Case Study 5 - Pension Sharing #2

Background

  • Mrs D, aged 60, had received a 50% pension share against her ex husband’s Wyeth defined benefit scheme. The trustees were offering shadow membership on a money purchase basis.
  • Mrs D was becoming increasingly concerned as the pension sharing annex (P1) had been rejected by the scheme trustees as being incomplete.
  • She was looking for advice on what to do next having spoken to a number of financial advisers
  • She had a previous pension entitlement from her service with a bank.
  • She may wish to draw benefits earlier than her intended retirement age of 65 to purchase a property.

Concerns

  • Mrs D was unsure why the pension sharing order had been rejected.
  • She was confused about her options and in particular whether the existing scheme, a QROPs or a new arrangement was appropriate for her circumstances.
  • She was returning to the UK from a break abroad and needed everything completing before she went back to work.

What We Did

  • Reviewed all of her options and concluded that she should transfer her 50% pension share to a personal pension arrangement in her own name.
  • Discounted the existing arrangement as the trustees would have had discretion on whether she could retire early or not.
  • Undertook a psychometric risk profile exercise (see www.FinaMetrica.co.uk) to develop a more rounded understanding of her risk tolerance and built her a suitable asset allocated investment strategy in line with this.

The Results

  • Mrs D has a pension entitlement in her own right which she understands with the flexibility to draw benefits as and when she wants without the possible intervention of anyone else.

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