Legal and General issue

doris540

 My Husband made redundant two years ago after 30 years plus had to claim it all from RPS company folded. His original DB pension has now gone into PPF and the DC scheme that replaced it has now been put with Legal and General. However they are saying that no more contributions can be made. I cant understand why this should be. Hes also got his own PRU pension which can be paid into. Dont understand why LG are refusing anymore contributions. There is just under £70k in the LG pension

xylophone

However they are saying that no more contributions can be made. 

What reason is given by L&G? 

gm0

Not all private pensions are the same. It is in fact fairly normal with a trustee run occupational pension for the membership to drop into a not-contributing any more deferred member status upon leaving employment.  It is not a personal pension product or a SIPP. 

I think this is the likely explanation.  If it was a straight "personal" product - he could save in it. So it probably isn't.  If it was an occupational trust scheme run for the employer by trustees and outsourced somewhere for admin then it would be normal not to be able to continue saving in it upon leaving that employment.  In this case everybody left. But often the same thing happens if it's just you.

With the sponsoring employer now having failed and wound up it is no longer providing employment or inputs to either scheme DB (which must have fallen short of funding needs or it wouldn't end up in PPF) or into the DC one.  No employees = no contributions.  Scheme is static and then running off with declining membership based on a mix of transfers out and deaths.

The "trustees" who are the named individuals still responsible for directing the operation of the occupational DC trust based scheme now have to find a *low cost* admin solution for the ex-employees DC pension scheme and its member pots.

Any costs for this admin for the membership have to come from a scheme reserves or via a "platform" fee charged to remaining members of the scheme. L&G provide this sort of admin service all the time to many such schemes with and without active employees.  As do others.

The key issue that this sort of scheme is not the same as a life company personal product or a SIPP from an HL or a Fidelity.  It was a collective exercise and linked to the employment.  Restricted in it's scope, terms, access options, investment options etc.

I think that the misunderstanding arises from this  i.e. not a SIPP or a Personal Pension product *individually* taken out by your husband.  When employed "there" he could save and the employer chipped in at some level.  Now he isn't. He can't.
He still has that pot. Which can remain there (admin by L&G).  Or it can be moved.  At his choice.

He was then and still is entirely free to separately buy a personal pension / SIPP product from any provider and save in that himself now. He may be offered access to another scheme via new employment if relevant.

Acting in the pensions admin role for such a scheme for the trustees they (L&G) don't offer functionality to just save as you choose.  They are also regulated to not attempt to cross sell you their own company products which do have that feature.

If there is desire for new saving into a pension - then a flexible product with a good investment range should be selected from the mainstream providers regularly discussed here.  Subject to considering the current and to be costs/rules etc.) - a transfer from the ex employer DC scheme into the new product may be a solution. 

But there are a few things to check first.  (Costs/fees/investment range, % of tax free cash in existing (if >25%) being the basics.

Many threads about that here.

dunstonh

However they are saying that no more contributions can be made. I cant understand why this should be.

Pensions come in different types. For example, if the L&G pension is transfer plan then it would not accept regular contributions.   Of if its a legacy plan that stopped being sold many years ago, then it would not accept new regulars.   or if it was an occupational pension lnked to a specific employer where you need to be employed with them to make contributions.

Marcon

doris540 said:

 My Husband made redundant two years ago after 30 years plus had to claim it all from RPS company folded. His original DB pension has now gone into PPF and the DC scheme that replaced it has now been put with Legal and General. However they are saying that no more contributions can be made. I cant understand why this should be. Hes also got his own PRU pension which can be paid into. Dont understand why LG are refusing anymore contributions. There is just under £70k in the LG pension

Surely this was answered when you asked a previous question last year: https://forums.moneysavingexpert.com/discussion/6254259/barnett-waddingham-issue#latest