just wondered who actually makes the decision.

Do they advise you in writing its unwise but its up to you or can they stop you doing it.....

Just interested.

Thanks

I'm not suggesting Robert T is wrong about IFA's refusing transfers but my actual experience 18 months ago was (briefly) like this.

Original face to face meeting, I explain I will be transferring, IFA says he will not recommend.

Documents arrive with his recommendations - which I can decline PROVIDING I sign a letter written by myself stating that I understand what I am doing, that I will not pursue compensation if my choice to transfer affects me negatively.

Apart from an administration hiccup, (which the IFA claimed £250 compensation for me), it was a doddle. More importantly, for my personal circumstances, entirely financially appropriate.

deano12 · Post by **deano12** » 15 Feb 2019, 08:48

Cheers RobertT. I had read somewhere that certain pensions would not be allowed ie police , fire, nhs