Civil service "Partnership" pension question

alexanderalexander

Hello,

I recently joined the civil service, and I have decided to go for the Partnership pension as opposed to Nuvos. I realise that this is not the received wisdom, but I went through the details on this forum a few weeks ago and I think it might work better for me: https://forums.moneysavingexpert.com/discussion/comment/56239245#Comment_56239245

I was wondering, however, about whether a certain strategy would work. There are three Partnership pension providers available (Standard Life, Scottish Widows, and Prudential), and I can choose whichever I like. Unfortunately, all of them only offer comparatively moribund funds, so ideally I would like get my pension savings into a SIPP so I can invest it in some top investment trusts and ultra-low-cost trackers.

So, would this work: I have the opportunity to change Partnership providers whenever I like (given a few months' notice). Could I start off with, say, Standard Life, pay into that for two years, and then ask to switch to Scottish Widows, and then transfer the money I had with the Standard Life scheme into my SIPP? Then I could carry on switching providers approximately every couple of years in order to transfer my accumulated balances into my SIPP.

Any thoughts on whether this would work? Would Standard Life let me transfer out even though I was still working in the civil service, albeit with a different pension provider? Or would I come across exit fees etc? Has anyone else thought of doing this?

KKmatters

You can change pension providers as long as you give your employer's 3 months notification to allow time to make the change these changes can only take place in April and/or October.

One thing you should bear in mind is that in order to remove your funds from your chosen provider you would need to 'opt-out' of the partnership scheme and you will be provided with a TV (transfer value) to transfer into your personal pension plan - you will then only be allowed one more chance to opt back into the pension scheme whether it is Nuvos or back into Partnership.... one bonus to being in the Partnership scheme is your employer is contributing even if you choose to make 0% contributions.

It maybe worthwhile reading the guidance available on the myCSP website or give DWP a call to discuss the impact/implications....

http://resources.civilservice.gov.uk/wp-content/uploads/2012/03/PPA-1_AMM2.pdf

alexanderalexander

KKmatters wrote: »

You can change pension providers as long as you give your employer's 3 months notification to allow time to make the change these changes can only take place in April and/or October.

One thing you should bear in mind is that in order to remove your funds from your chosen provider you would need to 'opt-out' of the partnership scheme and you will be provided with a TV (transfer value) to transfer into your personal pension plan - you will then only be allowed one more chance to opt back into the pension scheme whether it is Nuvos or back into Partnership.... one bonus to being in the Partnership scheme is your employer is contributing even if you choose to make 0% contributions.

It maybe worthwhile reading the guidance available on the myCSP website or give DWP a call to discuss the impact/implications....

http://resources.civilservice.gov.uk/wp-content/uploads/2012/03/PPA-1_AMM2.pdf

Hello, thank you for your reply. Can I just clarify, are you saying that you are certain that the proposed plan (of switching Partnership providers, and then moving the money left in the old provider into a SIPP) would not work? Is that because when you switch providers the money goes to your new provider?

KKmatters

Hi there... based on information I have available in order to move the money out of the provider you would have to 'leave' the scheme obtain a Transfer Value (TV) which would then be transferred into your SIPP.

However, if you then decided to re-join Partnership Scheme you would have the same available options available to you and you could move around providers but to move the funds would mean the same process... leave the scheme obtain a TV and transfer into your SIPP.

Basically to keep transferring your Partnership pension into your SIPP would mean you have to leave the scheme as you cannot retain membership in the scheme and transfer money out... you will then be able to rejoin at a later date but bearing in mind the rejoining restrictions ie. April and October you could potentially be loosing out on 6 months contributions made by your employer as you move your money around.

alexanderalexander

KKmatters wrote: »

Hi there... based on information I have available in order to move the money out of the provider you would have to 'leave' the scheme obtain a Transfer Value (TV) which would then be transferred into your SIPP.

However, if you then decided to re-join Partnership Scheme you would have the same available options available to you and you could move around providers but to move the funds would mean the same process... leave the scheme obtain a TV and transfer into your SIPP.

Basically to keep transferring your Partnership pension into your SIPP would mean you have to leave the scheme as you cannot retain membership in the scheme and transfer money out... you will then be able to rejoin at a later date but bearing in mind the rejoining restrictions ie. April and October you could potentially be loosing out on 6 months contributions made by your employer as you move your money around.

Hello.... thank you for another reply! I am still not sure that I quite understand how this works, however, so will you forgive me if I run through a quick example?

Say I start paying into a Standard Life scheme, and after two years the amount in my pension is £6000. I then ask to switch to Scottish Widows. As I understand it, a new pension will be opened for me with Scottish Widows, and all my contributions thenceforth will go into that account. However, I thought the previous £6000 would just sit with Standard Life in my old pension, and that would just be a dormant pension which I could transfer across to a SIPP (while my Scottish Widows pension would go on being happily built up, with no one worried about what was happening to my Standard Life pension account).

Am I wrong, however? Would my £6000 in Standard Life get automatically transferred across to Scottish Widows instead?

Thank you again for your advice on this.

alexanderalexander

Any thoughts, anyone?