Unable to Transfer Pension

GhIFA

It's an occupational Defined Contribution arrangement - She has less than two years service so her options are to transfer the benefits to another arrangement or take a refund of her contributions (with the employer retaining any contributions they have made).

She has been making her contributions via salary sacrifice, so they are treated as employer contributions. This is why there would be nothing to come back to her should she not transfer, so a transfer would be the best option.

She should be able to open a stakeholder/personal pension with just the transfer.

tesuhoha

GhIFA wrote: »

It's an occupational Defined Contribution arrangement - She has less than two years service so her options are to transfer the benefits to another arrangement or take a refund of her contributions (with the employer retaining any contributions they have made).

She has been making her contributions via salary sacrifice, so they are treated as employer contributions. This is why there would be nothing to come back to her should she not transfer, so a transfer would be the best option.

She should be able to open a stakeholder/personal pension with just the transfer.

Thanks. Would she have to continue making contributions on the new pension? I'm asking this because she has just left home to be close to her new job in the city and cannot afford to pay in at present due to the cost of moving etc.

jamesd

If she's stuck for a place to transfer to, Hargreaves Lansdown will take transfers where the total value of all pension pots being transferred is at least £1,000. No requirement for ongoing contributions.

Whether the new pension requires ongoing contributions depends on the specific pension terms. Most DIY personal pensions won't have that requirement.

GhIFA

tesuhoha wrote: »

Thanks. Would she have to continue making contributions on the new pension? I'm asking this because she has just left home to be close to her new job in the city and cannot afford to pay in at present due to the cost of moving etc.

Unlikely to be the case.

mania112

GhIFA wrote: »

It's an occupational Defined Contribution arrangement - She has less than two years service so her options are to transfer the benefits to another arrangement or take a refund of her contributions (with the employer retaining any contributions they have made).

That's the rules for Defined Benefit not Defined contributions, isn't it?

This is where the confusion lies (for me) - DC's don't allow refund of contributions and in any case they're employer contributions.

GhIFA

mania112 wrote: »

That's the rules for Defined Benefit not Defined contributions, isn't it?

This is where the confusion lies (for me) - DC's don't allow refund of contributions and in any case they're employer contributions.

No, it's the rules for occupational schemes - DB or DC - I've dealt with the transfer of a fair number of DC arrangements where this has been the case.

The refunds are allowed under Occupational rules. Just because a scheme is DC it doesn't mean that it is a Personal Pension (where refunds are not allowed).

It is only the employer contributions that are refunded, but in the OP's case the contributions are being paid by salary sacrifice, so they are deemed to be employer contributions.

kidmugsy

Don't Stakeholders take transfers? Is it still possible to open a Stakeholder for twenty quid?

tesuhoha

This matter has been put on hold but now it is becoming urgent. She is thinking of opening a stakeholder pension but it means a fee and that seems unfair so I have drafted the following email to send to the company.

Please feel free to suggest edits/improvements to this

I refer to your letter dated 28th March, your reference .........

It seems from your letter that my only option is to transfer the value of my pension (£2,209.51) to another pension arrangement. However, the difficulty I am facing is that the letter states that the transfer should be completed within three months from the date of the letter. As I am not eligible to join the pension scheme with my new company for a year I am unable to make this transfer. The letter goes on to say that if I do not arrange for a transfer of my fund, I will not be able to claim payment from the Plan at a later date.

I do not wish to lose these funds but transferring to a private pension will cost me fees of £75. Is there any way you can retain this pension until I am eligible to join the new company scheme or can you suggest any other viable solution.

tesuhoha

Also, I have followed the links to Cavendish for the stakeholder pension but is there a cheaper way to do this. Can we open one directly with the pension company or is this not advisable?

dunstonh

She is thinking of opening a stakeholder pension but it means a fee and that seems unfair

Why would it mean a fee?

Also, I have followed the links to Cavendish for the stakeholder pension but is there a cheaper way to do this.

No

Can we open one directly with the pension company or is this not advisable?

That would be more expensive.