Advisor moving everyones company pensions..

krakpot

Everyone at our company has had a very vague letter satting that on the 1st Jan 2013 he will be moving everyones pension from Standard Life to Scottish Widows.

His reasons are that Standard life is no longer a major player in the pension world and we should change to a more modern and less expensive scheme wiith Scottish widows. He says Scottish widows can be accessed online and has a novel "What If" Calculator?? (I can access standard life online iirc)

He also states thta Standard life has an annual charge of 1.3% per annum compared to Scottish widows 1% but as we were early adopters we are only paying 0.996% to Standard life but the difference is negligable.

We are all a bit worried as some staff have had bad experences with previous employers pension beig moved around.

We have requiested this advisor comes in before the change date and give us a better explaination for the move, but we arent expert so we are not sure what questions to ask.

What do you guys think? Do you think he is doing it for our best interest or for his?

Thanks

dunstonh

His reasons are that Standard life is no longer a major player in the pension world and we should change to a more modern and less expensive scheme wiith Scottish widows. He says Scottish widows can be accessed online and has a novel "What If" Calculator?? (I can access standard life online iirc)

Standard Life are probably bigger in pensions that Scot Wid. Certainly are in the occupational pension scheme world. Scot Wid give the impression of being in decline. We dont know if Lloyds are going to get shot of them or not but there is a distinct lack of development going on with SW products when compared to others.

He also states thta Standard life has an annual charge of 1.3% per annum compared to Scottish widows 1% but as we were early adopters we are only paying 0.996% to Standard life but the difference is negligable.

This is the key thing on group schemes. Cost.

We are all a bit worried as some staff have had bad experences with previous employers pension beig moved around.

Moving money purchase pensions is nothing to worry about really. Not much can go wrong here. The only real differences are investment options and charges.

What do you guys think? Do you think he is doing it for our best interest or for his?

The employer decides the group scheme administration and provider. The adviser has to put a case over to the employer. Having staff on board makes sense.

The justification that Std Life are no longer a major player is rubbish and moving it to one in decline doesnt make sense. However, SW are still viable.

There will be a reason for doing it but seeing as the benefit to the employees is negligible for early sign ups and worse for new employees then its not likely to be a staff benefit. It may be an employer benefit from administration point of view. It may be an investment choice benefit as the new scheme has a higher charge than stakeholder which suggests external funds should be available. Some employees who take an interest in investing will prefer that.

The reason is probably linked to the retail distribution review.

robmatic

krakpot wrote: »

Everyone at our company has had a very vague letter satting that on the 1st Jan 2013 he will be moving everyones pension from Standard Life to Scottish Widows.

His reasons are that Standard life is no longer a major player in the pension world and we should change to a more modern and less expensive scheme wiith Scottish widows. He says Scottish widows can be accessed online and has a novel "What If" Calculator?? (I can access standard life online iirc)

He also states thta Standard life has an annual charge of 1.3% per annum compared to Scottish widows 1% but as we were early adopters we are only paying 0.996% to Standard life but the difference is negligable.

We are all a bit worried as some staff have had bad experences with previous employers pension beig moved around.

We have requiested this advisor comes in before the change date and give us a better explaination for the move, but we arent expert so we are not sure what questions to ask.

What do you guys think? Do you think he is doing it for our best interest or for his?

Thanks

Obviously he has to make a case for it and the charges would be a strong reason to move if the new provider is cheaper.

He also might coincidentally be receiving a commission payment from Scottish Widows.

krakpot

Thankyou for the detailed response dunstonh.

Can you clarify this last part as most of it I dont understand :embarasse

BTW, we have just spoken to the company boss and he says it makes no difference to him whether we stay or move,

dunstonh wrote: »

It may be an employer benefit from administration point of view. It may be an investment choice benefit as the new scheme has a higher charge than stakeholder which suggests external funds should be available. Some employees who take an interest in investing will prefer that.

The reason is probably linked to the retail distribution review.

dunstonh

stakeholder pensions have a basic investment choice but the charge is capped at 1%. Personal pensions can offer larger investment ranges (stakeholder can be anything from 1-40 funds. Personal pensions can be upto 1500). So, choice may be better on this new scheme.

gadgetmind

krakpot wrote: »

His reasons are that Standard life is no longer a major player in the pension world and we should change to a more modern and less expensive scheme wiith Scottish widows. He says Scottish widows can be accessed online and has a novel "What If" Calculator?? (I can access standard life online iirc)

We moved from Scottish Widows to Friends Life because the latter has a better platform and we're only paying 0.5% pa for a wide range of good internal funds.

"What if" calculators are ten a penny and all suffer from garbage in = garbage out.

bilbo51

gadgetmind wrote: »

We moved from Scottish Widows to Friends Life because the latter has a better platform and we're only paying 0.5% pa for a wide range of good internal funds.

That's a laugh.

Our company pension is in the process of moving from Friends Life to Aegon, going from 1% pa to 0.53% pa...

The real reason for this indecent haste to move pensions about is, I suspect, RDR.

dunstonh

Friends Life are very popular with smaller and med sized schemes.

There has been some providers offering discounts to get schemes moved over to them. So, you may find one person with a provider on a higher rate than another. Size of scheme is the key thing. Like anything, the bigger the amount, the better the terms.

mania112

Sounds like the adviser is transferring the scheme to make a few quid.

Not all bad though, it will end up being cheaper for you.

Better Service and RDR are just ways of avoiding the fact he'll be getting a nice slice of the action on transfer.... but he's got to make a living!

It will affect the members in no way really, you'll still contact the IFA for assistance so the provider is largely irrelevant to you, for this type of scheme.

dunstonh

Better Service and RDR are just ways of avoiding the fact he'll be getting a nice slice of the action on transfer.... but he's got to make a living!

Most likely it will be fund based only (no mention of any initial charges). As that could be applied to the existing scheme as much as the new one, I am not sure the adviser will be better off unless he is increasing the fund based (or lowering it).