Defined Contribution (DC) Pensions
What does "DC" stand for in a DC pension scheme?
Defined Contribution.
What is the key difference between a DB pension and a DC pension?
DB pensions provide a guaranteed income, while DC pensions depend on contributions and investment performance.
What must an agent complete before discussing a pension over the phone?
Compliance (DPA) checks
What is the main reason some people transfer from a DB pension to a DC pension?
More flexibility in accessing their money.
What must an agent check before updating a pension member’s address?
Their pension status (active, deferred, or pensioner).
What happens to the contributions made to a DC pension scheme?
They are invested into funds chosen by the member or default investment strategies.
Annual Pension = ( 1 / Accrual Rate) × Years of Service × Final Salary / Career Average
What is the minimum number of security questions a member must answer correctly?
Three - But do 4 :)
What is a potential downside of transferring a DB pension into a DC scheme?
Loss of guaranteed income and increased exposure to investment risk.
What methods can a pensioner or preserved member use to update their address?
Over the phone, via the CAP portal, or in writing.
What is the minimum percentage of qualifying earnings that must be contributed to a DC pension under UK auto-enrolment rules?
8% (including employer and employee contributions).
(Pres - 54 - DOB 01/05/1970)
I want to know the value of my pension.
What will you advise?
2. Check Scheme rules...
3. Depending on Scheme rules and answers offer a Ret quote / PUP / TV
What legal documents allows someone to manage a pension on behalf of a member?
POA - Power of Attorney - Property and financial
Court of Protection - Property and financial
Name me the four main options for DC pensions...
1. Annuity
2. Flexi Access Drawdown
3. UFPLS - Uncrystallised funds pension lump sum
4. Full Cash Withdrawal
Why might a scheme request a Certificate of Existence (Life Certificate) from a pensioner, and what happens if it’s not returned?
To confirm the pensioner is still alive; if not returned, payments may be suspended until verification is received.
What is the main difference between and Annuity and a Drawdown?
An Annuity provides a guaranteed income for life, while a drawdown allows flexible withdrawals while keeping funds invested.
What is a common reason why DB pension schemes have been closed to new members?
High and unpredictable costs due to increasing life expectancy and investment risks.
What must an agent do if a caller fails to pass security verification?
Refuse to disclose any information and advise the member to call back with correct details.
I have an AVC - What Can I do with it typically?
Typically-
1. Pay into the scheme and buy Years of service
2. Use as TFC
3. Transfer out
Name me 3 ways members can inform us of a COB?
1. CAP
2. Writing
3. OneView
(Preserved- 50)
I want a statement now - What you gunna do about it?
And what is my pensions current value pls?
And I have changed my name...
- Send most current SMPI Statement
- Provide value from oPen or OV : advise member to go online himself.
- Advise member to send in passport or official doc with proof either via post or online (originals)
What is the PIE (Pension Increase Exchange) option?
PIE: Offer member a higher upfront pension in exchange their pension will not increase every year..
What law makes it illegal for an agent to inform a pension member that their identity check has failed?
Anti-tipping-off regulations (Money Laundering Act).
Why can Transfers Decrease / Increase month by month yet Retirement quotes remain the same or go up month by month?
· CETVs fluctuate a lot because they are based on market factors like interest rates, inflation, and scheme funding.
· Retirement quotes stay the same because they are based on a fixed formula and guarantee lifetime income.
Why can making a payment overseas take up to 5wkd longer than UK payments?
Because overseas payments go through third party bank (Citi-Bank) who convert the money then send it the member.