NHS/Personal Pension Quandry

tylr

I'll start by saying that I've got no real clue about pensions so my thoughts may be completely wrong here...

I work in the NHS and have been a member of the NHS scheme for about 15 years, part of it is the old 2008 scheme and the remainder in the 2015 scheme. While sorting out a load of paperwork during a house move I've found documents regarding an employers pension scheme that we were almost pushed into joining 20+ years ago, the employers pension is in two parts, one with my contributions and the other is because the contracted us out of Serps.

I'm now in the position that I have access to the old pension and it appears that the company running it charge a high% fee. I can't transfer this pension in to the NHS scheme as I've been a memebr too long but would it be worth transferring it in to somethign like a Vanguard SIPP scheme? I'm not going to be contributing much, if anything in to the scheme but my logic is that it's better than it sitting with a firm who arre charging high fees.

Is ther anything else I can do with the old pension? I'm early 40's and it's not worth a huge amount, about £15k, so at the moment it just seems like dead money.

xylophone

I've found documents regarding an employers pension scheme that we were almost pushed into joining 20+ years ago, the employers pension is in two parts, one with my contributions and the other is because the contracted us out of Serps.

You mean that you were strongly encouraged to join an occupational pension scheme and that you did join it?

What kind of pension scheme was this?

Was it a Contracted Out Salary Related Pension Scheme?

Or a Contracted Out Money Purchase Scheme?

tylr

xylophone said:

I've found documents regarding an employers pension scheme that we were almost pushed into joining 20+ years ago, the employers pension is in two parts, one with my contributions and the other is because the contracted us out of Serps.

You mean that you were strongly encouraged to join an occupational pension scheme and that you did join it?

What kind of pension scheme was this?

Was it a Contracted Out Salary Related Pension Scheme?

Or a Contracted Out Money Purchase Scheme?

I've no idea what kind of scheme it was, all I can remember, apart from the hard sell, is that we paid a small contribution of around 2% and our employer paid in either 1% or 2%. The other part of the policy was related to being contracted out of Serps but I have no recollection of being told what this meant other than being told it was the best thing to do.

I know it's not very helpful in trying to describe the scheme but it was 20+ years ago when I was 18 and had even less idea about pensions than I do now!

Brie

Contact the pension company and ask that they do a pension review.  This will clarify whether this is actually a personal pension which you have been mis-sold or an occupational scheme.   They may say that they don't need to do a pension review as they should have been completed some years back but they may also say the don't need to do one due to you having been enrolled in an occupational scheme.

fyi - I don't know why you can't move the money to the NHS scheme.  I wasn't aware there was a time limit for transferring in to them.  I would double check on this bit.

tylr

Brie said:

fyi - I don't know why you can't move the money to the NHS scheme.  I wasn't aware there was a time limit for transferring in to them.  I would double check on this bit.

From what I've read this morning you can only transfer a pension in to the NHS scheme within two years of joining it.

xylophone

I wasn't aware there was a time limit for transferring in to them.  

There is.

See https://www.nhsbsa.nhs.uk/member-hub/transferring-scheme

xylophone

I've no idea what kind of scheme it was, all I can remember, apart from the hard sell, is that we paid a small contribution of around 2% and our employer paid in either 1% or 2%. The other part of the policy was related to being contracted out of Serps but I have no recollection of being told what this meant other than being told it was the best thing to do.

What information do you have?

An annual statement?  Scheme Guide?

tylr

xylophone said:

I've no idea what kind of scheme it was, all I can remember, apart from the hard sell, is that we paid a small contribution of around 2% and our employer paid in either 1% or 2%. The other part of the policy was related to being contracted out of Serps but I have no recollection of being told what this meant other than being told it was the best thing to do.

What information do you have?

An annual statement?  Scheme Guide?

So after some digging about on the Reassure website I've found some details.

I've got a copy of the annual statement for each of the two policies, there's no scheme guide and no sign of it on their website.
The fund is listed as "Managed (B) Pension Standard Series 01.
The two policies are listed as "Personal Pension Unitised" and "Personal Pension Rebate Unitised" 
I can't even find the management fee listed anywhere on the site or statement to compare it to others, just a figure showing their charges for the year.

JoeCrystal

At least you got paperworks now. Might be worth to get in touch with them to get your address updated so you get an annual statements from them.

jamesd

What are their charges for the year? And maybe a more precise value? that way we'll be able to see how bad it looks. On old plans up to around 1.5% of the balance, so around £225, would be expected. That's for both the pension platform and for the individual investment funds held within it.

No need to worry that being contracted out of the earnings-related part of the state pension was bad. It wasn't and the 2016 state pension changes have increased the advantage. Now, you'll have the Personal Pension Rebate Unitised part and will also get the highest possible new state pension, while someone not contracted out would just get the state pension part of that. So you've got a bonus pot of free money in effect.

Originally the rebate portion had guarantees to protect what the government wanted, like a requirement to buy a joint life annuity even if single. Those requirements were removed some years back and you can now use it as you wish, with one possible exception: there might be a guaranteed minimum pension aspect. That's a potentially valuable benefit and it's worth finding out. If there is a GMP then it's also worth monitoring how close to 30k the value of just that portion gets because advice is likely to be required to transfer it elsewhere once it's above that value, because of the potential value of the GMP.

It's also worth trying to find out whether there is a guaranteed annuity rate (GAR) because those can also restrict transfers and can also be good value, or not. Plans started after around 2000 tended not to have GARs.

Push or no push, it's turned out to be a good move for you.

tylr

Thanks for that @jamesd it's a relief to hear that!

The statement is saying the policy is worth £14k with policy charges of £55 and it increased in value by £440 over the previous year.
So if my maths is correct that's a fee of around 0.4%?