Company pension presentation

RobertinHerts

jamesd wrote: »

Is it a salary sacrifice scheme? If it is salary sacrifice, what portion of the employer NI reduction is contributed to the employee pensions (all is good, none is bad)?

Is there any restriction on transferring money out of this scheme into a personal pension I use myself? If it's salary sacrifice can I make a couple of transfers out a year and still benefit from the NI gain of of salary sacrifice?

Is there any restriction on transferring money into this scheme from a non-work personal pension?

Ah, ha. Thanks James. So it may not be a GPP but could be a SS.
The option of transferring out to a personal pension looks very interesting if it's available.

The option of transferring money in isn't relevent to me but could be for others in this morning's session.

AlexPQM

I don't know if I am too late in responding but you should also ask how they are planning to govern the scheme. Your final salary scheme would have had the trustees looking after it, so who will be looking after this one since it is not a trust-based arrangement? GPPs are contract-based, which means the contract is between you and the pensions provider. The company acts as an intermediary only and legally doesn't have to put any governance in place. The good employers always have some sort of governance for their contract-based pension schemes though but it is worth questioning if you are now left on your own.

Although, most of the companies closing final salary schemes open the money purchase ones under a trust-based arrangement, which means the scheme will still be looked after by the trustees. As an ex-DB scheme member, you should also get a decent company contribution.

RobertinHerts

Thanks everyone.

I've learned that it's a money purchase scheme under a trust-based arrangement. As AlexPQM indicated, 8 minutes after the presentation commenced, that's probably because those in the previous Final salary scheme were moved into it a few months back. From the comments above I assume GPP is a generic form and Money purchase with Trustees is one format available within GPPs.

Admin is by Capita Hartshead and the scheme is managed by Legal and General.

Participants can choose 'Lifestyle', have no further involvement and have the computer manage it all based on their age, or spread across 16 funds. I'm told that most participants have ticked the 'Lifestyle' box. I, on the other hand, will be deciding what percentage to put in each fund. Most will probably get zero. Almost all are trackers, only Property is activly managed. One of my colleagues noted that the Ethical fund has the second highest charges even though it tracks the FTSE4Good index.

Rebalancing, called 'switching', can be carried out up to four times per year without incurring charges.

When Addtional Voluntary Contributions (AVC) were brought up I asked whether they had any advantage over ISAs, the answer was "no". This key point is not mentioned in the booklet.

Life insurance also covers the pot, payable at the discretion of the trustees.

It's not clear from the booklets who the contract is with.

Thanks again everyone.

Robert

dunstonh

I'm told that most participants have ticked the 'Lifestyle' box

That is the lazy investor option. Will never be the best but will never be the worst. It doesnt require reviews, rebalancing etc. Although you shouldnt expect anything special from it.

Rebalancing, called 'switching', can be carried out up to four times per year without incurring charges.

If you are going to self select funds then you need to manually rebalance. Although with just 16 funds, there may not be the scope to make much difference on self select apart from a bit of tweaking.

It's not clear from the booklets who the contract is with.

Legal & general. Capita are effectively the IFA for the scheme if its a GPPP or administrator if its COMP/CIMP. With COMP/CIMPs the administrator takes on a lot of the paperwork and admin that the insurer would normally do. This allows the insurer to offer better terms which is then often reflected in the terms offered to the members. Although it does depend on whether the employer is paying Capita or the charges within the pension are paying them.

When Addtional Voluntary Contributions (AVC) were brought up I asked whether they had any advantage over ISAs, the answer was "no". This key point is not mentioned in the booklet.

AVCs are irrelevent with money purchase schemes. If you want to pay more in then you pay it into the same scheme (or your own scheme if you want greater investment choice). There is no need for them to offer an AVC as it would do exactly the same job as a COMP/CIMP (and if its a GPPP then you cant have an AVC anyway)

As to whether its an ISA vs pension decision then that really falls under regulated financial advice and they wont want to offer any opinion on that as what is best will depend on personal circumstances.

feesarefare

dunstonh wrote: »

That is the lazy investor option.

Rubbish - its the right choice for 99 per cent of the population

Dont you read the threads on this forum.

If you are going to self select funds then you need to manually rebalance. Although with just 16 funds, there may not be the scope to make much difference on self select apart from a bit of tweaking.

