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Final salary pension

Final salary pension

Old Apr 5th 2009, 4:43 am
  #16  
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Default Re: Final salary pension

I don't really understand all the pros & cons but have put my trust in our UK financial advisor who said that anyone who suggest that I transfer my NHS final salary pension should be avoided at all costs!
As others have said, it is a very individual thing!
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Old Apr 5th 2009, 7:56 pm
  #17  
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Exclamation Re: Final salary pension

Wow
Thank you all for your responses that has given us something to think about. Ours are both goverment pensions, we are retring to come to Oz so we take up resdency in July. We are aware we need to transfer them before they go into payment.
Has anyone arranged themselves to transfer into a superfund? Our advisor is going to charge us 3% which is a lot of money, I guess you are paying for their knowledge.

many thanks one & all
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Old Apr 5th 2009, 8:34 pm
  #18  
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Default Re: Final salary pension

Originally Posted by bonniebuster View Post
Wow
Thank you all for your responses that has given us something to think about. Ours are both goverment pensions, we are retring to come to Oz so we take up resdency in July. We are aware we need to transfer them before they go into payment.
Has anyone arranged themselves to transfer into a superfund? Our advisor is going to charge us 3% which is a lot of money, I guess you are paying for their knowledge.

many thanks one & all
If they are government occupational pensions then they will be final salary and index linked.

Get professional advice and think very carefully before you move them.

Such pensions are like gold dust.

G
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Old Apr 5th 2009, 8:36 pm
  #19  
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Default Re: Final salary pension

On another note......why on earth would you want to leave Whimple to come to Australia??
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Old Apr 6th 2009, 7:02 pm
  #20  
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Default Re: Final salary pension

How about any erosion which might take place due to unfavourable exchange rates if all your pensions are in the UK and need to be tranferred monthly/
And if you are on a CPV and retire bfore you go you may not really have any choice but to leave your pensions in the UK. Does anyone find this worrying?
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Old Apr 6th 2009, 7:41 pm
  #21  
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Default Re: Final salary pension

I do not know what a CPV is, some sort of visa.? We are coming out as returning citizen and spouse with a PR visa. Is not the whole thing worrying?
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Old Apr 6th 2009, 7:43 pm
  #22  
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Default Re: Final salary pension

Originally Posted by Grayling View Post
On another note......why on earth would you want to leave Whimple to come to Australia??
Have you lived in Whimple? It is a cold hole!!
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Old Apr 6th 2009, 9:32 pm
  #23  
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Default Re: Final salary pension

Originally Posted by bonniebuster View Post
Have you lived in Whimple? It is a cold hole!!
My wife's grandfather was a manger at Whiteways.

I think calling a pretty Devonshire village a 'cold hole' says more about you than it does about Whimple.
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Old Apr 6th 2009, 9:34 pm
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Default Re: Final salary pension

Originally Posted by DaveandLinda View Post
How about any erosion which might take place due to unfavourable exchange rates if all your pensions are in the UK and need to be tranferred monthly/
And if you are on a CPV and retire bfore you go you may not really have any choice but to leave your pensions in the UK. Does anyone find this worrying?
Not a problem....swings and roundabouts.

My pension is guaranteed and index linked.....I can live with exchange rates.

Most Australian Superannuation schemes have taken a hammering recently.
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Old Apr 6th 2009, 11:22 pm
  #25  
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Default Re: Final salary pension

Originally Posted by DaveandLinda View Post
How about any erosion which might take place due to unfavourable exchange rates if all your pensions are in the UK and need to be tranferred monthly/
And if you are on a CPV and retire bfore you go you may not really have any choice but to leave your pensions in the UK. Does anyone find this worrying?
I am on a CPV and have my final salary scheme sent out each month, just accepting whatever rate is current. Some people have it paid into a UK bank and choose the time to transfer chunks, but quite honestly who knows when the time's right? Either way it's win some, lose some. All you can do is forget about "good" rates and accept it's part of living abroad. The frozen part is something else....
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Old Apr 7th 2009, 8:33 am
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Default Re: Final salary pension

True, exchange rates do go up and down periodically. However, it is the longterm effect which worries us. If you are going over to Australia on a parent visa and are retired, it is likely that you could live another 20 years of so (with luck!). When I look at today's exchange rate and look at the rate we got when we visited my brother about 8 years ago, the rate has been eroded by almost a third. I don't think this is going to get any better and it can be a serious consideration for anyone wanting to spend their final years in Oz with sons or daughters with effectively little or no control over how much pension you will be getting in 5 years time.
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Old Apr 7th 2009, 9:54 am
  #27  
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Default Re: Final salary pension

Originally Posted by DaveandLinda View Post
True, exchange rates do go up and down periodically. However, it is the longterm effect which worries us. If you are going over to Australia on a parent visa and are retired, it is likely that you could live another 20 years of so (with luck!). When I look at today's exchange rate and look at the rate we got when we visited my brother about 8 years ago, the rate has been eroded by almost a third. I don't think this is going to get any better and it can be a serious consideration for anyone wanting to spend their final years in Oz with sons or daughters with effectively little or no control over how much pension you will be getting in 5 years time.
I was based in Sydney for 4 months at a time for three years around 1990: I was funded at 2.16 for the first (don't remember the others), so it's not hugely different now.

Certainly there's a downside in letting the monthly rate dictate how many $$ you get but the other argument is that a super fund puts all the investment risk in your court and, unless you buy an annuity, you could run out of money in the long term.

Your call, as usual <g>.
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Old Apr 7th 2009, 10:06 am
  #28  
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Default Re: Final salary pension

On average the exchange rate over the last 30 years or so has been around 2.4. For what it's worth i would never transfer a final salary pension. Just keep the thing in the UK it'll be index linked and transfer it across either monthly or in lumps when it starts to pay out upon retirement. I wouldnt personally worry about swings in exchange rates. if you transfer it over the exchange rate swing will be replaced with worry about stock market fluctuations - I know which i'd rather live with. Start an Aussie super when you get there and that way you are hedging yourself against exchange rate fluctuations. Who knows when you retire having £ coming in may be the best decision you've ever made. You never know.
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Old Apr 8th 2009, 5:03 am
  #29  
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Default Re: Final salary pension

Originally Posted by CaptainMerton View Post
For what it's worth i would never transfer a final salary pension. Just keep the thing in the UK it'll be index linked and transfer it across either monthly or in lumps when it starts to pay out upon retirement.
Final salary pensions are only index linked if they are from a "government" (using that term losely) organisation such as, for example, the old NHS pension, teachers pension etc. If you are a member of one of those you are a very lucky person indeed. And I agree it is most likely that you will be much better off by keeping it where it is.

Final salary pensions from companies are not index linked. And it is not at all certain that you should leave it where it is. You'll need to consider how near/far you are from retirement, the likelyhood of the company staying in business and keeping the scheme going till you retire (if they don't you may not get all that's due to you), what benefits your spouse will get if you die before retirement, what happens if you want to take a tax-free lump sum on retirement (will be taxed in Oz) etc etc.
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Old Apr 8th 2009, 9:09 am
  #30  
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Default Re: Final salary pension

Indeed, this is a point I did not make clear.
My final salary scheme was a company one and had no index linking.

Therefore from the day I left I was locked into a fixed sum that I knew had absolutely no prospect of growth.

So in real terms how much would it be worth when it actually matured ?

Was I to leave this guaranteed sum stagnate or actually try to do something with it to increase it's value over several years?

I chose the latter.
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