Any Advice. Work are proposing to swap pension

diane65_2

HI EVERYONE,

can anybody offer any advice:

I am in a Group personal pension scheme at work and they are proposing to transfer from scotish equitable to norwich union. They say there will be no penalties to policy holders and have provided detail on how Norwich
Union can out perform Scot Equitable. Understandably, and being NEW MONEYSAVER, I would like to make sure I do not sign for anything that will adversly affect my pension plan.

The irony of this is that I used to have a private pension with NU and transfered (upon advice) it into my Group personal pension scheme a few years ago................I am certain there will have been panalties to my fund for this and now they want t transfer back??

Any dvice greatly received

Diane

dunstonh

Both Norwich Union and Scottish Equitable are decent pension providers. At Group level, depending on the number of members, the terms may have been negotiated and NU may now offer lower charges than Scot Eq. On the other hand, a large group scheme transfer is very lucrative and the commission may be part refunded into the new scheme (or has been known to be shared between the advisor and the company owners or directors).

No advice can really be offered but you dont have a lot of choice if there is free money involved (ie, the employer makes a contribution).

diane65_2

Hi There,

thanks for your reply. Yes the advisor has stated the following as reasons for change:

1. NU have 25% of market of group pensions comapred to 2% for Scot Equ
2. No transfer costst and 20% reduction in management charges
3. a 10 year pre forecast showing NU beating Scot eq
4. Nearere local office i.e. improved admin
5.Used indi actuarial reports NU are financially stronger than SE

So on the face of it it would seem like a really good move but I wanted to ask before I committed myself.

Thanks for your advice
Diane

dunstonh

There is no harm to you but you do have to laugh at some of those reasons.

1 - Market share is irrelevant.
2 - very good reason.
3 - linked with number 2
4 - Norwich Union admin is one of the slowest out there and I am right on their doorstep. I received 2 policy docs from them to day for plans that in force 25th and 27th August. nearly 3 weeks!
5 - If its unit linked funds then it makes no difference. If its with profits then fair enough but hopefully they arent putting you in the NU with profits fund. Do you get a choice of funds?

Doads

I agree. Neither Scot Eq or NU are exactly known for their admin.

In addition, NU hit the headlines again today for moving yet more of their workforce to Asia. Nothing wrong with that in principle, but my experience is that customer service suffers when a company undetakes this exercise.