Yep so just use the lifestyling option and find something better to do with your life

Legal & general. Capita are effectively the IFA for the scheme if its a GPPP

but its not a GPP- cant you read. More helpful to give the OP practical advice rather then trying blind them with meaningless detail.

AVCs are irrelevent with money purchase schemes. If you want to pay more in then you pay it into the same scheme (or your own scheme if you want greater investment choice). There is no need for them to offer an AVC as it would do exactly the same job as a COMP/CIMP (and if its a GPPP then you cant have an AVC anyway)

OP - CApita will call any contribution you make over the minimum required an AVC , it make them sound more important.

As to whether its an ISA vs pension decision then that really falls under regulated financial advice and they wont want to offer any opinion on that as what is best will depend on personal circumstances

But they did offer an opinion - they said NO! quite wrong but Capita make their own rules up

RobertinHerts

feesarefare wrote: »

dunstonh wrote: »

That is the lazy investor option.

Rubbish - its the right choice for 99 per cent of the population

Dont you read the threads on this forum.

Yep so just use the lifestyling option and find something better to do with your life

RobertinHerts comments: Shame, given that MSE users are already doing things that are as least as complicated, like buying house insurance. It's only funds not individual shares. I suppose it sounds scary.

but its not a GPP- cant you read. More helpful to give the OP practical advice rather then trying blind them with meaningless detail.

RobertinHerts comments: Oh, I'd assumed, from earlier coments, that it was a GPP - what do those other initials,COMP/CIMP, mean dunstonh?


But they did offer an opinion - they said NO! quite wrong but Capita make their own rules up

To be fair he didn't exactly say 'No' and but admitted that ISAs are more flexible.

The presenter was inhouse not Capita. He certainly didn't make it clear that the contract was with L&G.

Thanks for your comments Feesarefare. Useful for subsequent readers.

AlexPQM

This scheme is not a GPP, GPPs can be only be contract-based. As your scheme is trust-based, I would assume it would be called XX Pension Scheme - (Defined Contribution (DC Section), as you will still have the DB section which needs to be looked after although it is closed...there still are scheme members who are defered (meaning no longer contributing) and the pensioners. Or it could be a stakeholder arrangement, these can be trust-based too.

So basically, Legal & General are the provider, so all the investments will be done through them. As correctly pointed out above, Capita will act as an IFA, possibly an administrator. I assume they will also be looking after your communication programmes...they are actually quite good at that, depending on how much the trustee of your scheme is willing to pay for it. But where DBs close and DCs are put in, the comms are usually quite good.

feesarefare

AlexPQM wrote: »

This scheme is not a GPP, GPPs can be only be contract-based. As your scheme is trust-based, I would assume it would be called XX Pension Scheme - (Defined Contribution (DC Section), as you will still have the DB section which needs to be looked after although it is closed...there still are scheme members who are defered (meaning no longer contributing) and the pensioners. Or it could be a stakeholder arrangement, these can be trust-based too.

True

So basically, Legal & General are the provider, so all the investments will be done through them.

Agreed

As correctly pointed out above, Capita will act as an IFA,

Can you clarify this for readers please. My understanding In dealing with and reading their website, Capita are purley an administrator. They are the people that are responsible for the Arch Cru debacle.

In what capacity would they act as an IFA?

I assume they will also be looking after your communication programmes...they are actually quite good at that, depending on how much the trustee of your scheme is willing to pay for it. But where DBs close and DCs are put in, the comms are usually quite good

DOnt you think companies like Capita have a vested inerest in recommending firms to go for a trust based scheme rather than a much more flexible GPP because they would be doing themselves out of a job?

AlexPQM

Calling Capita IFA is a mistake on my part - they won't advise but they can inform. I work with them quite closely in my day-to-day job and doing presentations and regular workshops for scheme members is part of their remit.

I don't think they would be doing themselves out of the job. They are putting in a lot of CB schemes as well and help them set up governance committees or conduct annual reviews of the schemes to ensure there is some sort of governance. They are not only administrator, in fact, in the past year or two they absorbed a number of consultancies, so administration is only a part of what they do.

Loughton_Monkey

They are known as "Crapita" in that responsible and informative organ called 'Private Eye'