Partial transfer from group pension possible?

Andrew_Cottrell

I currently have around 100k in a defined contributions pension, though my employer's group pension plan with Aviva.

I believe they are charging me about 0.7% per annum, which works out to around £700 per year.

As my pension plan is invested in index tracker funds, this seems quite high.

With a low cost SIPP, I could invest in an index tracker fund with 0.1% annual management chart, and I'd also need to pay £2 per month platform fees. That works out to around £124 per year.

Could I keep the pension plan open to ongoing contributions, but make a partial transfer of the bulk of the current value to a low cost SIPP?

I couldn't find any documentation about this on the Aviva website.

[Deleted User]

Andrew_Cottrell wrote: »

I currently have around 100k in a defined contributions pension, though my employer's group pension plan with Aviva.

I believe they are charging me about 0.7% per annum, which works out to around £700 per year.

As my pension plan is invested in index tracker funds, this seems quite high.

With a low cost SIPP, I could invest in an index tracker fund with 0.1% annual management chart, and I'd also need to pay £2 per month platform fees. That works out to around £124 per year.

Could I keep the pension plan open to ongoing contributions, but make a partial transfer of the bulk of the current value to a low cost SIPP?

I couldn't find any documentation about this on the Aviva website.

Hi Andrew

If you can email me at social@aviva.co.uk and include your full name, date of birth, post code and policy / reference number I can pass your query to our pensions team who will be able to answer your query for you.

Dave Hyam
Aviva UK Social Support

dunstonh

As my pension plan is invested in index tracker funds, this seems quite high.

Pension funds tend not to discriminate between trackers and basic managed funds. Partly due to supply and demand not being there and simplicity required on the contract on many group schemes.

With a low cost SIPP, I could invest in an index tracker fund with 0.1% annual management chart, and I'd also need to pay £2 per month platform fees. That works out to around £124 per year.

The provider in that case is going to have to change it's charging model very shortly though and no longer run non-commission funds on that basis. So, it may only be a short term fix.

Could I keep the pension plan open to ongoing contributions, but make a partial transfer of the bulk of the current value to a low cost SIPP?

Only if the employer allows it. For some schemes it would require the closure of the pension and starting a new one. An employer may not want that. So, its a question to put to the scheme administrator and the employer to see if they are willing to do it.

I couldn't find any documentation about this on the Aviva website.

You wont as it is not up to Aviva. It is up to the employer.

Andrew_Cottrell

Aviva_company_representative wrote: »

If you can email me at [EMAIL="social@aviva.co.uk"]social@aviva.co.uk[/EMAIL] and include your full name, date of birth, post code and policy / reference number I can pass your query to our pensions team who will be able to answer your query for you.

I have emailed the requested details. Thank you!

Andrew_Cottrell

I have now discussed this with Aviva. I found Aviva very friendly & helpful, and my original question was fully answered.

The following is for anyone who is interested in this topic:

With Aviva, my pension fund is made up of 10,000 segments, with each segment being one 10,000th of the total fund value.

I am able to make a partial transfer of any whole number of segments, so long as at least one remains with Aviva.

With one approach, for example, I could transfer 90% of the fund value now, leaving 1,000 segments. Then several years later, when the fund has increased in value, I could transfer another 90%, leaving 100 segments. Then 90% again, leaving 10 segments. Then one final 90%, leaving one segment. After that I could no longer make partial transfers.

Now I know this, I will need to think long & hard about when & how much I will transfer. I'll have to create a spreadsheet to model the many approaches. I'd be interested if anyone has any advice on which approach is most cost efficient.

Could there be any problem caused by having a high value fund with only a single segment?