Pension Transfer

GarryP

Hi folks, I work for DHL I'm not financially able to pay into their pension scheme, but I currently have a frozen pension with Zurich, is it worth transferring it to the company pension, if I can, or leave it where it is?

AnotherJoe

No one can answer without knowing many more details than you've provided.
See an IFA or leave it as is.

atush

I would do a full MSE work up, and to make it possible to join the company pension.

You are actually throwing away free money.

PensionTech

If you're not financially able to pay into your pension, you're unlikely to want to spend money on an IFA.

You can transfer if your new scheme will accept the transfer. It doesn't have to; you'll have to ask them in order to find out. It won't garner you any valuable employer contributions, of course. If it's a normal "DC" pension (by which I mean one in which your contributions are invested and you use the pot to secure an income in retirement), and there are no guarantees or anything of the sort attached to the benefits you can get under the old scheme, then the only benefits of transferring the pension will be a) if the regular management charges are lower in your new scheme and b) if the range of investments is better/more suited to your profile. Provided that your new scheme does allow the transfer, you need to get information about how these things compare in both the old and new scheme in order to make a decision.

And I'm with atush - you won't have come on here looking for this advice, and might find it annoying, but it's common for people to underestimate the importance of their pensions and the free money available from their employer, and prioritise something else instead, which will be a bad financial decision in the long term. We don't know the specifics of your financial position but it's worth pointing out that getting your employer to contribute to a pension is really important, and should possibly take precedence over something else that you're spending money on.

xylophone

https://mypension.dhl.co.uk/Resources/Client/DHL/MyPension/Templates/PublicPage.aspx?DocID=3&

Are you in the DC section of the scheme?

dunstonh

...plus by not joining the workplace scheme, this would make the OP an "opt out". It would require a higher qualified IFA with full pension transfer permissions. So, it would be a higher cost.

Plus, the outcome will be "join the scheme and find other ways to save money". Throwing away free money from the employer is rarely a good idea. Frequently, people look at the deduction on their payslip and think that is what they will get if they stop the pension. It is not.

GarryP

Thanks for your input, I don't pay into the company pension, but I'am in the gov opt in scheme, the pension I have with Zurich hasn't moved over the last 3 yrs, this pension was put together from other frozen pensions by an ifa some years ago, this is why I was wondering if it was worth moving it to The company pension, if they will let me, I'm 55yrs by the way.
Cheers
Garry

GarryP

Thanks for that, DHL are sending me a form, so they can look at it and see if I can transfer, Zurich have told me there will be no fee.
So I'll have to weigh up the pro's and conns.
Garry

GarryP

Hi, I'm not in the company scheme, I'm not financially able to join.
Garry

PensionTech

What is the name of the "government opt in scheme" that you are in? Is it the DHL Group Retirement Plan? Find out if you aren't sure. They should have given you paperwork, or if you've thrown it away, the HR department should be able to tell you.

What, if anything, do you contribute to that scheme? What does your employer contribute to it?

Will your employer contribute more if you pay in more?

Are contributions made by "salary sacrifice" (another thing to ask HR)? EDIT: I've found out. If it is the DHL Plan, then contributions indeed can be made by salary sacrifice.

The fact that you are 55 makes this even more of a no-brainer. You could get the employer to put money in to the scheme, put money in yourself, and then just take it back out whenever you want. Most of it would be taxable, but it would have gone in tax-free (and NI-free) so this would be better than neutral. If your scheme allowed it, you could take the money out and then re-join every year. (Well, every month or even every day in theory! - but the hassle of leaving and joining, and the amount of time it would take to do that, wouldn't be entirely practical.)

atush

GarryP wrote: »

Hi, I'm not in the company scheme, I'm not financially able to join.
Garry

Make yourself financially able. Cut your outgoings, and increase income any way you can.

You would be the first person on all of MSE who could not find ways to cut back- having done a proper SOA and spending diary.