Assessing transfer of pension pots

LostSocks

Hi,

My husband's work have decided to change their financial advisers and who have decided to change all their pensions to a new company (was Standard life, will change to Scottish Equitable in Feb) and are also implementing salary sacrifice.

I've got my head around the salary sacrifice and have worked out it we will join this scheme as it is beneficial to us. But they FA's have mentioned that it might be best to transfer the old pension over to the new.

My husband has now got 5 frozen pension pots. As we don't trust the companies FA to give us the proper advice (mainly because the company is known to screw it's employees over in many aspects and also the reason for changing schemes was unbelievable). What information do we need to help us work out whether it's a good idea to transfer them? I'm guessing we need to contact each pension scheme to get a transfer rate. Is there any info on the web that I could read up on so I'm more informed about this? and also know whether the FA's are being truthful with their advice to us.

Thanks for your help.

dunstonh

What information do we need to help us work out whether it's a good idea to transfer them?

You need to complete a transfer scheme analysis (known as a TVAS). This compares the old and new schemes and looks at the pros and cons of a transfer.

I'm guessing we need to contact each pension scheme to get a transfer rate.

That along with scheme details, investment choice, charges, guarantees, projections etc.

and also know whether the FA's are being truthful with their advice to us.

If they are IFAs, they should have done a TVAS as part of their recommendation to transfer. If they have and they can show it to you and its clear the benefits are better then they are being compliant. If they haven't then they are not.

A firm that is doing pension switches without proper analysis and comparison is asking to be fined.

LostSocks

Thank you

dunstonh

for your reply. I'll tell my hubby about the TVAS and see what they have done. I know he has an individual talk with them in a few weeks, so I'm trying to do our homework to have the right questions to ask them ready. Thank you again.

LostSocks

Dunstonh, was just re-reading this and wondered if you could make something clearer to me please. As the company has decided to change their company pension scheme from Standard Life to Scottish Equitable. Should they be doing a TVAS on this to show why it is better? or is this only on the transfer amount itself in the standard life pension pot? Should they be doing anything to prove to us it is a better pension scheme or do we just have to take their word for it.

Thanks again

dunstonh

As the company has decided to change their company pension scheme from Standard Life to Scottish Equitable. Should they be doing a TVAS on this to show why it is better?

No. The company scheme for future benefits doesnt have the same requirement, at least not with moving from one group scheme to another group scheme.

Should they be doing anything to prove to us it is a better pension scheme or do we just have to take their word for it.

Normally, the firm gets the IFAs in to talk to staff to discuss the differences and where they could be better off or worse off.

The benefits could be purely at the employer side (e.g. easier online submission and online admin compared to paper) or they could be in the pension from a wider fund selection or a discount on the AMC.

Off the record, I dont like standard life and think the scot eq offerings are better. So, I would be surprised if its worse.

LostSocks

Thanks again for your advice, I'm feeling like we understand it better now. Not totally, but at least understand what information we need to make informed choices. Thanks again.

yelf

my understanding is that a TVAS is only needed with regards to occupational pensions: if you are going from a GPP to a GPP, then in this case it is really just a comparisons on charges. Scot Eq do active member discount which would be cheaper than SL.

Regards the old pensions: they say he MIGHT be - so they arent saying he should. If they are frozen (as in he is a deferred member) then a TVAS would be needed - i doubt they would do this though. If they are paid up (ie: personal pensions) then a comparisons on charges should suffice

dunstonh

my understanding is that a TVAS is only needed with regards to occupational pensions: if you are going from a GPP to a GPP, then in this case it is really just a comparisons on charges. Scot Eq do active member discount which would be cheaper than SL.

A full TVAS is required on an occupational scheme. However, you can still use the same software to do one on personal pensions. Its a lot easier to do but it is an FSA mandatory to have at least compared your recommendation with the existing scheme.

The most common piece of software that IFAs use is O&M but there are others.