New job won't acept old pension fund transfer

sjb92

Hello all

I think I have worked out the answer to this but wanted to run it past some more experienced minds.

Last year I moved jobs, to a public sector job with the civil service pension. I have been trying to transfer my pot of money from my previous scheme to the new one, in order to buy a couple of extra years' service for when they work out the proportion of my final salary that I get.

My new scheme administrators (the MOD People Pensions and Pay Agency) have been very helpful - great customer service, very prompt etc. The old administrators, Axa, have not been as good. After taking an age to reply to my requests, and then sending information to my old employer, I have now got to a situation where the money will not be accepted by the civil service pension because Axa's scheme does not run in accordance to their rules on equal benefits for men and women. (!)

So: I have a load of money sitting with Axa. As I see it, I could
- take my contributions back, have a massive tax hit and also lose my employer's contributions. No thanks!
- leave it there, (and have Axa make a load of fees from it?)
- or I could move it into a different scheme of my choice, and use all the tips on this site to get one which will have less fees, etc.

My plan is to go for the third option above. Does this sound right to everyone? Am I being harsh on Axa by assuming they'll be getting fees?

If option three is the answer, my next question is more logistical: what order do I do things in. Do I go to Axa, tell them I'm about to open a new fund, get the money then open the new fund with it? Or is it possible to open a new fund with no initial payment, then send the details to Axa and get them to do a transfer? I assume this latter route is possible as it's a lot simpler for everyone concerned, but I know these things aren't always logical.

Advice welcome! Please let me know if any of this sounds wrong!
Thank you!

EdInvestor

Does the pension at AXA contain or consist of "protected rights" money?

dunstonh

My plan is to go for the third option above. Does this sound right to everyone? Am I being harsh on Axa by assuming they'll be getting fees?

AXA have a couple of plans which are very good value and have a large fund range. They can often come out amongst the best provider under some circumstances. So you may be harsh on them. They also have some expensive legacy contracts which are poor quality and have higher charges. In which case you would not be harsh.

AXA have awful admin on the pension front. They dont do what is asked and they service a lot of it in India and even AXAs British based staff have admitted that once an equiry goes to India, it often doesnt come back.

Do I go to Axa, tell them I'm about to open a new fund, get the money then open the new fund with it? Or is it possible to open a new fund with no initial payment, then send the details to Axa and get them to do a transfer? I assume this latter route is possible as it's a lot simpler for everyone concerned, but I know these things aren't always logical.

You ask AXA for the pension discharge forms and you complete a pension transfer application with the new provider. If there are protected rights (which is likely as you cannot transfer the scheme to the occ scheme) then you will need the appropriate HMRC form as well. Typically a CA1544.

sjb92

EdInvestor wrote: »

Does the pension at AXA contain or consist of "protected rights" money?

I'm afraid I have no idea; I don't think so as I don't remember opting out of anything. The reason it isn't transferable is because the Axa scheme does not apply each pension terms and benefits for male and female members.

sjb92

dunstonh wrote: »

You ask AXA for the pension discharge forms and you complete a pension transfer application with the new provider. If there are protected rights (which is likely as you cannot transfer the scheme to the occ scheme) then you will need the appropriate HMRC form as well. Typically a CA1544.

That is really useful, thank you. Although as I say, I don't think there are protected rights. I can't find any reference to them in the paperwork and it would be something I would have consciously done - and I don't remember doing it.
I will try and mine some more information from Axa and report back.

dunstonh

Final salary schemes only normally reject you if there are protected rights in the plan or you have been employed longer than 12 months (some of the Govt backed schemes).

sjb92

I have checked, and there are no S2P payments into this fund. The contributions came from my employer, and from me, and there are no other sources shown on the statements. I'm within 12 months of joining my new scheme (just for clarity: I have joined this scheme wit no problems, I'm just trying to top it up with this extra money for the sake of not paying too much in fees and tidiness). The sole reason for the rejection of this transfer is this isue with the fact that the Axa scheme could not or would not certify that their benefits were on equal terms for men and women.

jamesd

sjb92, if you really want to transfer to your new occupational scheme you could perhaps transfer to a scheme that your current employer says does have equal terms for men and women first, then transfer to this employer. The pot of money doesn't care, though you might have a couple of transfer losses to accept.

It's not certain that transferring is best. If you're single and the new employer reduces benefits assuming that you have a marriage partner to get benefits after you die, say. Or perhaps you might have a civil partner instead of married partner and the new plan might not handle that so well. Or an unmarried partner. Or children to inherit might be treated less well.

dunstonh

Is the AXA pension are personal/stakeholder, retirement annuity contract or section 32 buy out bond?

I cannot see any reason on a personal pension that they need to ask axa the question. Asking a provider to certify something which they are not required to do will usually result in a negative response.

Andy_L

sjb92 wrote: »

My new scheme administrators (the MOD People Pensions and Pay Agency) have been very helpful - great customer service, very prompt etc.

Must be adifferent part of the PPPA to the one I deal with:cool:

Is this AXA scheme a money purchase or final salary scheme? As I male/female difference to me implies a FS.

sjb92

Thanks to everyone for your help and advice. I've made some calls using the questions you've asked and here's what I've found out:

- the old scheme is invested in the AXA Managed Fund. It is a Flexible Reitrement Account in an "exempt approved" company penson scheme operated by my ex-employer. It is charged 1% of the fund value once per year as a management fee. It is not a final salary scheme.

- I assume that the other admin charges are covered by my old employer.

- I can't work out whether AXA are retaining the money they would normally pay in commission, ploughing it in to the fund, or paying it to the employers or to the IFA who advices the trustees.... or whether this doesn't apply in cases like this and I'm misapplying the Pension Moneysaving article.

- the trustees are the board members of my old employer (and/or senior members of staff). They have taken legal advice and based on this it is them who will not sign this declaration undertaking to make good "any deficiancy in the transfer value if the equalisation [of benefits for men and women] is found to be inadequate". This is despite the fact that the benefits are equal for men and women as it appears to be a simple contributory pension (employee 7.5%, employee 3% plus unmatched additional voluntary contributions). Basically they don't want to run the risk of being personally liable for something which their financial advisor said was still uncertain in law etc and which they considered unreasonable.

Jamesd - I note your point on transferring not always being best; but, my current plan is that I like my new job, I don't plan to ever leave, and so buying a couple of extra years' service would be useful as it would get me closer to the full 2/3rds of final salary when I retire - and I plan for that final salary to be quite a good one! Obviously nothing in life is certain and I may not be here forever, but that's certainly the most likely plan right now.

Thanks again everyone. I think it now boils down to can I beat 1% once per year. Looks like I need to do some research!