Partial transfer from group personal pension to SIPP

pauper79

I would like to transfer part of my workplace GPP to my SIPP. This is to benefit from lower charges and a wider range of funds. But I don't want to transfer all of it, and I want to continue paying into it. According to Aviva (my GPP provider) it is possible, and there are no charges out, but they say this: 

"A pension is divided into a number of segments. To perform a partial transfer, we have to surrender the relevant amount of segments. In order to keep the pension in force, it needs to have at least one segment remaining. If the number of segments decreases to one, no further partial transfers can be made. There is no way to add additional segments to a pension, even if the policyholder or employer continue to pay pension contributions. Currently, your pension is made up of 9999 segments."

I don't understand the practical impact of this. If I end up with e.g. 5000 segments, is there any possible detriment? When I asked, they could not explain. 

I would welcome any advice!
Thanks

dunstonh

This would suggest it is an older type of pension.     Every time you do a partial transfer, the number of segments will reduce.    You can only do partial transfers if there is more than 1 segment on the plan.  Segment values are often the total value divided by the current number of segments.  Although there are variations on that.

So, lets say your pension was £50,000 made up of 9999 segments and you wanted to transfer half the value, you would lose half of your segments.

The possible detriment is you transfer small values too frequently and use your segment count up quickly.

Marcon

pauper79 said:

I would like to transfer part of my workplace GPP to my SIPP. This is to benefit from lower charges and a wider range of funds. But I don't want to transfer all of it, and I want to continue paying into it. According to Aviva (my GPP provider) it is possible, and there are no charges out, but they say this: 

"A pension is divided into a number of segments. To perform a partial transfer, we have to surrender the relevant amount of segments. In order to keep the pension in force, it needs to have at least one segment remaining. If the number of segments decreases to one, no further partial transfers can be made. There is no way to add additional segments to a pension, even if the policyholder or employer continue to pay pension contributions. Currently, your pension is made up of 9999 segments."

I don't understand the practical impact of this. If I end up with e.g. 5000 segments, is there any possible detriment? When I asked, they could not explain. 

I would welcome any advice!
Thanks

They aren't being deliberately unhelpful. You are effectively asking them to give advice. They aren't authorised to do that for customers.

pauper79

Thanks both. Yes they pointed me towards an IFA but I feel that is overkill. They should be able to explain the relevance of any information they provide, without giving specific advice. Unless I plan to do thousands of transfers, or want to transfer very precise percentages like 48.39%, I don't see how this information is anything other than totally irrelevant. So I shall proceed on that basis!

dunstonh

Thanks both. Yes they pointed me towards an IFA but I feel that is overkill. 

That is the only thing they can do.   Aviva do not hold the regulatory permissions to give advice.  

They should be able to explain the relevance of any information they provide, without giving specific advice. 

They can provide that information on a generic basis and they appear to have done that.  However, what you have asked here (i.e. practical implications and possible negatives) is personalised and outside of their remit.    Providers are generally pretty scared of going into areas of personalised advice, opinion and scenarios.  Given the current regulatory position and consumer bodies, that is the right position to take.  As frustrating as it may be for you.

older_and_no_wiser

It's a great strategy and one I do (after advice from this forum!).

I have a workplace scheme with HL and transferred a large sum into my personal SIPP with II a few months ago. I did an in specie transfer which only took a couple of weeks. I'm now saving over £50 a month in fees from HL.

My workplace SIPP is a modern pension fortunately, so I didn't have the problem with segments. I would highly recommend anyone with a large pension pot in a high fee platform like HL to consider doing this.