To Transfer a Pension or Not?

polybear

Hi all,
Some years ago I was mis-sold a Barclays personal pension; I then joined my company final salary scheme and Barclays compensated me by paying a sum into my company scheme such that I had joined them from day one. However, because my Barclays scheme was contracted out of serps there was a sum of money in my personal pension that pre-dated the commencement of the pension (sounds crazy I know - it's all down to rebates and incentives received from the government). The current value of this money in the Barclays scheme (Protected Rights, which I no longer pay into since joining my employer's scheme) is around £6.5K; in April 1999 it was valued at £4.8K so I'm not too impressed with fund performance. It's invested 50% Pensions Managed Series 2, 50% Pensions Equity Series 2.

I now also pay into my company AVC scheme with Standard Life; the fund is invested in the SL Blackrock Aquila HP (50:50) Global Equity Pension Fund and is currently valued at around £28K. This AVC started in 2001 with a £6.5K lump sum then regular monthly payments; I have paid around £16.5K into this fund so it looks a somewhat better return than Barclays...

I'm thinking of transferring the Barclays money into my Standard Life Scheme; Barclays are OK with this it seems. My employer currently states the following regarding transfers to my Standard Life policy:


"You may be able to transfer benefits from previous membership of another scheme or a personal pension into the Scheme although please note that contracted out benefits cannot be transferred in"

I'm guessing that my Barclays Protected Rights fall foul of this ruling; however Standard Life tell me the rules/law is changing (6th April?) such that this will no longer apply.
So....is it a good idea to transfer the funds please? Any upsides or downsides would be much appreciated.

Many thanks.
polybear

polybear

Anyone please?

Thanks
Brian

xylophone

As I understand it,from 6th April 2012, the concept of ‘Protected Rights’ will no longer exist. From this
date, the restrictions around what planholders with Protected Rights can do with their
Protected Rights funds will cease and all funds will be treated in the same way.

http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/@over50/documents/digitalasset/dg_195031.pdf
"• I have a rebate only pension scheme,
what will happen to it in the future?
A ‘Rebate-only Pension’ is one where the
only contributions paid into it are the end-of-
year rebates of National Insurance
contributions paid by the Government direct
to the pension scheme. Following abolition,
these rebates will no longer be made in
respect of any earnings paid in tax years
from the 6 April 2012.
However, rebates paid
for tax years before 6 April 2012 will remain
in the scheme to provide benefits in place of
the additional State Pension for the time you
were contracted out.If you wish you can
transfer these rights to another pension
scheme if the new scheme is prepared to
accept them.

I assume that this is what SL mean?

polybear

Many thanks for the reply. I'm pretty sure that's what S.L. mean; I spoke to my Employer's Pension Dept. yesterday and they've confirmed the same yesterday - that a transfer of protected rights will be permissible from April onwards.

However, this will be dependent upon Barclays being happy to sign a form confirming "Equivalent Rights" or "Equivalent Benefits" (?) - I think I've got that right (I did make note of it but the paper is at work).

However, and assuming it is possible to transfer the money, is it a good or bad idea to do so please? Many thanks.

Brian

xylophone

I assume that there are no guarantees of any kind with the PR pot.
I should think that if the charges are lower with SL and their fund choice suits your risk/reward profile better (and in view of the small amount involved) then moving could be an efficient solution?

In your position I think I'd be inclined to move but I am not an expert!