I have two separate deferred final salary pensions from previous employers.

Between them they total in the modest 5 figures pension per annum from the annual benefit statement. (i.e. the "now" pension rather than the "projected at normal retirement" pension, which is obviously much higher). I have 18 years to run to normal retirement.

Is there any way at all than I am able to switch these pensions from their final salary schemes into a pension fund that I am able to manage personally or influence? i.e. If I wished to stick a chunk of it in commoditiy related investments for instance. Is this possible with final salary as opposed to money purchase schemes or is it a contradiction in terms? If my pensions were say, £15k p.a. and annuity rates were around 5% would this imply some transfer value of around £300k or am I barking up the wrong tree entirely here.

If so, how does one go about it, and who are the quality companies in this area? Is this a good idea or a bad idea? Potential benefits/pit-falls?

Much obliged.

I tried this last year, moving a deferred FSP into an H+L SIPP. The first issue was I couldn't move the protected rights portion. I think that rule changes in October. The second issue was that they wouldn't do it without me getting an IFA involved, which they offered to do the math for me for the sum of around 500 quid. At that point it slipped right down my priority list.....

I hope you have more luck than me.

Speaking as a pension trustee (employer nominated rather than professional) and involved in both DC and DB (final salary) I would say that contractor has basically outlined the issues you'll face.

The scheme administrators of the DB schemes can get their actuary to calculate a transfer value. Most DB schemes are desperate to 'get rid' of deferred members (as you must be), as this reduces their unknown liabilities for the future. As such you should have no problem getting said transfer value, but if the schemes were contracted out (NI) then there is an element of 'protected rights' which cannot be transferred to a CIMP (Contracted In Money Purchase Scheme) such as a standard SIPP. Before releasing the transfer value from the DB schemes and particularu because it would not be going to another occupational pension scheme, the trustees would have to sign off that the decision was made by the defered member (you) only after having taken appropriate advice (hence need for IFA). A decent pension IFA, for example, Hargreaves Landsdowne (who I use on a personal basis) can resolve even the protected rights issue for you by ring-fencing.

http://www.h-l.co.uk/pensions_and_retireme...d_retirement.hl

Are you really so confident that your self-investment over the next 18 yrs is guaranteed to provide a better annuity/draw-down at retirement than that of a DB scheme??
For the vast majority of people I would counsel that they keep the DB's (which probably also have inherant life cover & would pay a spousal widows pension).

Unless you are worried about the financial stability of the main employers standing behind the DB schemes, why not keep the DB side as a solid 'guaranteed' amount for retirement and speculate a bit more with a newer SIPP.

Good luck.

Thank you Zadkiel amd contractor for your excellent responses.

Spousal widows benefit was an issue, but no longer ( ) although that raises a different issue about whether to "get one's monies worth" it may be worth remarrying (out of convenience) so the widows pension wouldn't be wasted - I will look into that when I have time and am even older and wiser! Children now just reached maturity so they're no longer an issue.

I shall give it further thought. Until recently I didn't consider financial stability of the schemes to be an issue, but one is a major UK based global bank, and the other a Swiss pharma co. Oddly enough I received a "financial statement" in the post today from one pointing out that whilst the liabilities met assets at the latest actuarial valuation (Nov '06), the scheme transfer value in the event of a winding up was around 40% short of that required to buy equivalent benefits in the market. (£600m against £1bn) I am not sure whether this is good, bad or typical.

Your suggestion to use the existing DB schemes as a backstop and be more speculative with new monies is also an excellent one.

Much food for thought. Thanks again.