Case Studies

February 5, 2023 | Later Life Planning

Final Salary Transfer

Background

Our client was an employee of a large multinational company, giving over 30 years’ service. They were made aware of the potential to transfer out their final salary pension to achieve specific goals. They were within 12 months of retirement and had already established their retirement income needs. 

Our Approach

During our meeting, we discussed in detail that the premise is a transfer would not be suitable. However, we ensured that the needs and objectives were established to determine if a transfer would be viable. 

We found out that our client had immediate capital needs and had no suitable alternative way to raise the capital. We also found out that the client had guaranteed sources of income that would meet their essential and discretionary spending needs. It was therefore established that a transfer could be viable.

After careful analysis, including cashflow forecasting, stress testing and what if scenarios, there was evidence that a transfer would not impact on the clients retirement needs and the additional capital wouldn’t create any income shortfalls throughout their retirement. Despite this, we still had to ensure that their overall financial position was secure enough to give up the guaranteed income offered via their former employer.

The Outcome

Once we were happy that the client was aware of what they were giving up and could justify the reasons for the transfer, a recommendation was made. The client’s attitude to transfer risk, investment appetite, capacity for loss and retirement goals were all considered. The advice ensured that the client’s immediate needs were met, without impacting on their overall retirement goals. Once the plan was established, we ensured ongoing support and management was put into place. This gave the client piece of mind that they had made the correct decision.