Pension Comparison

Final Salary Pension Transfers

The Financial Services Authority’s (FSA) new Pension Transfer rules are now in force meaning that less and less employees will be talked into transferring their funds (and guaranteed benefits) from their companies final salary scheme into new riskier private pensions.

The new rules make it far more difficult for an Independent Financial Adviser (IFA) to give evidence that transferring from a final salary pension scheme is in fact in the employees best interests.

The reason these new tougher rules have come into force is because the FSA has come across some pension opt out cases where the individuals concerned were persuaded to do so even though there was little or no evidence to show it was in their best interests.

The IFA’s who were responsible for the transfers though earned a big fat commission from the transfers so maybe it was only their own best interests they were worried about.

When clients are coerced into taking action that does not actually put them in a financially better position you have to question the motives of the pension advisers concerned.

Here at pension Comparison we are happy to report that all our pension experts are just that and will only recommend a course of action to any person seeking advice if it is based on solid evidence that the client will be better off as a result.

It has long been our belief that “Final Salary” (Defined Benefit) company schemes are virtually unbeatable when it comes to the best possible retirement plans you can get. Under normal circumstances it is unlikely we would advise anyone to leave such a scheme.

There really would have to be exceptional circumstances or some compelling evidence to transfer from such a scheme to a private personal pension. Some of the benefits that people overlook in these schemes is things like “Death in Service” life insurance and widows pension benefits, not to mention the fact that they are often index linked for life.

In the unlikely event that you would want to transfer from such a scheme, maybe due to ill health, you can of course complete our enquiry form and an adviser will call you.


As these schemes are very costly to run a massive number of employers have tried to persuade people to opt out, and a lot of schemes have closed altogether.

Under the new FSA rules an IFA has to now conduct a full transfer analysis to see what the critical yield will be.

With the FSA raising the bar it will be much more difficult for IFA’s to prove it’s a good thing to transfer from the company scheme. We at believe these new rules are excellent and much needed to bring the rogue advisers up to a better standard.