employer pension scheme closing and transferring

tafelmoneysaver

Hi,

My employer pension scheme provider is closing and transferring to a new provider.

The money will be transferred into an identical fund allocation and future contributions will go into the new scheme, with the match rate to remain the same.

I've been offered the chance to also transfer "to another pension scheme of your choice"

I am thinking I could transfer this into my SIPP for greater flexibility,  especially for drawdown.

I haven't yet done the comparison on charges but are there any positives or negatives that I should consider?

(Other than the responsibility moves to me to pick a better fund than the new provider?)

Thank you

Albermarle

Is it clear that your employer is happy to make their ongoing contributions, and your ongoing contributions taken from you salary , to a different scheme than the one they provide ?
Most employers do not like doing this .

tafelmoneysaver

Sorry if I was not clear - Future contributions will go into the new employer scheme, not my SIPP. This would only increase by the historic contributions 

Marcon

tafelmoneysaver said:

Hi,

My employer pension scheme provider is closing and transferring to a new provider.

The money will be transferred into an identical fund allocation and future contributions will go into the new scheme, with the match rate to remain the same.

I've been offered the chance to also transfer "to another pension scheme of your choice"

I am thinking I could transfer this into my SIPP for greater flexibility,  especially for drawdown.

I haven't yet done the comparison on charges but are there any positives or negatives that I should consider?

(Other than the responsibility moves to me to pick a better fund than the new provider?)

Thank you

Charges is exactly the area you need to look at, so doing the comparison before you make a decision would be sensible.

Nothing to stop you transferring your funds out of your employer's scheme to your SIPP when you reach retirement, so you'd have the same flexibility if drawdown is how you want to take your retirement benefits.

AlanP_2

tafelmoneysaver said:

(Other than the responsibility moves to me to pick a better fund than the new provider?)

I would think that the responsibility to pick the fund is with you already irrespective of the scheme / provider. The providers used by your employer may have default schemes that people are put in. That doesn't consider whether it is suitable for your circumstances and risk tolerance though.

A 20 year old with 40+ years until retirement would sensibly make a different fund choice than a 60 year with 5 years to go assuming they stared on the same day. The default will be OK'ish for both of them but ideal for neither.

The only difference will be that there is likely to be less options to choose from than if you set up your own SIPP. 

tafelmoneysaver

Thank you for the reply. Totally agree that it is my responsibility to pick the fund, wherever the money resides:-)

I will further investigate the charges.