Transfer Pension with GAR?

pitza

I have an old CIS personal pension which I was thinking of transferring to a new modern plan until I found out that it has a GAR of 8%, I pressume that I would lose this if I transferred so is it worth keeping just for the GAR even though the CIS scheme is not great, if it is would it be a good idea to stop paying into it and start a new scheme with lower charges and better funds with the contributions ?

Tammer

Hi,

If by GAR you mean Guaranteed Annuity Rate then you have a potentially very valuable benefit and it is unlikely that you would benefit by giving it up.

Questions you may want to consider are:

Does the GAR apply to all the money in your plan or only money paid before a certain date?

How long do you have to go to retirement? 8% is a great rate just now but may not be in 30 years for example.

What type of pension does the GAR apply to? e.g. is it a single life only, level pension with no widows pension or something else?

What are the charges on your current plan and what investment funds are available?

Do you have a financial adviser you could speak to?

pitza

If by GAR you mean Guaranteed Annuity Rate then you have a potentially very valuable benefit and it is unlikely that you would benefit by giving it up.

Questions you may want to consider are:

Does the GAR apply to all the money in your plan or only money paid before a certain date?
Not sure, I will find out.

How long do you have to go to retirement? 8% is a great rate just now but may not be in 30 years for example.
14 years.

What type of pension does the GAR apply to? e.g. is it a single life only, level pension with no widows pension or something else?
Not sure. will find out.

What are the charges on your current plan and what investment funds are available?
They say charges are less than 1%.

Do you have a financial adviser you could speak to?[/QUOTE]

dunstonh

GARs are normally very valuable. However, CIS have some versions where the GAR is lower than current open market rates. They also tend to wipe out bonuses on these plans irrespective of the level of GAR. So, you need to know the GAR level, costs involved on transfer and what alternatives you would use for investing to make an informed decision on what is best.