fcbusiness
3
THE BUSINESS MAGAZINE FOR
THE FOOTBALL INDUSTRY
PENSIONS
Ex-footballers act now to
maximise pension benefits
Generally speaking, pensions have attracted a lot of press and public attention for
all the wrong reasons - limited value, poor flexibility and limited death benefits. For
footballers, however, one attractive feature was the recognition of a player’s shortened
earning capacity, allowing benefits to be taken earlier than the rest of the population.
H
owever, ex-players
may have retired with
pensions, which have
failed to keep pace
with technological and
operational change. Far-reaching
and progressive new pension
laws enacted this summer have
created opportunities which may
help address these shortcomings,
however individuals will have to
act swiftly to benefit.
Background
Ex-players most likely affected
are those who were previously
“block/buddy transferred” from
the Professional Footballers’
Association pension scheme to private
arrangements. A block transfer is where
two or more members of the same
scheme transferred simultaneously.
Many retired footballers will already
be accessing their funds having taken
advantage of the early retirement
provisions.
Unfortunately, older pensions
contracts, particularly those
implemented prior to 2001, can offer
poor value, choice and flexibility.
In its February 2014 report, the
Office of Fair Trading identified
that for pre-stakeholder
plans, “there are up to
18 different names for
charges that can be
paid by members1”.
Moreover, across the
industry, some £30
1
billion of assets out of a total of £275
billion (11 per cent), were judged to be
poor value for money.2
Another stumbling block relates
to losing either the protected early
retirement age or tax-free cash levels on
transfer, which historically, could only
be preserved if it were part of a “block/
buddy transfer”3.A recent amendment
to the pension rules temporarily relaxes
this position, allowing individuals to
transfer to potentially more modern,
flexible pension contracts, while
preserving these valuable benefits4.
Solution
If you or your clients transferred out
of the PFA pension scheme some time
ago and now have your own pension(s)
elsewhere, this could be an opportune
“Many retired
footballers
will already
be accessing
their funds
having taken
advantage
of the early
retirement
provisions.”
moment to seek professional, impartial
advice. It may be possible to improve
the environment for your pension, but
action needs to be taken before the 5th
April 2015. A review can either set your
mind at ease that you are on the right
track, or result in securing potentially
enhanced retirement benefits and
options.
Epoch Wealth Management’s pension
review service offers an independent
assessment of your position and
comprises a critical appraisal in terms
of cost, versatility and risk. It results in
a step-by-step action plan to guide you
through the pensions maze and ensure
you comply with the relevant legislative
deadlines.
Epoch Wealth Management offers a
range of financial planning services to
its clients, who are from many different
professions. As an award-winning firm
of Chartered Financial Planners, they
are perfectly placed to offer qualified
expert advice on this and many other
subjects. To get in touch, contact Dr
Markas Gilmartin, founding partner,
at [email protected].
Defined contribution workplace pension market study (revised February 2014), OFT, section 1.15 2 Defined contribution workplace pension market study (revised February
2014), OFT, sections 1.4 and 1.19 3 http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm03106070.htm 4 HMRC Pension Flexibility document 17/07/2014 (page 21)
fcbusiness.co.uk | SEPTEMBER 2014