Problems with Aegon pension transfer

okydoky

I'm setting up my SIPP on a DIY basis but find that Aegon will not transfer out policy proceeds without me involving an IFA which I am loathe to do as it will cost me a fee?
Also, they are quoting a higher transfer value due to funds including about 50% in With Profits fund of about 10% more than current value with less than 3 years to NRD, which I am tempted by but they state that a further bonus MAY be paid at NRD but not guaranteed. They say fund will grow by about 5.5%pa so I would rather do the transfer now but am wary of what I may be missing out on in the shape of a final bonus? There are no guaranteed annuity rates.

Anyone any experience of this??

dunstonh

I'm setting up my SIPP on a DIY basis but find that Aegon will not transfer out policy proceeds without me involving an IFA which I am loathe to do as it will cost me a fee?

I dont see a question there despite the question mark. However, a request for an IFA to sign off on it does tend to occur on occupational pension transfers. This can include plans with GMP (such as section 32 buy out bonds).

Also, they are quoting a higher transfer value due to funds including about 50% in With Profits fund of about 10% more than current value with less than 3 years to NRD, which I am tempted by but they state that a further bonus MAY be paid at NRD but not guaranteed.

You tend to ignore the fund value when the transfer value is higher as the fund value wont include terminal bonus accrued to date.

They say fund will grow by about 5.5%pa so I would rather do the transfer now but am wary of what I may be missing out on in the shape of a final bonus?

You are misreading the projection. No example projection states you will get 5.5%. It shows what you could get IF it grew by 5.5% (before charge).

Anyone any experience of this??

yes. as mentioned.

okydoky

Re your comment about the projection rate -

This is not a projection as such. It is the rate at which the With Profits Endowment fund will average up to pension date - the units are guaranteed to have a value of £1.00 at the pension date.

So if I take the transfer value now, I get slightly less than I would get if I wait for my pension date, but I could arguably make more in my SIPP, and in any event wish the additional funds to be included so that I get more TFC and higher drawdown payments.

Still don't see why I need to have an IFA involved, it is a straightforward pension plan, funded with avc's, taken out 20 odd years ago.

dunstonh

This is not a projection as such. It is the rate at which the With Profits Endowment fund will average up to pension date - the units are guaranteed to have a value of £1.00 at the pension date.

It is not "will". It is "if". The rate of return is unknown. It is a hypothetical gross rate (note pension fund performance is published net of charges. Fund projections are gross of charges). Purely for example only. Nothing guaranteed.

The unit price cannot go down. They can stay the same or go up but the rate they will move is dependent on the underlying performance and smoothing rules.

Still don't see why I need to have an IFA involved, it is a straightforward pension plan, funded with avc's, taken out 20 odd years ago.

AVCs are classed as occupational pensions. Most occupational pension transfers need to be signed off on by an IFA due to the high risk chance that it is the wrong thing to do. AVCs have rules that are specific to them and not other types of pensions.

Daniel_Elkington

moving an AVC could be the worse mistake you ever make.

most proper IFA's would shift this across foe you for around 800-1200 dependent upon how easy it is.

mania112

The reason for this is that AEGON know this could well be a mistake and require an IFA to recommend the transfer and so therefore take the liability too.

okydoky

Daniel_Elkington wrote: »

moving an AVC could be the worse mistake you ever make.

most proper IFA's would shift this across foe you for around 800-1200 dependent upon how easy it is.

What makes you say this?

It is actually a combination of a transfer out of a work pension up to 1980, compensation for mis-selling, avc's for about 10 years, and finally contracted out out SERPS for 12 years. Total transfer value £100K.

I am not desperate to move this into my SIPP but without it my TFC will be much lower and will not be able to take my drawdown up to the personal allowance. Which means if I defer, I will end up paying more tax at a future date.

So why should I be so careful about transferring this? Performance of the policy has been mediocre and with about 50% of it in the WP Fund, i do not hold out much hope of a dramatic upturn. In contrast my SIPP is performing very well with a good spread of Investment Companies and geographical spread also.

okydoky

dunstonh wrote: »

It is not "will". It is "if". The rate of return is unknown. It is a hypothetical gross rate (note pension fund performance is published net of charges. Fund projections are gross of charges). Purely for example only. Nothing guaranteed.

The unit price cannot go down. They can stay the same or go up but the rate they will move is dependent on the underlying performance and smoothing rules.


AVCs are classed as occupational pensions. Most occupational pension transfers need to be signed off on by an IFA due to the high risk chance that it is the wrong thing to do. AVCs have rules that are specific to them and not other types of pensions.

The word "will" is lifted straight from the transfer quote letter I received from Aegon. So is the word "guarantee".

dunstonh

It is actually a combination of a transfer out of a work pension up to 1980, compensation for mis-selling, avc's for about 10 years, and finally contracted out out SERPS for 12 years. Total transfer value £100K.

Are you sure its an AVC and not a section 32 buy out bond?

okydoky

dunstonh wrote: »

Are you sure its an AVC and not a section 32 buy out bond?

It is a "personal pension plan"

That's what it says on the Aegon statement - contract type, "Personal Pension Plan"

okydoky

okydoky wrote: »

It is a "personal pension plan"

That's what it says on the Aegon statement - contract type, "Personal Pension Plan"

Bit more info........

2 policies incepted in 1980, one a Personal Pension where I transferred in a previous pension and later got some compensation and added in contracted out contributions. The other was a FSAVC which run for about 10 years, then I stopped contributing and Scottish Equitable agreed to transferring this one to the PPP to avoid paying unnecessary policy charges.

Hope this clarifies.