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Will it be a problem that I will retire with 22 separate pension funds ?
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crunchie1
Posts: 47 Forumite
I currently have an old Pru personal pension which I pay a small monthly amount into just to keep it going.
I also have a company pension which I joined 10 years ago. I am a seasonal worker with the company, employed from September to March each year. I have no continuity of employment. Each September I return as a new starter.
The company pension has 6% taken from my wages, and 10% from the company. In the summer it does not get deferred, it simply sits there with no payments going in. When I return to work they automatically resume.
The scheme is now changing for new members because they have had to provide auto-enrolment. We will have to pay in 10% of wages to get the company 10%. I will be forced to have the pension deferred every March, and a new one started every September.
People already in the company scheme, but working full time, will stay in the old scheme. The original scheme stated that if we intended to return to the company all we had to do was inform them when we left, and the scheme would be kept open for us.
I plan to stay with the company, so when I retire I will have 22 separate pension pots. What will be the implications of this ? I am told that only a few can be combined to make one annuity. If I roll the old one into the new one each year will there be charges or other costs ?
It sounds a nightmare for both me and them to administer, and is presumably being done so that there is no implied continuity of employment. They save on things like sick pay at the moment as no-one gets any until they have completed 12 months service. Although I work with people who have up to 35 years of 6 months employment in the same job, none of us ever qualify as having done 12 months. Also after 12 months there is a 10% pay rise which we can never qualify for.
I also have a company pension which I joined 10 years ago. I am a seasonal worker with the company, employed from September to March each year. I have no continuity of employment. Each September I return as a new starter.
The company pension has 6% taken from my wages, and 10% from the company. In the summer it does not get deferred, it simply sits there with no payments going in. When I return to work they automatically resume.
The scheme is now changing for new members because they have had to provide auto-enrolment. We will have to pay in 10% of wages to get the company 10%. I will be forced to have the pension deferred every March, and a new one started every September.
People already in the company scheme, but working full time, will stay in the old scheme. The original scheme stated that if we intended to return to the company all we had to do was inform them when we left, and the scheme would be kept open for us.
I plan to stay with the company, so when I retire I will have 22 separate pension pots. What will be the implications of this ? I am told that only a few can be combined to make one annuity. If I roll the old one into the new one each year will there be charges or other costs ?
It sounds a nightmare for both me and them to administer, and is presumably being done so that there is no implied continuity of employment. They save on things like sick pay at the moment as no-one gets any until they have completed 12 months service. Although I work with people who have up to 35 years of 6 months employment in the same job, none of us ever qualify as having done 12 months. Also after 12 months there is a 10% pay rise which we can never qualify for.
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Comments
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You can have as many as you like. Usually though people aim to consolidate them somewhat before or at retirement.I am told that only a few can be combined to make one annuity.
No. All money purchase schemes can be consolidated.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
If we're talking about the Auto-Enrolment, it's my understanding that your pot goes with you wherever you work - so you'll only ever have 1 NEST Pension?0
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That assumes it is NEST and not any of the other options. Although you would expect any money purchase scheme to be able to stop/start very easily. It is only defined benefit schemes were there could be issues.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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My understanding is that it is the company's defined contribution scheme. It is not a defined benefit scheme. I have not been given the brochure as I am still in the old scheme at the moment, and will not be forced to leave it until January.
An advisor was sent to answer any questions. He said I would have a new pension each year. He may have been wrong of course, but I understood it was so that our employment would not count as continuos service.0 -
It's more like the opposite of that. NEST is the exception to the normal rules. A NEST pot can never move with you when you change jobs, unless both use NEST, it always has to remain with NEST. The ban on transferring out is the main thing that makes NEST the lemon of the auto-enrollment pension bunch.If we're talking about the Auto-Enrolment, it's my understanding that your pot goes with you wherever you work - so you'll only ever have 1 NEST Pension?
Every other personal pension can be transferred as you change jobs, so you only need to have one, or one plus NEST if you're unfortunate enough to have anything trapped in NEST.
Auto-enrolment and NEST are two completely different things and there's no need at all for an employer to use NEST for an auto-enrolment pension scheme. It'll be mostly employers who are too lazy to look for good options or who just don't care about their employees who end up using NEST.
Crunchie1 won't need to have 22 pots because the money can just be transferred into one scheme. Either the current work one or another one that crunchie1 sets up to receive the transfers. There may be small costs for the transfers but unless you want to get an IFA involved they won't be significant. Often completely free.0 -
Crunchie1 won't need to have 22 pots because the money can just be transferred into one scheme. Either the current work one or another one that crunchie1 sets up to receive the transfers. There may be small costs for the transfers but unless you want to get an IFA involved they won't be significant. Often completely free.
Thanks for that. I will stop worrying. The company is a multinational plc and is going to run the scheme itself. The current scheme is with
Legal and General.
Hopefully they will let me transfer in the old pot each year as it will surely save them some admin.
It still feels wrong to be thrown out of the old scheme after ten years though.0
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