Civil Service AVC Scheme - Appointment of Legal & General

swanny65

It has been decided that from Sept 18 any member of the Civil Service defined contribution scheme will have have their contributions directed to L&G. After various delays I received my letter this morning. The following link provides some further detail:

https://www.civilservicepensionscheme.org.uk/members/defined-contribution/legal-and-general-csavc-faqs/

Enclosed with my letter is a two sider from L&G. The default fund is the L&G multi-asset fund. Charges are 0.13 for the fund and 0.17 annual management charge. L&G will allow individual investment choices into a range of funds detailed here:

https://www20.landg.com/DocumentLibraryWeb/Document?lgrouter=CommApp&targetApp=MANAGEYOURSCHEME_DOCUMENTLIBRARY_ENTRY&reference=cabinet_office_AVC_sole_investment_guide.pdf

I currently have my CSAVC invested with Standard Life. I have chosen the funds, after moving from a FSAVC, and its done pretty well. I only pay £50.00 pcm but have done so since 1990's, initially in the FSAVC, and the pension pot is currently worth around £44000.00. My pension is invested in the following 11 funds (about 80% of its value is in the first 6 funds below):

SL BlackRock ACS World ex UK Equity Tracker Pn Fd
SL BlackRock Managed (50:50) Global Equity Pension
SL Blackrock ACS US Equity Tracker Pension Fund
SL Janus Henderson European Selected Opps Pn
SL Newton Multi-Asset Growth Pension Fund
SL SLI UK Smaller Companies Pension Fund
Standard Life Asia Pacific ex Japan Equity Pension
Standard Life European Equity Pension Fund
SL Fidelity Asia Pension Fund
SL Jupiter Income Trust Pension Fund
SL Jupiter UK Growth Pension Fund

Initially I thought there was going to be an option not to redirect contributions to L&G and I could stay with SL but i appear not to fall into that category (I will be checking this asap). I have already informed SL not to move my pension pot. Could I have your opinion on the following:

1. Are the two scheme's investment performance much the same? (cost wise they appear to be the same) I intend to chose my own investments (need to look at what funds have performed well over the past 5 and 10 years) unless the default multi asset fund has historically performed well
2. Have any of the L&G funds given good returns over the past 5 and 10 years.
3. Am I best leaving my pension pot with SL (need to check whether there will be increased charges following the Cabinet Office decision to close this group AVC scheme) or moving it to L&G and splitting across a range of funds as i have currently done
4. Is it worthwhile leaving the CSAVC scheme and continuing to contribute to SL ? I see this as similar to my previous FSAVC (adverse to this as my FSAVC performed terribly)

Thanks for your time. Two further points for info:

I need to act quickly as future contributions will go to L&G from my next payday - 30/09/2018. In October i will be asked whether I wish to move my SL pension pot to L&G.

I am aged 53, almost certain to retire at 60.

I have 31 years in the classic scheme and whatever i pay into the alpha scheme from 2015 to 2025

Thanks again and apologies for the lengthy post - i wanted to give you the full picture

kidmugsy

What's the advantage of contributing to the AVC rather than to a personal pension of some sort? Is it one of those tax-free lump sum advantages?

swanny65

TBH I dont really know. Lower charges in the group AVC than i had in my FSAVC. I am in a company pension scheme and when i joined the FSAVC and then the group AVC i could not take out a personal pension. Have the rules changed ?

The group AVC allows 25% to be taken as a lump sum. My intention is to take the 25% and then draw from it each year in retirement leaving the investment to grow if possible in the funds it is invested in.

swanny65

Bumping please:

1. Are the two scheme's investment performance much the same? (cost wise they appear to be the same) I intend to chose my own investments (need to look at what funds have performed well over the past 5 and 10 years) unless the default multi asset fund has historically performed well
2. Have any of the L&G funds given good returns over the past 5 and 10 years.
3. Am I best leaving my pension pot with SL (SL advise there will be no increased charges to look after the pension pot) or moving it to L&G and splitting across a range of funds as i have currently done
4. Is it worthwhile leaving the CSAVC scheme and continuing to contribute to SL ? I see this as similar to my previous FSAVC. SL have referred me to their pension overview webpage

Thanks

AnotherJoe

11 funds for £44K especially if nearly 80% is with half the funds, seems like too much bother. You've most likely created your own lowish cost global tracker and might as well just have one of those . You must have peanuts in some of the latter funds in which case their actual performance doesn't really matter.

To quickly answer some of your other questions
1. Are the two scheme's investment performance much the same? (cost wise they appear to be the same) I intend to chose my own investments (need to look at what funds have performed well over the past 5 and 10 years) unless the default multi asset fund has historically performed well
You know that phrase "past performance doesn't indicate future performance"? Its true.And you cannot compare schemes since the underlying investments are totally open to choice and thats what defines performance if management charges are the same.

2. Have any of the L&G funds given good returns over the past 5 and 10 years.
It would be amazing if some haven't but that not the right question Lets say there is a technology fund .It will have done well because technology has. It may or may not have done as well as technology funds from other providers. Buying it would essentially be betting that technology will do well in future ,not that L&G tech fund will due to some spiffiness on the part of L&G. (hence the "past performance.." phrase)

3. Am I best leaving my pension pot with SL (SL advise there will be no increased charges to look after the pension pot) or moving it to L&G and splitting across a range of funds as i have currently done
If you like your current investments why change them?

4. Is it worthwhile leaving the CSAVC scheme and continuing to contribute to SL ? I see this as similar to my previous FSAVC. SL have referred me to their pension overview webpage
No idea. That seems to be a very specialist question. The charges are certainly low and as good as you'd get with any outside scheme.Are there any downsides such as being locked into the age at which you can retire or not being able to take money from this scheme one without starting to take from the main CSP one?