SIPP vs occupational pension?

Albermarle

Geranium44 said:

dunstonh said:

 You’ve highlighted risk in so far as costs could be higher or lower on moving to a SIPP and simply wishing to drawdown 25% was I understood risk free.

Drawing the 25% at 55 is not risk-free.  a) it reduces your retirement fund by a quarter.  b) it could create increased taxation for the remainder of your life.

Why would I risk moving to a SIPP of risk existed?

The same question could be asked about taking 25% of your retirement fund so early?   It's a risk but risks can be mitigated or reduced or have justifiable reasons for taking that risk that really means it is not much of a risk after all.  Or it could be a mistake that you are not aware you are doing.

I can only wonder why the administrator failed on four separate phone calls and follow up emails to alert me to the scheme disallowing the TFC on reaching 55.

They would not normally contact you to say they dont offer some functionality unless you specifically ask them.  Their generic documentation would normally state terms without the need to draw your attention to it specifically.      
So, it is interesting to wonder what prompted them to say that.   Maybe the person you spoke to originally didn't understand why you were doing it.  They may not even know what drawdown was.   After all, front line clerical workers will often only know the basics and often only be limited to their own options and not those available elsewhere.

The regulator is currently investigating. 

Which I expect won't lead to anything as they cannot force a provider/administrator to give functionality that they do not offer.   The occupational scheme has told you the solution, move to a SIPP, and that wont cost you anything.   It is one of the options you would have had to select from if you had been given the right info to begin with.    So, you are not out of pocket or in a worse position other than time.  However, it only takes a few minutes work to key in a transfer request and with DC schemes its a matter of days to a week or two with most to get them transferred.   So, no big deal.

Thanks for your helpful answers … not sure why you think an administrator failing to give information on four separate occasions by four different call handlers/ email responders is no big deal. I agree administrators do not give advice but financial decisions made on information that is confirmed by f/I email is poor. Sounds like negligence to me. Regulator has acknowledged a case to answer but I agree, unlikely to result in sanction. 

Thanks again really appreciate the detailed advice. 

Pensions are quite complicated and pension administrators often employ low paid inexperienced staff. So most likely that is the issue .
I have had a couple of issues in the past, but have kept up pressure on the pensions provider rather than going to any official body . In the end they both made a modest ex gratia payment for my troubles ( or more likely to shut me up !) BY coincidence it was £200 in both cases , maybe it is some kind of unofficial benchmark amount in the industry .

As said you can open a new SIPP , which will have fully flexible drawdown facilities , in a few minutes online and ask them to transfer in the current pension at no cost . The SIPP providers normally mentioned on this forum are Hargreaves Landsdown; Interactive Investor; Iweb; Fidelity & A J Bell, 

Dazed_and_C0nfused

May have missed this but what was the reason given as to why you were unable to take 25% TFLS from the pension that the 4 DC funds were transferred into?

dunstonh

 not sure why you think an administrator failing to give information on four separate occasions by four different call handlers/ email responders is no big deal. 

I was referring to the correction of the situation as being no big deal.     It's little more than several minutes doing a SIPP application and waiting a few days to a few weeks to get the money across.

It's poor administration if you did ask specifically about drawdown functionality being available and told it was.   So, you will likely get a small goodwill gesture but you should perhaps now be focusing on getting it to a SIPP and not waiting for a complaint outcome.    If it was something that cost you money, then you would be looking at something more than that but this is just costing you time.

If you are hoping for them to do allow you to do drawdown then that won't happen.   Drawdown functionality and running crystallised funds along uncrystallised is a major redesign and coding task.   Planning for which is usually measured in years and heavy cost and often results in the existing plan never supporting it and a transfer to one that does being the preferred option.

Andy_L

Dazed_and_C0nfused said:

May have missed this but what was the reason given as to why you were unable to take 25% TFLS from the pension that the 4 DC funds were transferred into?

I think it's that the OP wants to do drawdown and leave the remainder invested?

Geranium44

Andy_L said:

Dazed_and_C0nfused said:

May have missed this but what was the reason given as to why you were unable to take 25% TFLS from the pension that the 4 DC funds were transferred into?

I think it's that the OP wants to do drawdown and leave the remainder invested?

Yes that’s correct. The reason I was given for not being able to make a withdrawal 12 months after the initiation of the transfers was the trustees never allowed such TFLS. Each time I spoke to a member of the administrator team during that 12 month period, I asked the same question, summarised each conversation subsequently and on each occasion I was given reassurance my request would be allowed. 

Each of my phone calls were recorded according to the customer service team and they said it backed up my complaint. 

GunJack

Do remember NOT to Opt Out of your current scheme though, when transferring funds out of it. That would result in you getting no further employer's contribution to the current scheme