It may sound provocative, but if your IFA misses your CETV deadline, it could be disastrous, and you may be irritated. It happens infrequently, but what should you do if you miss your CETV deadline? The first thing you should do is not panic!
Before diving into the next steps, make sure to watch our informative video on the subject to fully understand the implications and potential solutions.
The CETV Expiry Deadline
If you choose to transfer out of your Final Salary Pension Scheme, your pension scheme will pay you your Cash Equivalent Transfer Value (CETV).
When a final salary pension member requests a Cash Equivalent Transfer Value (CETV), the scheme’s trustees will issue the CETV within three months of the request and state the date the guarantee applies.
The CETV is then valid for three months from the guaranteed date, and if the client wishes to transfer their pension, they must first seek financial advice from an independent professional financial adviser if the value of their safeguarded benefits exceeds £30,000, and then complete and return the necessary paperwork prior to the actual CETV expiration date.
This should give your financial adviser enough time to conduct the necessary examination and research before recommending a transfer. If your adviser does not receive the necessary information on time, or if there are delays, you may find that they are unable to provide the required suitability report and recommendation within this time window.
If the necessary papers are signed after the CETV has expired, the scheme has the authority to recalculate the CETV. Most plans provide one free CETV calculation within a 12-month period but charge a recalculation fee, which is typically around £250.
It should be noted that if the client’s CETV changes after recalculation, any analysis must be based on the new CETV, which will involve a new related assessment.
What Should You Do If Your IFA Fails to Meet the CETV Deadline?
The first step is to speak with the IFA you worked with, or contact their manager or customer service to find out what happened with their CETV. Allow them time to explain what happened and why they missed the CETV deadline.
If they are unable to provide you with the correct answer or refuse to provide you with any feedback, you may contact the pension ombudsman for free. The Pension Ombudsman is an independent organization authorized by law to handle pension complaints or disputes involving a pension scheme provided by your employer or a pension you set up on your own.
Another option is to contact your scheme and inquire whether they will accept the CETV. We’ve noticed that the scheme might still give you flexibility on the CETV by adding an extra day within a couple of days after the deadline to submit your CETV.
This would typically incur no extra costs for you or the IFA whom you worked, but it provides assurance that the advice can be based on the quoted CETV.
However, in order to secure your CETV after the expiry date, you must submit the following documentation as soon as possible: the client’s signed transfer-out forms, the new SIPP receiving scheme’s signed transfer-out forms, and your financial advice declaration for your final salary plan.
The two following documents, SIPP receiving paperwork and the financial device declaration, can legally arrive 10 days after the expiry date as long as the documentation you signed is on file prior to the CETV deadline.
How Can I Avoid Missing the CETV Deadline?
Missing CETV, on the other hand, can be a nightmare for both you and the IFA you worked with. Everyone is reminded to contact their IFA as soon as they receive their CETV from the ceding scheme. Aside from such a wake-up call, we encourage you to take the following steps to accelerate the final salary pension transfer, if it is appropriate for you:
Get CETV Advice from a Qualified Independent Financial Advisor.
If you want your CETV transfer to be completed correctly, you should work with an independent financial advisor. It will be completed efficiently, and you will be relieved of all stress. Before you request CETVs from your ceding scheme, a regulated IFA can discuss your situation with you and discuss your CETVs.
Have An Open Conversation With Your IFA
An open conversation with an IFA (Independent Financial Advisor) can assist in securing CETV expiry dates. This is due to the IFA’s ability to advise you on the best time to take the CETV based on your financial goals.
The IFA can then ensure that the CETV does not expire before you are ready to take it. The IFA can also advise you on how to get the most out of your CETV. For example, if you want to use the CETV to buy another asset, the IFA can advise you on the best asset type to buy and the best way to complete the transaction.
Complete All Paperwork Accurately And On Time
Completing all paperwork accurately and on time is a critical step in not only securing your CETV, but also expediting the pension transfer process.
We understand that the paperwork you must complete in order to complete the pension transfer contains numerous pages. It could take even longer to complete. However, even if you work on it for a longer period of time, you can be confident that you will complete it on time, which will help you remain calm, especially on the CETV expiry date.
Don’t Miss Out on Your CETV: Secure Your UK Pension with Expert Guidance
As you can see from the above, a missed deadline could cause you to lose your CETV when it expires, which is why you shouldn’t panic if you haven’t prepared your paperwork by the final deadline. If you haven’t done so already, make sure that you contact an independent financial adviser who can assess your situation and advise you as to the best course of action for a free initial consultation call.