Why your pension transfer value might be lower than your quoted value
When final salary scheme Trustees calculate a pension transfer value they allow for a three month period for everything to be completed. This includes finalising and returning all required forms, advice declarations and identity documents back to the Trustees of the scheme. In some circumstances, due to many processes and number of 3rd parties involved, it may not be possible to complete the process within the three months. If this happens the transfer value may be recalculated by the scheme Trustee and, in some instances, may be lower.

Why it might take more than three months
- Unfortunately some customers fail to correspond with their adviser at the beginning of the three month period, which means the time available can be significantly reduced.
- Due to the trustees internal procedures, sometimes the ‘start date’ – the day the transfer value is calculated – can be more than a week old before it’s sent to the adviser.
- Some Trustees insist on sending the information requested directly to the customer, and not to the adviser, which can lead to delays.
- The ceding scheme may not have provided enough information for a Transfer Analysis report to be produced. This report is required under Financial Conduct Authority rules. Many ceding schemes outsource their administration to 3rd party firms who can take several weeks to provide the necessary information, and respond to queries.
- The production of the Transfer Analysis report is done by a third-party ‘specialist’ firm, and high volumes of requests can lead to delays – two weeks is a typical timeframe.
- Compliance checking (to assure the advice given by the adviser is suitable) can typically take one week.
- Once the advice process has been completed, the new provider can take a period of weeks to complete and process the application before sending it to the Trustees of the final salary pension scheme.
- Occasionally the final salary scheme Trustees can’t acknowledge that all their requirements have been met in time, as the documents are often unavailable to them when being scanned for periods approaching 10 days. Also additional ID documents such as Birth Certificates and Passports may be requested.
Where all the requirements have not been met (for any reason) within the three month period, the pension transfer value may be recaculated and could be lower.
What can you do as the deadline approaches?
It’s important to be aware of the three month expiry date and liaise closely with your adviser. It may be necessary for you, as the scheme member, to telephone the scheme and obtain confirmation that all necessary documents have been received and accepted, before the expiry date.
If the deadline can’t be met you may need to ask the Trustees NOT to send the transfer money until you have been informed of, and agree to accept, the revised transfer value.
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Call our friendly support team on 0141 729 8500
The value of pensions and the income they produce can fall as well as rise, you may get back less than you invested.
Transferring out of a final salary pension is unlikely to be in the best interests of most people.