Do you hold a Nortel pension?
If you are part of the Nortel pension scheme then it is likely you have recently received a letter from Nortel UK Pensions.
The message from the Nortel Pension Trustees informs you about your defined benefits pension and the options available.
Nortel Networks Background
Nortel filed for bankruptcy protection back in January 2009, fortunately, they have avoided entering the PPF (Pension Protection Fund). Consequently, they are now in the position to pay out on the pension contributions.
The letter will give you an estimation of the current value of your pension pot. Most members have one or more options and there are strict time limits by which you must act if you do not wish to take your ‘default’ option.
What’s the Issue?
In essence, there is one major issue which we have been told by our clients. All the recommended UK FCA regulated IFA’s (Independent Financial Advisers) are unable to offer any advice as they are only licensed to do so to UK residents. If the transfer value is more than £30,000 and you wish to transfer you will need to take independent advice about transferring your benefits out from an adviser who is authorised by the Financial Conduct Authority. If you do not get advice the transfer cannot take place. As a result members of the scheme are finding it a nightmare to find a regulated adviser to speak to.
Harrison Brook is licensed through the Financial Services Commission in Gibraltar. Therefore we are legally able to advise clients throughout Europe and the rest of world. A large number of which are based throughout Canada.
What is the default option?
If you do not reply in time then your pension monies will be used to buy an annuity. An annuity is a type of retirement income product that guarantees an annual income for a set period of time or for life. Annuities are insurance contracts whose payments are guaranteed by the company issuing the contract. The problem with purchasing an annuity in the current market is that due to interest rates being so low and government bonds in such high demand the rate is incredibly low. Offering a very poor guaranteed return.
What can you do?
- First of all, speak to an adviser and allow us to examine your own unique position. We take a fully holistic approach to finding the best solution possible for your current and future requirements.
- Transfer your pension into an International SIPP. Any defined benefits pension will come up against severe scrutiny before being allowed to transfer and rightfully so. The process is long and arduous but the first step should be to speak to an Independent Financial Adviser.
- If the transfer value is more than £30,000 and you wish to transfer you will need to take independent advice about transferring your benefits out from an adviser who is authorised by the Financial Conduct Authority. If you do not get advice the transfer cannot take place.
To find out more about your pension position and options. Contact Harrison Brook today to speak with an advisor to discuss your options. Harrison Brook is a cross-border pension transfer specialists. We can explain and assist in discovering the options available to you. Taking you through the process of gaining valuations up to placement into a suitable solution.