We don't seem to have a pensions' thread so I thought I'd start one, particularly as I have a pertinent query. Any IFAs around?

Mrs TOK has received advice from a previous employers' pension manager that she has "unreduced benefits" due to mature in September.

Mrs T, who is still working (God bless her) has her own SIPP and I was wondering if she could transfer the accrued fund from this previous employer to her SIPP.

Any comments would be much appreciated.

I understand that Gordon Brown is setting up a private equity pension investment company.
If anyone is interested, I can give you the contact details!

Nice and simple!

Annuities explained: What you need to know to turn your pension into an income



Thanks Greek but.........

I found the following, which might be of interest to you if you have/run your own pension scheme:

Budget Summary 2014 – Pensions

There is no relaxation as regards the opportunity to invest in residential property and it will still be necessary to provide regular valuation of pension funds

The System Currently

You can currently take up to 25% of your pension fund – up to the Life Time Allowance (currently £1.5m reducing to £1.25m from 6 April 2014 unless you have certain forms of protection) – tax free. This is referred to as a Pension Commencement Lump Sum ('PCLS').

With the remaining pension fund there are 5 options:
• Purchase an annuity. This is an insurance product where a fixed sum of money is paid each year typically for the rest of your life
• Withdraw your pension via a ‘capped drawdown’ arrangement. This allows you to take income from your pension but there is a maximum amount you can withdraw each year – currently 120% of an equivalent annuity.
• Withdraw your pension via a ‘flexible drawdown’ arrangement. This is similar to a ‘capped drawdown’ arrangement but there’s no limit on the amount you can draw from your pot each year. However, you must have a guaranteed pension income of more than £20k per year in retirement before you can withdraw the remainder of your pension funds via a ‘flexible drawdown’ arrangement.
• If you are aged 60 and over and have overall pension savings of less than £18k – before taking the PCLS – you can withdraw all the fund in one lump sum subject to tax at your marginal rate on the amount remaining after taking 25% PCLS. This is called trivial commutation.
• On death any remaining fund can be paid as a lump sum subject to a 55% tax charge

From the 27 March 2014 (ie. the date that the Finance Bill 2014 is published) the following will take effect:

• The Minimum Income Requirement (MIR) for flexible drawdown is reducing from £20,000 pa to £12,000 per annum – applies to all individuals who apply for flexible access to their drawdown pension on or after 27 March 2014.
• Capped drawdown maximum income is increasing to 150% from 120% – applies for all drawdown pension years starting on or after 27 March 2014.
• The triviality limit is increasing from £18,000 to £30,000 – applies to all commutation periods starting on or after 27 March 2014.
• The maximum size of a small pension pot which can be taken as a lump sum (regardless of total pension wealth) is increasing from £2,000 to £10,000 and the number of personal pots that can be taken under these rules is increasing from two to three - applies to all payments made on or after 27 March 2014.

From April 2015 – The above changes, as they apply to defined contribution ('DC') pension savings, will remain in place until April 2015, after which time the government plans to introduce the more radical reforms as set out below:
• From April 2015, individuals aged over 55 will only pay their marginal rate of tax on pension scheme withdrawals, whatever the size. Hence the maximum rate on pension scheme withdrawals will be 45%, and individuals will be able to access funds as and when they want.
• Following on from the above, and subject to consultation the Government proposes to change the tax rules to allow people to access their DC pension savings as they wish at the point of retirement, subject to their marginal rate of income tax
• The 25% PCLS will continue to be available up to the LTA.
In addition the Government are proposing the following changes to defined benefit pension (final salary) schemes from April 2015.

Public Service Defined Benefit Schemes

• More people transferring their rights from unfunded public service defined benefit schemes to DC schemes, to take advantage of the new tax rules, would therefore expose the Exchequer to significantly higher costs. Having considered these issues, the government intends to introduce legislation to remove the option to transfer from a public service defined benefit scheme to a DC scheme, except in very limited circumstances. The government does not intend to change the rules affecting transfers from public service defined benefit schemes to other defined benefit schemes (or vice versa).
• Members of defined benefit schemes will still be able to benefit from the increased trivial commutation limit which will remain in place once the new tax framework for DC pensions is introduced. This will allow those with total pension wealth of £30,000 or less to take their defined benefit pension wealth as a lump sum.
Private Sector Defined Benefit Schemes
• For most people, retained membership of an existing defined benefit scheme is likely to remain the most appropriate option even after these reforms. Nevertheless, the government believes in maximising freedom of investment options for retirement savings, wherever it is potentially feasible to do so. The question is whether it is possible to extend the kind of freedoms being granted to DC schemes to members of private sector defined benefit pension schemes. In principle, the government would like to find a way to do so. However, in practice this decision is finely balanced and the government intends to proceed with caution. Specifically, the government is concerned that a large scale transfer (or anticipated transfer) of members of private sector defined benefit schemes to DC schemes could have a detrimental impact on the wider economy. The government is therefore consulting on the associated issues and risks and will advise further on this in due course.

