J
Given the woes of DB schemes at present, is it worth considering leaving the membership of the old company's scheme untouched in order to spread the risk? i.e. two DB schemes are less likely to go belly-up than one.
Of course if the OP were allowed to buy a similar number of years to those worked in the previous firm it would be tempting to transfer, given the higher wage level enjoyed in the new firm.
My point is that you don't usually (ever?) gain an advantage from transferring so, even if the additional security in diversity is small, why not just hang on to the old scheme?If a scheme is wound-up the OP would receive his entitlement in the form of a lump-sum payment anyway, except in exceptional circumstances!
If the OP is allowed to buy added years it will be done in such a way that the years will be based on the higher salary so (other things being equal) it would be a lower number of years.
My point is that you don't usually (ever?) gain an advantage from transferring so, even if the additional security in diversity is small, why not just hang on to the old scheme?
I assumed that the potential for salary growth would always be priced into the amount of service purchased on transfer. If not, it's no wonder so many DB schemes are in trouble!Can gain hugely if there is good salary growth in the new pension scheme, can make a massive difference because benefit links to new salary!
I assumed that the potential for salary growth would always be priced into the amount of service purchased on transfer. If not, it's no wonder so many DB schemes are in trouble!
Having said that, if the OP turned out to be an unprecedentedly stellar performer in the new job, then it would be a good deision to transfer.
A friend of mine was in the same situation as you, he was advised by a financial guy not to leave the DB scheme as the value that would be estimated by the underwriters would be calculated possibly under the real value. He was told to leave his old pension where it is...
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