Should I transfer my pension?

NOWSE

I recently started work in a local authority school and have joined the superannuation pension scheme. During my previous employment, of 5 years, I contributed to a private pension scheme with Norwich Union. I now have the opportunity to transfer my Norwich Union fund to the superannuation scheme.

Has anyone any advice, as to whether I should transfer or not, and would that advice differ if I didn't expect to be still working for a local authority when I retire? Just to say, this is not my only pension provision- Five years ago I took early retirement on health grounds and draw a pension from a previous employer's sheme.

dunstonh

Depends on the policy. Some NU plans have guaranteed annuity rates which are in excess of 10%. Indeed, came across one last week that was 10.4% with spouses pension and increasing annually. Damned good one.

A Local authority pension is very good and it may make sense to transfer your pension into it but it may not depending on guaranteed annuity rates and charges. Without knowing that information, it cannot be answered.

EdInvestor

If the NU pension is a recent one, guarantees are probably unlikely. Up til 2010 you can take benefits from the NU pension at age 50, after that at age 55.What are the rules with the LA pension? If there is a lack of flexibility this could be a deterrent to what would otherwise probably be a good idea.

What is your current situation regarding contracting in or out of the second state pension? Have you obtained a forecast for your Basic State Pension? If you are short of years for the latter, it is possible to buy more and this is a very cost effective way to boost pension income.

NOWSE

Just to clarify. No the NU policy has no guarantees. A few months ago, when I stopped paying into the fund, I received from NU a projected pension based on the standard projected growth rates. I received a state pension forecast last year that showed that I am not short on my state pension contributions. Of course at present the government are trying to alter the goalposts on public sector pension schemes such as the teachers' and the local government schemes.

Gray0103

If you are in the LA fund for under 2 years and lose your job or move there might be penalties attached

pete_wilson

Hi Martin,thankyou for this website at last i can talk to someone who has my interest at heart. My problem is i have a Hoover pension which i would like to start. I started with Hoover in 1987 and left in1996.When i reached 50 i applied for the pension ,to cut a long storie short they refused to answer my letters or emails then after a year or so they said i was not entitled to the pension even so in the pension details it says i can take the pension out when i am 50. I have tried talking to them and other organisations but with no joy(its run by the prudential).
My other problem is I have another private pension with the pru which i started in 97 we moved to france in 2002 the pru sad I could not carry on with this pension because I was not a UK tax payer anymore. When I enquired about what the position was regarding my pension we kept on being transferred to a call centre and told that the pension would be frozen do you know of any means of being able to release this pension.
Looking forward to hearing from you soon

Regards

Pete Wilson.

dunstonh

The occupational scheme will allow early retirement at the discretion of the trustees. Early retirement can hurt the fund financially and that hurts the members. Due to the stockmarket crash and increased regulatory requirements, pension funds do not have the surpluses in them that were present (on paper) 5 years ago. Early retirment may have been possible then but it is less likely now.

The private pension you have; Is it an AVC or a personal pension? If its an AVC, it will be linked to the occupational scheme for retirement benefits. If Hoover say yes you can have your pension, the AVC will as well. If its an FSAVC and you no longer work for Hoover, then you can transfer it to a personal pension and commence benefits. If its a personal pension, you can commence benefits as you say you are over 50.

You should be aware that commencing your pension early will mean you get significantly lower benefits than you would do at a later retirement age. You are also commencing them at a time when the stockmarket hasnt fully recovered after a crash. Depending on where you invested your pension, you could face penalties for taking early retirement. Before you commence the "private" pension, you should ask Pru for commencement figures and projections to age 60/65 so you can at least see what you are losing before you make that decision.