Keep company pension but open SIPP due to poor fund choices

tunnsco

Hello,

In order to receive employer contributions I have an employer pension scheme but the range of funds available are poor. Given this, having read the terms and conditions it seems I can transfer a portion of my company scheme to a separate scheme which would most likely be a SIPP in my case. I have a pretty good idea of the funds I want to invest in, nothing funky but simply more likely to perform better than the ones I have access to via my company scheme (I hope). Should this work in practice at least initially I would hope that possibly annually I could transfer portions to the SIPP. Has anyone done this in practice?

Also, with respect to the poor selection of funds (Zurich). Some are funds like Zurich Baille Gifford etc and some are simply straight funds but the range is poor. Has anyone had any joy having their company pension provider invest in funds for them that are not immediately available on their platform online?

Best,
t

Malthusian

tunnsco wrote: »

Should this work in practice at least initially I would hope that possibly annually I could transfer portions to the SIPP. Has anyone done this in practice?

Yes, there should be no reason why you can't do a partial transfer.

Personally I plan to only do this when the employer pension is no longer being paid into, and use my stocks & shares ISAs for more speculative investments. As well as avoiding yearly hassle, this gives me a hedge against the risk that I am less clever than I think I am. But each to their own.

Also, with respect to the poor selection of funds (Zurich). Some are funds like Zurich Baille Gifford etc and some are simply straight funds but the range is poor. Has anyone had any joy having their company pension provider invest in funds for them that are not immediately available on their platform online?

You can ask but it would be quicker to forget it. Employer schemes tend to have very limited fund selections for two very good reasons. Firstly, to minimise costs. Secondly, to reduce the risk that employees invest all their money in a load of rubbish and then complain that the employer shouldn't have let them blow their pension fund. I would say the chance of the scheme allowing access to funds that aren't on the list is minimal.

There are employer schemes that allow a wider range of funds to those who want to self-select, but if you've read through the terms & conditions, you're probably already seen the full fund range.

vacheron

tunnsco wrote: »

Hello,

In order to receive employer contributions I have an employer pension scheme but the range of funds available are poor. Given this, having read the terms and conditions it seems I can transfer a portion of my company scheme to a separate scheme which would most likely be a SIPP in my case..........

I do this.

I use my company pension to receive my employer contributions and also to save my NI and gain employers NI as we operate a salary sacrifice scheme.

The number of funds are OK, but the annual charges are quite high, so whenever I reach a certain point (which usually coincides with a higher level of any current pension transfer cashback promotion from the likes of Hargreaves Lansdown etc), I transfer a lump sum over to their equivalent fund and start saving up again via my company scheme.

Albermarle

There was a similar question recently and the answers were on the lines of it is possible to transfer out funds ( confirmed by Vacheron above ) but you need to double check your workplace pension provider is OK with it.
Regarding not enough fund choice - approx. 95% of workplace pension money is just in the default fund . Of the remaining 5%, probably most of that goes into lifestyle/multi asset funds, not that different from the default fund. There is simply almost no demand for more choice of funds for workplace pensions, although some still offer up to a couple of hundred.
When I recently compared my current and ex workplace pensions with SIPPS . For two of them a SIPP had lower charges but for the other two the workplace pension had lower charges due to the deal the employer negotiated when they were set up .

AnotherJoe

A few people at my last employer did this although it hada very wide choice of funds, thousands literally. No shares or ETFs so maybe that was why.

tacpot12

How big an issue is it that the range of funds available is poor? You only need one good fund, so it is that there are no good funds? Or is it that you want to invest in a range of high risk areas?

Lokolo

Check with the pension provider though. Some do not allow partial transfers whilst still contributing.

tunnsco

Hello,

Many thanks for all the replies. I checked at work today and I am able to do as most replies confirmed, setup a SIPP and transfer into that occasionally. Someone asked is the range of funds that bad, well, I guess it's all relative. There are quite a few funds and some of them have not bad performance. I'm sure I could pick one of the better ones and just fire it all into that. However, I just feel a bit uncomfortable with that approach and for the specific funds on offer very few of them are in the 1st, even 2nd quartile.

As I get a bit older I want to manage (or oversee) the fund a bit more and I've picked sectors I think are right for me to invest in. I'll check performance every 6 months and if I've say invested in a IA Mixed Investment 20-60% Shares sector fund and it's maybe slipping out of favour, seems to be struggling then I want the flexibility to flip it into a better peer fund, or maybe I'll give it another six months and see what happens. For example, if I wanted to throw some exposure directly to China with an allocation to a China fund, my pension provider has one and it's 4th quartile for a number of periods. I'm not trying to be a fund manager but just want a bit more control that I'm not getting.

Anyhow, thanks again for all the advice, much appreciated.

best,
t