Paula migrated to Australia from England 10 years ago. She spent many years of her early working life employed by a major corporation. She recalls that a significant benefit offered by her employer was a defined benefit pension scheme.
Paula had not given her UK pension much thought, however recently she has seen a number of adverts discussing the potential transfer of UK pensions and is curious as to whether this could be an option for her.
Paula has some basic understanding of how a defined benefit pension operates and thought it was a good thing to have but the advert made the pension transfer sound like a really good idea. She spoke with an ex-pat colleague who suggested a visit to Treysta for an impartial assessment, she leads with the following questions:
- I’ve been solicited by countless ads encouraging UK pension transfers, I hadn’t given it much thought but would that be a good option for me?
- My UK pension is a defined benefit pension, can you help me understand exactly how that works?
- Can we do some work to understand what I can expect to get on a monthly basis from my UK pension?
- There have been some pension scandals in the UK over the years, is there any risk associated with my defined benefit pension?
- Is it even possible to transfer a defined benefit pension, are you able to convert it to a lump sum?
- How can you evaluate the lump sum today vs the defined benefit tomorrow?
- Legacy is important to me, I’ve got three sons and want to give them a start, does my UK pension die with me?
In what is a complex area, taking the time to understand her UK pension will give Paula the information she needs to consider her options. It will also enable better planning as she can dovetail her UK pension benefits into her broader retirement planning.
Having created an advice engagement with Paula, Treysta assist in the following manner;
- They help her understand the concept of defined benefit pensions at a general level.
- With the assistance of a recent statement they help Paula assess the likely future benefit provided by the fund.
- Help Paula understand the risks to defined benefit funds at a general level.
- Deal with Paula’s legacy questions, by helping her understand how to plan for legacy around a defined benefit pension.
- Refer Paula to a specialist business in the UK to evaluate the scheme. Paula is able to separately engage with that business to get a full understanding of the actuarial equation between the value of taking a lump sum today vs a lifetime income stream.
- Assist Paula in integrating whatever decision she makes into his Australian retirement planning.
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