Pension Sharing Transfer Costs

Newcomer

This particular company have been less than helpful towards me, (treated as an outcast no less), and looking after their member's interest. :'(

Drat, yes just checked the Order and it is in there.

"Date by which you must set up the pension credit:

4 months after receipt of the certificate of decree absolute."

Oh dear, seems my hopes have just been dashed.

DiggingOut

I don't understand this thread much, but can't Newcomer use Cavendish and get the commission reinvested in the pension?

Forgive my ignorance if I've said something stupid.

Newcomer

Replying to Pal again:

Re: "The 3k is a percentage of the amount you are transferring. Remember that this is not removed from your fund but is taken back by SL through their fees over a period. "

Do you mean will be included within the 1% charges? Because if so, then this would be acceptable.

DiggingOut

If you are being quoted 1% a year (stakeholder?), then yes, that is all you will pay. The commission is being paid to your IFA by SL for bringing you to them, and they will make their money, both for paying the IFA and for managing your funds, out of the 1% a year.

Fixed fee means that your IFA is paid an agreed amount, and will not be paid anything by SL. What SL would have paid him will be paid into your pension fund, with the net result being that you get a lower annual fee.

This is why I suggested Cavendish. Check Martin's articles on the main site re: pensions/repensioning. If you know how you want to invest the pension fund, you can save a lot of money by using a discount broker rather than an IFA. If you don't know and need the advice, the IFA will earn his money.

Newcomer

Thanks will check it out.

Pal

The point is that you might get a lower annual fee by paying your IFA a fee instead of letting him get paid commission. Over time you should save money. Repensioning would not save you any money in this situation.

The downside is that you have to pay the cash fee up front. Ask the IFA to give you quotes in writing and get him to advise you on which route is best for you to follow.

This particular company have been less than helpful towards me, (treated as an outcast no less), and looking after their member's interest.

It is illegal for the Trustees to treat you differently from other members, including your husband, as you are a scheme beneficiary as well. You can complain about this if you feel you are being unfairly treated and have lost out as a result. The scheme will have a complaints procedure that you can use before going to the pensions ombudsman.

Drat, yes just checked the Order and it is in there.

"Date by which you must set up the pension credit:

4 months after receipt of the certificate of decree absolute."

Oh dear, seems my hopes have just been dashed.

No they haven't. That part of the order tell the Trustees (who are receiving the order) that they have to comply within 4 months. Unless it says somewhere else that a pre-condition of the order is that you must agree to transfer out, then they probably cannot force you to do so.

Please note that these matters are complicated (verging on legal advice) and I cannot promise that you will win, but it is worth pressing the Trustees on allowing you to receive the pension from their fund, and simply not signing any consent to transfer in the meantime. You can then compare what they are offering with the benefits of transferring out. The IFA should be able to help with the comparison.

In the long run you still might need to transfer out but you might as well try your luck!

Let us know how you get on.

Newcomer

Yes, I certainly will let you know, though this thing has dragged on for months, so if I don't get back to you quickly, it's not that I've forgotten. The pension company dragged their feet for ages after being requested info by my IFA and have only recently given a breakdown of the fund (protected rights etc), after they received our £750 fee for administering.

Then I queried why I had to name the pension company I would be using on the form to them, when they'd failed to send the breakdown of info to get a comparison. My IFA said to insert SL and that we could change it later if necessary. Now my confidence has gone in my IFA 'cos SL is seemingly being pushed as opposed to something called a Section 32 or some other number?? I am on information overload and have lost faith.

Anyway, will continue the struggle armed with your good advice. Thanks.

Pal

A section 32 policy is a deferred annuity.  In other words is buys a specific pension benefit at a certain retirement age. These are usually good if you are buying a specific benefit.

Your IFA may be recommending SL because he thinks that the SL policy will grow to provide a larger pension than the S32 annuity.

More to follow later...

Newcomer

Have a good weekend, you deserve it, looks like you've worked VERY hard today, thanks Pal.

DiggingOut

The point is that you might get a lower annual fee by paying your IFA a fee instead of letting him get paid commission.  Over time you should save money.  Repensioning would not save you any money in this situation.

Pal, don't the same principles as repensioning apply? In either case, you go to a discount broker and get the pension fund, with reduced annual fees, for minimal cost. If the IFA can do it, why not go a step better and go through a discount broker, for less?

My son is starting a stakeholder. He knows what he wants, and will do better by not going through an IFA.