Comments

For those individuals who still want the security of a guaranteed income then purchasing an annuity will remain a good appropriate option. Equally, for those who want absolute control over their finances in the very short term they will be able to extract all of their pension savings in a single lump sum payment, subject to income tax at their marginal rate on the element of the pension fund remaining after the payment of the PCLS. Whereas for those who do not want to purchase an annuity or withdraw their money in one go, but would prefer to keep it invested and access it over time, they will be able to select an appropriate drawdown product.

The decision as to whether an individual should withdraw their entire pension fund in one go will very much depend on the total amount of tax this option will be subject to. This position is yet to be clarified by the Government as they have not yet confirmed what tax will be applied on funds that remain within a pension fund upon the death of a member. The Government also needs to clarify how these death benefits will then be treated from an inheritance tax perspective.

In simplistic terms, if the Government elects to reduce the tax payable on pension funds upon the death of a member to 40%-45% and these funds are not then added to the personal estate of the member, then it is unlikely to be in the interests of the member to withdraw their pension fund in one go. This is because by withdrawing the pension fund in one go the member will potentially find themselves subject to a 45% income tax charge on part of the withdrawal and furthermore the withdrawn funds would then form part of their personal estate and therefore potentially subject to a future inheritance tax charge.

Lastly, the introduction of the single tier pension, due to come into effect from 6 April 2016, will also significantly change the state support on offer to pensioners, providing greater certainty of their income and lifting a significant number above the level at which they are eligible for means-tested benefits.

LONDON, June 4 (Reuters) - Britain's pensions industry has criticised government plans to introduce collective workplace pension schemes, which formed a part of the legislative programme for the coming year announced on Wednesday. In a ceremonial speech delivered by Queen Elizabeth, the government confirmed plans for collective defined contribution (CDC) schemes, part of an overhaul of UK pensions that will also remove the need for retirees to buy annuities with their savings. ID:nL6N0MG4MJ But the plans for CDC schemes - which the government has named Defined Ambition schemes - were lambasted by the pensions industry, which warned they would add to a welter of reforms that the industry may struggle to deal with. "We wonder whether the introduction of rules to allow collective DC arrangements in the UK is a bridge too far for employers and the pensions industry," said Stephen Bowles, head of defined contribution at asset management firm Schroders SDR.L . The spate of proposals reflects growing concerns in Britain and other mature economies that ageing populations, with more people living longer in retirement, are not adequately prepared financially and are too expensive for governments to fund. Under the new legislation, three mutually exclusive types of scheme will be available: defined benefit (or final salary) schemes, which are being phased out by most employers; defined contribution schemes, in which workers build up individual pension pots; and the new collective schemes. Supporters of the collective schemes say they would reduce costs, as they have the advantage of economies of scale, and could bring richer returns because assets can be kept in riskier investments such as equities, rather than being transferred into safer asset classes as members approach retirement. ID:nL6N0MG4MJ LAYER OF COMPLICATION But Bowles noted any cost advantages would be offset by a cap on charges already announced by the government. And he said CDC schemes could be at odds with the abolition of compulsory annuities, as they would be designed to provide long-term income in retirement. "The announcement on CDCs seems at best inconsistent with other pension policy, and at worst as another layer of complication in an already overcomplicated industry," Bowles said. Mark Wood, CEO at advisory firm JLT Employee Benefits, said: "While investment returns and life expectancy conform with expectations, the system brings some benefit. Outside these norms ... the system breaks down. "Annuities protect the individual from investment risk and living longer than expected. Defined Ambition gives no such guarantee," Wood added. The schemes have, however, received cross-party support, with opposition Work and Pensions Minister Rachel Reeves saying last week they could boost returns by up to 30 percent - an argument previously made by Pensions Minister Steve Webb. But some argue that the idea of collective schemes runs counter to the decision to give retirees increased flexibility, as set out in March's budget. ID:nL6N0MG4MJ Neil Shillito, investment manager at SG Wealth Management, called the plans "muddled thinking in the extreme", while Tom McPhail, head of pensions research at financial services firm Hargreaves Lansdown, said: "An employer selecting a CDC scheme may have to explain to their staff why they'll be missing out on these new pension freedoms. "Good luck with that." Critics also warned that predicted returns from the schemes could be too optimistic, noting they had had a mixed record in Denmark and the Netherlands, where 55 out of 415 collective pensions schemes cut benefits to pensioners last year. Insurers, many of which were left reeling after the budget, may be set to suffer further from the changes, which could deliver another blow to their profitable annuities businesses. Shares in major pension provider Standard Life SL.L fell earlier this week as investors worried about future profit margins, after newspaper reports confirming plans to introduce legislation for the collective schemes.

To all BarclayStockbroker SIPP account holders, My SIPP account is not showing in my account view so I can't trade, I have reported it and they currently investigating.

Have you checked yours recently?

Gideon Osborne backs down on radical pension reform:

Osborne has been forced to abandon a package of pension reforms, including reducing tax relief for higher earners, amid growing concern that their introduction could have prompted a backlash from "affluent voters".