Company contributions into SIPP

RainMaker_2

Hi all,

My company pay a decent contribution into their company plan (DC). However, the plan performance has been abismal to say the least. I also run a SIPP, the returns from which have been quite impressive.

I've asked my Company if they'd direct their contributions to my SIPP, but because of admin cost (5000 employee's) it''s a non-starter. Fair enough.

I've also asked the pension plan administrator if i could transfer-out (say once a year) to my SIPP. They say no, end of.

Is there any way I can force the later ?

Any advice much appreciated.

mania112

You should ask if there are other funds available within the company scheme and see if you prefer the outlook of an alternative.

RainMaker_2

I have and there are, but I'm not interested in any of them. I can do much better with my SIPP.

My Q was can I force a direction of funds into my SIPP.

k12479

I assume you should be able to transfer the existing pension to a SIPP, opt out of the company pension, make your own contributions to the SIPP after tax, which will then be reclaimed by the SIPP provider on your behalf and any additional tax relief via self assessment.

RainMaker_2

Yes indeed k12479, but unfortunately I would then lose the company contribution (10%).

k12479

Good point. I believe lots of company plans may remove the company contribution if you move within two years or so anyway. 10% is pretty good. Sounds like you don't really have any other option.

zagfles

I'm in a similar position. The fund choices in my company pension are very limited, I'd much prefer the money to go into my SIPP.

Suppose one thing which might work is if you leave the scheme after a couple of years, transfer it all to your SIPP (which I think they'd have to allow), then rejoin - if they allow you to rejoin on the same terms and there isn't a time window before you can rejoin. Very messy though.

mania112

guys, you're missing the point:

You have been provided with a company pension. They are restrictive with their fund selection, but that's to keep it cheap.

The performance of the that pension, though, will always be better than anything you can do alone.

Let's say into the company plan you contribute 5% and your employer contributes 10%.

Each month (forgetting about tax relief for a second!) your investment returns £150 on every £50, before the performance of the fund itself.

The SIPP comes nowhere near.

jamesd

Is your company now obliged to offer auto-enrolment? If you were to stop being enroled could you transfer the pot (almost certainly yes)? Could you then enrol again? By law, the companies that are required to offer auto-enrolment are also required to allow people to stop and resume.

zagfles

mania112 wrote: »

guys, you're missing the point:

You have been provided with a company pension. They are restrictive with their fund selection, but that's to keep it cheap.

The performance of the that pension, though, will always be better than anything you can do alone.

Let's say into the company plan you contribute 5% and your employer contributes 10%.

Each month (forgetting about tax relief for a second!) your investment returns £150 on every £50, before the performance of the fund itself.

The SIPP comes nowhere near.

Yes we know that, the OP and I want to retain the company contribution (plus the NI saving on personal contributions if salary sacrifice) and it's a no-brainer to do so, but we'd rather be able to get those contributions into our SIPP if possible.

The performance of the funds in my SIPP has easily exceeded the performance of the funds in the company scheme, despite the charges being much lower in the company scheme.

zagfles

jamesd wrote: »

Is your company now obliged to offer auto-enrolment? If you were to stop being enroled could you transfer the pot (almost certainly yes)? Could you then enrol again? By law, the companies that are required to offer auto-enrolment are also required to allow people to stop and resume.

But they are probably only obliged to make the minimum contributions (4%?) rather than the 10% we're getting now.