Defined Benefit Pension Review

I have a Defined Benefit pension entitlement and I want to review my options

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Defined Benefit Transfers (40 second read)

A defined benefit pension (also known as a final salary pension) is one which promises a pre-defined level of benefit in retirement (such as 50% of final salary), proportional to your length of service, payable until death. The benefit is defined and contributions to the pension (normally made primarily by the employer) are not defined.

The Defined Benefit pension used to be considered the Rolls Royce of pensions however in recent years many Defined Benefit schemes have become insolvent (their calculated liabilities are greater than their assets) due mainly to people living longer and annuity rates being lower (which increases the cost of providing benefits). Some schemes have been wound up and some have reduced benefits. As such, for some people these schemes have only created the illusion of security in retirement.

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For more information on the pros and cons of staying in or leaving a Defined Benefit Scheme please read this blog post.

If you have a Defined Benefit pension it may well be worth your while finding out what your transfer value is and whether the scheme will make an enhanced transfer value* available to you.

* sometimes the Trustees of a scheme may make a higher transfer value available to entice members to transfer out of the scheme. If you receive an enhanced transfer value offer you must seek financial advice without delay and make sure that you meet any deadlines specified

Taking a transfer value will give you greater flexibility regarding how you can take your benefits and it will mean that your capital is preserved for your dependents in the event of your death. We can show you the retirement options you have if you stay in the scheme and how these differ if you take a transfer value out to a product under your own control.

In general the transfer values which are made available to those leaving a Defined Benefit Scheme have increased in recent years, as a result of lower long term government bond yields. The yield on bonds has remained very low (and even negative) for some time but particularly since 2015. Inflation had been low but is now increasing and we are currently seeing an increase in bond yields.

It is wise then to keep informed of your options. If you ask us to review your Defined Benefit scheme we will;

  • Inform you of what benefits your scheme will provide in retirement and what retirement options you have
  • Show you the retirement options you have if you take a transfer value out of the scheme
  • Assess the adequacy of your transfer value and show you the return you would need to achieve from investing it in order to match the pension promised by the scheme
  • Explain the pros and cons of taking a transfer value

Another issue which very often arises is where a member of a pension scheme leaves an employment through redundancy and waives their right to take a tax free lump sum from the pension as part of this process. We can show you how to recover your right to take a tax free lump sum from your pension.

Contact us today on 01 546 1100 or book a no-obligation Zoom call with us here.

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The material and information contained on this website is for general information purposes only. Neither the writer nor Highfield Financial Planning Ltd makes any warranty as to the completeness, accuracy or reliability of the information or the suitability or availability of products or services, referred to on the website, for any purpose. You should not rely on any information contained on this website as a basis for making any financial, legal, taxation or other decision. The information presented does not include all the considerations which are relevant to the topic discussed as to do so would render it un-readable. When considering any financial issue you should seek the advice of a suitably qualified adviser.

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By Telephone 01 546 1100
Use the Form on this Page
Book a Zoom call with us here.
Happy to start the process? Click here to complete a factfind and tell us your objectives
The material and information contained on this website is for general information purposes only. Neither the writer nor Highfield Financial Planning Ltd makes any warranty as to the completeness, accuracy or reliability of the information or the suitability or availability of products or services, referred to on the website, for any purpose. You should not rely on any information contained on this website as a basis for making any financial, legal, taxation or other decision. The information presented does not include all the considerations which are relevant to the topic discussed as to do so would render it un-readable. When considering any financial issue you should seek the advice of a suitably qualified adviser.

About Highfield Financial Planning

We provide superior advice on Financial Planning services to business owners, professionals and their families. The principal of the firm Eoghan Gavigan has over 27 years’ experience in banking and finance across Treasury, Lending and Wealth Management and is a Qualified Financial Adviser (QFA) and a Certified Financial Planner (CFP). The CFP qualification is the world’s most respected industry designation, held by only a select number of advisers. As Specialist Investment Advisers we can provide you with detailed investment advice on your pensions and investments.

We want you to be comfortable in your dealings with us. We provide a number of suggestions here for ways that you may be able to obtain comfort that we are the right Financial Planner for you.

I would highly recommend Eoghan to anyone looking for expert financial advice. From my first meeting with Eoghan, the level of service has been exceptional. He's extremely knowledgeable, very patient and explains things in way that you can easily understand. I'm delighted with the product he found for me and I hope to be a client of his for years to come.

Gareth M21/9/2020

I dealt with Eoghan regarding my pension. It wasn't a clear cut situation and Eoghan went above and beyond to explain all details and possible scenarios with me. Eoghan constantly kept me updated and aware of any new information without being prompted. Eoghan was efficient, knowledgeable, professional and a pleasure to deal with. I would not hesitate to use Highfield Financial Planning in the future and would recommend this reliable company with confidence.

Patricia Duggan21/3/2022

Eoghan is a pleasure to deal with. Eoghan has a deep knowledge base and is always up to date with latest market developments. I couldn't recommend Eoghan highly enough.

Colm Ryan21/7/2022

As a complete novice when it comes to pensions I was delighted to come across Eoghan. He explained everything that I needed to know and do. He is very professional yet explains everything in ‘lay’ terms. Even during Covid he kept in touch through Zoom and e mail. Thanks Eoghan

Sheila Weller21/5/2022

My partner and I did a financial plan with Eoghan, with a number of scenarios for our future. The final product was very professional, and provided proactive investment and protection options which Eoghan carried out fully for us. We felt it was very good value for peace of mind for our financial future!

Tim Lee21/5/2021

Excellent service provided by Eoghan since I took the decision to take my pension out of the Banks and use a financial advisor to help me maximise incomes from the market. He is always attentive and quick to offer current valuable advice. Happy to recommend Eoghan to anyone interested in getting sound financial advice.

Niall Hearn2/3/2020

For pensions and advice, Eoghan is an expert, professional and thorough. He has a knack for explaining and summarising this important and complex subject in layman's terms. This helps enormously, making you comfortable that you are making the right financial choices for you. He is also a patient and nice guy to deal with.

Bill Glennon18/9/2019

As well as advising me on the performance of my existing personal pension & arranging life insurance policies, Eoghan is also now overseeing our business needs. So far, he has implemented an employee pension scheme & is advising on corporate co-director & key-person insurance. I have found him to be exceptionally knowledgeable and honest and wouldn't hesitate in recommending him to others for either business or personal pensions/investments etc.

Dawn Richardson10/10/2019

We first met when i was made redundant and needed help with moving my pension. Since then, he has advised me on my life insurance policy for my mortgage and helped me to get a much better deal than I had with my bank. He is extremely helpful and I can ask him anything without feeling like it's a stupid question!

Rachel Egan1/2/2020

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