Should I combine?

DontWorryBeHappy

I have worked for my current employer for 23 years, split over two periods of employment, from 1982 to 1999 and from 2005 to date.

As a result I am in two different Pension Plans run by them.

The one that covers my first period of employment has a fund value of £46,000 and the one that covers my current period of employment has a fund value of £43,000.

I am unable to contribute to the earlier plan but am still contributing to the second plan.

Are there any advantages/disadvantages to transferring the value of the frozen Pension Plan in to the active Pension Plan?

Any advice would be welcomed.

dunstonh

Are there any advantages/disadvantages to transferring the value of the frozen Pension Plan in to the active Pension Plan?

yes there are to both. However, without knowing the specific details of both schemes then its not something we can comment on. The old one could be better. It could be worse. It could have a cost to consolidate which may or may not be recovered. Without knowing the facts of both schemes and doing a transfer analysis then its impossible to say. Especially as at the moment you have indicated that in your post that its a money purchase scheme (fund value) but that its frozen which cant apply to money purchase schemes but only very old defined benefit schemes.

Its not really something that can be answered on a forum.

Loughton_Monkey

Yes, it's as long as a piece of string. You have to imagine me asking you whether or not to transfer my cash ISA (2009/10) into my cash ISA (2010/11). You could only answer that if you know the interest rate of both, whether the latter one allowed transfers in, and whether the old one was in a fixed term or not.....

For your own benefit, at least clarify what you mean by 'frozen'. We all understand that no more contributions are going into it, but surely the funds are growing? How many units in what funds? Are you happy with the funds? What do they charge? Why did the employer change from one provider to another? Could it be that it was a Final Salary scheme?

DontWorryBeHappy

Many thanks for the responses. I meant frozen in as much as I can no longer make contributions to it. I left the plan when I left the Company in 1999 but never transferred the value to another Plan. My contributions were invested in 4 Funds. The value of my Pension Fund goes up (or down) depending on the price of these funds. The number of units I have in each fund is static because I can no longer contribute/invest. I still have the capability to sell my units in any/all of these Funds and re-invest in other Funds that make up the approved list of Funds for the Plan.

In 2004 the Company closed this particular scheme to any new members.

When I rejoined the Company in 2005 I joined a different scheme. The majority of the Investment Funds are the same in both schemes. To me they appear to be only different in name.

Who should I get to look at this to help me with my decision? What type of person/company am I looking for in the Thomson Local or Yellow Pages? What's the going hourly rate for this type of advice?

Cheers.

Loughton_Monkey

If you really want advice, then an IFA is probably what you are looking for. But be careful since there are still a few about who will convince you of 'reasons' to transfer to a scheme other than your new employer's scheme.

Just a thought, but do your company get use of 'free time' from the IFA who set it up for them? Or of they did it directly with the pension company, might they be able to give an opinion?

If you're happy with the funds in the old scheme and the charges are reasonable, then there may be only marginal (or even no) benefit in moving. It is not uncommon to have 2 or 3 pensions 'on the go' in different arrangements.

DontWorryBeHappy

Loughton_Monkey wrote: »

Just a thought, but do your company get use of 'free time' from the IFA who set it up for them? Or of they did it directly with the pension company, might they be able to give an opinion?

Good idea. I will check with both of them (Mercer for the old and Wyatt Watson for the new)

Loughton_Monkey wrote: »

If you're happy with the funds in the old scheme and the charges are reasonable, then there may be only marginal (or even no) benefit in moving. It is not uncommon to have 2 or 3 pensions 'on the go' in different arrangements.

The only real benefit I can see is that if I want to change the Fund in which my monthly contributions are invested, for example from Fidelity Far East Fund to M&G European Fund, I can achieve this in the Active Plan without having to sell my built up holding in the Far East Fund whereas in the Deferred Plan I would have to SELL the existing units to raise the capital to invest in the European Fund.