Like many local authority pension schemes, some of the memberships on offer form the West Midlands Metropolitan Authorities Pension Fund are Final Salary pensions – rare and valuable retirement plans that promise a guaranteed income in retirement.
The West Midlands pension fund was open to many employees of local councils in the area, and has over 300,000 scheme members as well as net assets exceeding £15.5bn, making it one of the biggest pension funds in the UK.
Backed by the Pension Protection Fund (PPF) up to 90% of a pension’s value, final salary pensions like those available through this scheme are considered to be some of the safest and securest ways to plan for retirement.
So why do people transfer final salary pensions?
Despite the range of benefits on offer from a final salary pension fund, there are some circumstances that may mean a transfer away from such as scheme is suitable.
Potential final salary pension transfers should always be assessed on a case-by-case basis by a financial adviser, starting from the assumption that the transfer is wrong and working from there.
For most people, a transfer should never really be on the table, as they stand to risk too many benefits for potentially little reward.
Yet every year thousands of people are persuaded to transfer away from valuable final salary pensions, into private schemes. In many cases, people are told they will be able to earn more money in retirement, and may even see their pot grow initially.
But while final salary pensions offer a guaranteed income in retirement, private pensions can be a finite source of income, and may run out. In worse cases, people’s entire pensions are lost in a volatile and merciless investment market.
The FCA, which regulates the financial services sector in the UK, has strict rules about who financial advisers can recommend a pension transfer to, including discussing the transfer and it’s potential impact in detail with each client so they understand the risk they will be exposing these pension to.
Sadly, many financial advisers either ignore these rules, or don’t follow them closely, sometimes influenced by the large fees that can be earned by transferring final salary pensions, even if it is not in their clients’ best interests.
If you’ve been persuaded to move a pension away from the West Midlands pension fund, even if you think you had good reason to, it could be that you were mis-sold, and you may be able to make a claim on no upfront cost basis.
The team of Case Assessors at Get Claims Advice Ltd can help you find out, with our FREE Initial assessment service.
Just get in touch through our website to find out if you can make a claim.
Please note: you have an initial cooling off period of 14 days, if you cancel outside of this period you may be charged for the work carried out and if we have already submitted your claim, which results in an offer of compensation subsequently being made, we will charge our full fee as per our T&Cs – our fee is 20% + VAT – a total of 24%.Speak with a Claims Handler
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Moving a final salary or other defined benefit pension is rarely advisable, except in certain situations.
While moving your pension may earn your adviser big fees and commissions, you may lose more than you hoped: