Trustees of the Sony and Michelin pension schemes are appointing financial advisers to support members that want to transfer out from their schemes.
As first reported by FTAdviser’s sister publication Pensions Expert, the Sony UK Pension Scheme appointed independent financial adviser WPS Advisory to provide free advice to its members.
The pension fund, with 3,316 members – from which 2,274 are deferred – offered the advice to members approaching retirement, and sent letters to the individuals within the scope of the process, which will be carried out over the next three to six months, according to the scheme’s 2018 pension report.
The decision to provide free advice was made by the company and the scheme trustees. Sony will consider whether to provide the free advice as a standard ‘at-retirement’ benefit or as another ‘one-off’ offer to members who are eligible to retire.
During 2018, £21m was transferred out of the Sony UK Pension Scheme, the report revealed.
The Michelin Pension and Life Assurance Plan, which closed to accrual in 2009, is currently in the process of vetting a number of IFAs to choose one that scheme members can use if they wish.
The chosen firm will have links to the scheme administrator, Capita, and will learn how the plan works – so "getting advice will be simpler and cheaper," the trustees stated in a newsletter to members.
The advice fee will have to be paid by the member, but the Michelin scheme will be allowing individuals to make use of the advice allowance of £500.
Introduced in 2017, this allowance allows pension scheme members to withdraw £500 a year tax-free, up to three times in their life, to pay for financial advice.
Paying for advice remains the responsibility of members, which are still free to use an IFA of their choice, the trustees noted.
FTAdviser reported in February that there are a mere than 10 IFA firms in the country deemed suitable to be hired by pension schemes for this type of advice.
When a pension scheme appoints a financial adviser to assist their members with a pension transfer, the cost of advice can be slashed by up to 75 per cent, according to experts.
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