Money Purchase Scheme

A Lighthouse adviser is reviewing his client’s pensions. As the client has changed jobs several times over the years, she now has five separate pensions. Some of these plans are projected to different retirement ages, and the insurance companies are using different rates to project the pensions. The client has become confused about what pension she can expect, and wishes to simplify her arrangements.

Whilst the adviser has experience in pension transfers, he does not have the software available to compare the market to see if it is viable to transfer these pensions. To research all of these plans would be extremely time-consuming. He is also mindful of the recent FSA Report ‘Quality of advice on Pension Switching’ and is wary of giving incorrect advice.

He decides to pass the details to Lighthouse+ who use pension switching software to determine whether it is suitable to consolidate the client’s pension plans. They advise that it will be in her best interests to consolidate three of the plans. The justification for this is recorded using a template based on the FSA’s findings from their report. Lighthouse+ issues a formal report recommending the consolidation of these plans and discusses this with the client. She decides to transfer.

Lighthouse+ handles all the administration associated with the transfer, and the introducing adviser receives 60% of the commission minus his standard group retention.

Why review money purchase schemes?

• The contract charges may be higher than those charged on modern contracts.
• A modern contract might offer a wider and more relevant range of funds.
• Modern contracts may have additional features such as self-investment and/or access to income drawdown.

For further information contact Mark Wilson,
Head of Lighthouse+ Pension Services
Tel: 0845 872 3999 Mobile: 07834 751 931
Email: mark.wilson@lighthouseplus.co.uk