Employer contributions into SIPP - possible?

webnibbler

I have a meeting booked this week with my employer’s pension consultant. I’m intending to start the process of joining the company pension scheme as soon as possible. But I’m really interested to know if the company would be willing to pay the contributions into my existing HL SIPP rather than opening a new Group PP plan. This way I can direct contributions into low cost trackers rather than the limited and expensive insured funds on offer in the GPP. TBH I think I know what the consultant’s answer will be …

Has anyone managed to do this or know if it's possible? Or will I just have to accept joining the GPP for the benefit of my employer’s contributions?

Lokolo

My company does it. It's more of an agreement between HL and my company though.

webnibbler

Thanks. It sounds like it may have to be through special arrangement. I suspect the consultant is from one of the large insurance companies and will be more interested in opening a new plan than organising contributions into a SIPP. I wanted to be ready to question his reluctance though .

dunstonh

This way I can direct contributions into low cost trackers rather than the limited and expensive insured funds on offer in the GPP.

You may well find that GPPP is cheaper. HL's charges are going up soon (as they are not compliant with RDR and platform review) and remember that pension funds are priced using the TER as the AMC.

What you want is possible subject to employer willing to do it. Most medium and small companies (or anyone with more than a handful of employees) wont do it as it would be a logistical nightmare).

I suspect the consultant is from one of the large insurance companies and will be more interested in opening a new plan than organising contributions into a SIPP. I wanted to be ready to question his reluctance though .

Most likely it will be an IFA. I doubt they will be interested in opening a new plan. Using the GPPP will almost certainly be their remit if they are representing the employer.

NeverEnough

Thye company I worked for did this with no issue at all - they simply got my HL account number from me and wrote to HL setting up a monthly direct debit for employer contributions to my HL SIPP. They also offered a separate company pension scheme which I declined, asking for the contribution to my SIPP instead. Never met with their pension advisor - just declined the offer to meet with him!! There should be NO issue at all with your choosing to have the contributions paid into your HL SIPP, unless the employer just couldn't be bothered. I was part of the senior management team in a relatively small company, so perhaps in a better position for such a request to be granted.

Debt_Free_Chick

NeverEnough wrote: »

Thye company I worked for did this with no issue at all - they simply got my HL account number from me and wrote to HL setting up a monthly direct debit for employer contributions to my HL SIPP. They also offered a separate company pension scheme which I declined, asking for the contribution to my SIPP instead. Never met with their pension advisor - just declined the offer to meet with him!! There should be NO issue at all with your choosing to have the contributions paid into your HL SIPP, unless the employer just couldn't be bothered. I was part of the senior management team in a relatively small company, so perhaps in a better position for such a request to be granted.

It's a fair point, but I can't see Tesco doing it for their 200,000+ employees

Debt_Free_Chick

webnibbler wrote: »

Has anyone managed to do this or know if it's possible? Or will I just have to accept joining the GPP for the benefit of my employer’s contributions?

You could clear out the GPP once a year and transfer the lot to your SIPP. Check that the employer will keep paying in to the GPP though. Some treat you as having "opted-out" and then cancel your membership.

NeverEnough

Debt_Free_Chick wrote: »

It's a fair point, but I can't see Tesco doing it for their 200,000+ employees

I did point that out quite clearly. I also pointed out I was part of the senior management team in a relatively small company so perhaps it was easier to arrange, but it is potentially perfectly feasible for any employer to do this for someone, whether they will agree or not is a different matter. It is however, unlikely that all Tescos 200000 + employees will all want to use personal SIPPs rather than the company pension plan - but the OP didn't mention Tesco as being their employer?

webnibbler

Thanks for the responses. It seems like it's possible even if it takes some setting up. I work for a relatively large business so they may consider it, although I'm no senior gaffer, just on the shop floor.

@Debt_Free_Chick Good suggestion, I think it's possible to do a partial transfer from GPP to another plan, but it incurs hefty charges as I remember.

@dunstonh Yes, good point about TER and AMC on GPPP, that does make a difference. I heard SL are now offering Vanguard trackers now as well.

Debt_Free_Chick

NeverEnough wrote: »

I did point that out quite clearly. I also pointed out I was part of the senior management team in a relatively small company so perhaps it was easier to arrange, but it is potentially perfectly feasible for any employer to do this for someone, whether they will agree or not is a different matter. It is however, unlikely that all Tescos 200000 + employees will all want to use personal SIPPs rather than the company pension plan - but the OP didn't mention Tesco as being their employer?

I'm sorry if I wasn't clear, but it's a nightmare to administrate if more than a handful have their own pension plans, different to the company's own scheme. For each pension provider, processes and controls have to be put in place to ensure contributions are calculated correctly and paid on time. In a small company with a wages clerk, it can work - but not in a larger organisation. Also, in larger companies, simply getting the whole thing approved can be quite a laborious process.

I agree an exception for a senior manager in a small company is probably manageable, but not for the "rank & file" in any reasonably sized company.

Regards

Debt_Free_Chick

webnibbler wrote: »

@Debt_Free_Chick Good suggestion, I think it's possible to do a partial transfer from GPP to another plan, but it incurs hefty charges as I remember.

That would be unusual these days, but something to ask the IFA to the company pension scheme.