Final Salary Schemes

Final Salary schemes are extremely complicated pension arrangements, with many obvious and some not so obvious features that need to be carefully considered in each case. Many people have these as an historic pension arrangement and although they are generally seen as the Rolls-Royce of pensions, and in most cases it would not be advisable to transfer, they do have some drawbacks in terms of inflexibility and funding issues.

For example, those who are in poor health or are not married may find that at retirement they could have more flexible pension options elsewhere. Others who have more of an appetite for risk may wish to transfer their pensions well before retirement to their own personal plans to have wider investment access and control. The analysis of whether a transfer is suitable depends on many mathematical calculations along with a detailed knowledge of the pension schemes and the individual’s own circumstances and requirements. This will include details of existing guaranteed income levels built up, family situation including who you would like to benefit ultimately, and other assets including property and investments. Specialist financial advice is essential.

We utilise Cash Flow Modelling as a key element of the advice process.

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