New Morrisons Pension

Linton

The conclusion that we seemed to reach was that if you are allowed to transfer the whole pot when you leave the company after 2 years, including both your and your employers contribution then it was a good scheme which you should join. If you only get access to your contributions then it is a bad scheme.

So this is a detail you need to check.

hugheskevi

When you check what the rules on transferring out are, you need to be careful to note the exact words used.

You will get both employee and employer contributions as part of the transfer value offered, but the question is how much they are valued at.

Anything involving the words actuarial equivalent or cash-equivalent-transfer-value (CETV) are bad things to hear.

Alternatively, if you are told you can take the headline pot value as a transfer, that is good.

So if after 3 years you have a Morrison's pension pot of £5,000 you want assurance that you can transfer £5,000 to another pension scheme if you wish - not an actuarially adjusted value which is lower than £5,000. Personally I'd be wanting it in writing, not from a telephone contact centre operative.

BobQ

jamesd wrote: »

Being in for three years then paying an IFA to transfer out would probably use half or more of the pot size.

QUOTE]

Jamesd, out of general interest, if the OP's son were to leave Morrisons Pension Scheme within two years could he not get a refund of contributions, on the basis is was too small a pot to administer, and just invest the money into another scheme himself rather than transfer it? That is can he avoid the overheads of the IFA review?

ffacoffipawb

BobQ wrote: »

Jamesd, out of general interest, if the OP's son were to leave Morrisons Pension Scheme within two years could he not get a refund of contributions, on the basis is was too small a pot to administer, and just invest the money into another scheme himself rather than transfer it? That is can he avoid the overheads of the IFA review?

I'll butt in and say that if he does that he will lose the employer contributions - so not a good idea really.

JoeCrystal

And the income tax and NI (not sure on NI) get charged on it as well? After all, it is not going into pension after all but paid to employee.

Cheers

Joe

webbhost

Hi people, can I read the first page of this thread and think I have figured out what you're trying to say... I went ahead and did some calculation and would like someone to clarify that I am correct with these so far?

I did a comparison of morrisons pension with 2.5% interest per year vs a 6 or 7% interest per year on my lone contribution.. in total I figure that a 6% personal investment would be bad, but a 7% interest one would be in my favour? (atleast for now whilst I am young, I'm 25 so I have 40 years left to work).

Anyway heres the link with my calcs.. can someone confrim this please?

http://www.webb-hosting.net/retirement.php

Also how the hell would I invest my money with a 6-7% yearly return on it.. surely ISA's dont go that high?

- consider that this is based on 1 years investment only, looking 40 years future, and therefore does not consider any future earnings that would be invested also... that will be my next calculation! - but it could still mean its worth my holding back for a year.. that said, probably not worth me worrying about as overall seems like it'll make a very small difference?

***Just made a correction to this... I have just realised stakeholder pensions contribute tax relief (£20 for every £80 I pay), therefore my £80 (100% paid myself) becomes £100 which is 125% starting point..

Linton

webbhost wrote: »

Hi people, can I read the first page of this thread and think I have figured out what you're trying to say... I went ahead and did some calculation and would like someone to clarify that I am correct with these so far?

I did a comparison of morrisons pension with 2.5% interest per year vs a 6 or 7% interest per year on my lone contribution.. in total I figure that a 6% personal investment would be bad, but a 7% interest one would be in my favour? (atleast for now whilst I am young, I'm 25 so I have 40 years left to work).

Anyway heres the link with my calcs.. can someone confrim this please?

http://www.webb-hosting.net/retirement.php

Also how the hell would I invest my money with a 6-7% yearly return on it.. surely ISA's dont go that high?

- consider that this is based on 1 years investment only, looking 40 years future, and therefore does not consider any future earnings that would be invested also... that will be my next calculation! - but it could still mean its worth my holding back for a year.. that said, probably not worth me worrying about as overall seems like it'll make a very small difference?

Investment in fairly risky mainly overseas share funds. Over 40 years the long term gains should greatly outweigh the short term variability,

webbhost

Linton wrote: »

Investment in fairly risky mainly overseas share funds. Over 40 years the long term gains should greatly outweigh the short term variability,

Could you elaborate on what you mean by the risks, and are you agreeing with the last bit that a stakeholder pension would outweigh and be better than the morrisons pension?

My other question is if I took a stakeholder pension, can I then stop contributing into that and just get the interest on my contributions, and take up the morrison's pension (sorta switch) after 20 years, at which point the morrisons pension should be more profitable as it is shorter term?

webbhost

My brain has just had a mental breakdown, as further calculations figure I am contradicting myself and I cant figure out why.. can someone click link which I just updated and see if they can spot my mistake?

Its now turned out that morrisons pension pot would finish on £138,000, but a private one would only work out at £79,000?? (2nd half of page)..

Yet on my original calcs, based on 5% interest on stakeholder, morrisons finished at 1074% of my money as a pension total, and stakeholder finished at 1350% which was better?

Cant figure whats suddenly changed, but I've clearly made a mistake somewhere!.

If peeps wanna see the coding then I'll post if it helps figure my mistake!

webbhost

Correction ** sorry for excessive posts!!

Figured that this has happened because my original calculation was based on a single year, in which case was true... but in the long term if I have to choose one OR the other, morrisons is better?

The vital question is can I take a stakeholders pension for 20 years, then freeze it whilst still getting interest so that I can then opt-in to the morrisons one further down the line?