Transferring from old employers stakeholder pension into new employers pension

Bernard

Hi,

My old employer was Santander. I had a stakeholder pension which currently has a transfer value of £58000.

If I do nothing with this after a year it will be transferred into a separate policy (I have no details on what this would be though).

My new employer is Network Rail where I'm in the CARE scheme, which is initially a 5 years career average pension scheme which turns into a Final Salary pension scheme after 5 years if I opt to join the Final Salary scheme (which I plan to do).

The CARE scheme allows for transfers in. All transfers in will be treated as defined contribution(money purchase) benefits, which means the transfer value would be invested like AVCs.

So my question is, should I move the Santander pension into the Network Rail pension? Or should I set up a new pension elsewhere and transfer into that, or wait to see what Santander do when 12 months pass and see what pension they move the money into?

Your thoughts/opinions/advice are gratefully received.

Bernard

xylophone

If you transferred into the AVC arrangement, would you be permitted to transfer this into the Final Salary Scheme?

Bernard

I do not know about the final salary scheme. What it states though about AVCs in the CARE scheme is:

When you take your Pension, AVC benefits are paid in addition to your benefits from the CARE scheme. Your AVCs will be used to provide you with:

1) A lump sum payment on retirement OR
2) A Pension. If you choose this option, this will usually be done by you purchasing an annuity with your AVCs from an Insurance Company; this is known as the Open Market Option.

xylophone

My old employer was Santander. I had a stakeholder pension

A Group Plan like this? http://www.santanderjobs.co.uk/SummaryforNewHires.pdf
or something different?

Bernard

Yes that's the exact plan with Santander.

kidmugsy

Bernard wrote: »

... What it states though about AVCs in the CARE scheme is:

When you take your Pension, AVC benefits are paid in addition to your benefits from the CARE scheme. Your AVCs will be used to provide you with:

1) A lump sum payment on retirement OR
...

It sounds as if they are running it so that at retirement you can devote the AVC to lump sum and thereby have more money in the CARE scheme devoted to the pension. Many people would find that attractive. It would be wise, though, to find whether the same feature is available on the final salary scheme.

Bernard

Ok, I shall ask at work next week, unless I can find that out with the documentation I have.

xylophone

The Railway pension Scheme is very secretive(!) but you might find the answers to your questions here as you are a member https://www.railwayspensions.co.uk/Resources/Client/PML.RailwayPensions/Templates/PortalHome.aspx?DocID=2726&

As far as I can see, you will have to leave the group personal pension scheme with Santander - if you transferred to another PPS or even into a SIPP you would still be dependent or market returns just as you would be in AVCs.

However, if transferring to the AVCs would enable you to take a lump sum and maximum final salary benefits then this could be an attractive option.

Incidentally, you might find this thread of interest https://forums.moneysavingexpert.com/discussion/comment/56605291#Comment_56605291