Defined benefit pension closing

[Steviesam]

My wifes sister, who is 58, has just over 30k in a defined benefit pension.

She wants to close it and take the cash (she is aware of the tax implications) but they say that is not allowed, and she must keep taking the £101 a month it pays her.

Is that right or does she have other options?

[Edible Roadkill]

Sounds like it’s already drawn down if it’s paying her each month so probably can’t do anything now. Did she take the pension early at 55 or something ?

[lauda]

If it’s already in payment, options are very limited, if not non-existent. Will also depend on what the Trust Deed and Rules for the specific scheme allow, so if they’ve said no, the answer is probably no.

[The Leaper]

How does she know she has £30,000 in her DB pension and what does it represent? Whatever, as she is drawing her pension she will not be able to take any cash out. eg transfer value etc.

R.

[OutInTheShed]

Steviesam said:

My wifes sister, who is 58, has just over 30k in a defined benefit pension.

She wants to close it and take the cash (she is aware of the tax implications) but they say that is not allowed, and she must keep taking the £101 a month it pays her.

Is that right or does she have other options?

30k, 100 a month = 300 months. Break even if you live to 83? Seems about right.
Is the £101 index linked or anything?

[Mr Whippy]

Sounds like it’s already in payment?

I suspect the time to transfer out has been and gone.

[AdamV12V]

Im assuming the £30k is in fact the LTA valuation figure.

£101 pm = £1212 pa, which with the 25x DB multiple gives £30,300 LTA

So the answer likely is, if its a DB scheme there is no £30k in reality, just £101 pm payable and the rest is simply a paper calculation.

Of course, as others have said its all a matter of whats in the scheme rules.

[darreni]

If it’s in payment, the fund (as you know it) has gone. It’s been exchanged for an income for life.