Pension transfer delays

Philbird

Hi I retired in June with a pension pot of £149000 the transfer has still not been transferred the pension provider now are informing me the pot has reduced to £119000, my question is… can the pension administrator do this as the delay is down to them despite me and my financial advisor constantly asking why the delay

dunstonh

It largely depends on the reasons for the delay and the type of pension.

If it's an auto-enrollment scheme, the transfer out cannot occur until the employer has told the pension provider that you are no longer an employee.  That tends to happen in the payroll after your final salary and P45 have been issued.    (it depends on the efficiency of the employer or the payroll company they use).

Then you have the new pension transfer rules.  Auto-enrolment schemes and many occupational schemes have taken these on very strictly compared to the retail pension providers.   I am waiting on a pension on an occupational scheme that has had two different types of discharge form (effectively an options form initially followed up by the nudge form incorporating a discharge form).  The wait between them was counted in weeks rather than days.   And that is often the case with occupational pension administrators.   It is over 2 months on and that one hasn't been completed.  Yet the retail pension they held was transferred within 3 days with no nudge form needed.

Most occupational pensions and a number of auto-enrolment do not use the Origo transfer system.  So, they revert to the old paper and postal method.

Marcon

Philbird said:

Hi I retired in June with a pension pot of £149000 the transfer has still not been transferred the pension provider now are informing me the pot has reduced to £119000, my question is… can the pension administrator do this as the delay is down to them despite me and my financial advisor constantly asking why the delay

There may be good reasons for the delay - but you/your advisor should be told what these are. Have you started a formal complaint about their lack of a response to your requests for information? 

Albermarle

Philbird said:

Hi I retired in June with a pension pot of £149000 the transfer has still not been transferred the pension provider now are informing me the pot has reduced to £119000, my question is… can the pension administrator do this as the delay is down to them despite me and my financial advisor constantly asking why the delay

Although investments are down this year, a drop of 20% from June to today seems a lot.

Unless this is maybe a DB ( defined benefit) pension where the CETV ( Cash Equivalent Transfer Value) has dropped, which would be less surprising ?

dunstonh

Although investments are down this year, a drop of 20% from June to today seems a lot.

That is a concern as most areas fell between June and October, but November saw them recover back to June levels.   Although the losses from November 21 to June 22 still havent beeen recovered.

Unless this is maybe a DB ( defined benefit) pension where the CETV ( Cash Equivalent Transfer Value) has dropped, which would be less surprising ?

They have fallen heavily over the last 13 months.  So, that would fit the bill but the OP says their pot has fallen.  DB schemes don't have a pot.   Although how many times have we seen people incorrectly refer to CETVs on DB schemes as a pot!

A DB pension would also explain the delay.  They do typically take much longer than DC pensions.

Marcon

dunstonh said:

Although investments are down this year, a drop of 20% from June to today seems a lot.

That is a concern as most areas fell between June and October, but November saw them recover back to June levels.   Although the losses from November 21 to June 22 still havent beeen recovered.

Unless this is maybe a DB ( defined benefit) pension where the CETV ( Cash Equivalent Transfer Value) has dropped, which would be less surprising ?

They have fallen heavily over the last 13 months.  So, that would fit the bill but the OP says their pot has fallen.  DB schemes don't have a pot.   Although how many times have we seen people incorrectly refer to CETVs on DB schemes as a pot!

A DB pension would also explain the delay.  They do typically take much longer than DC pensions.

I think for most non-pensions people, they have enough to grapple with to grasp the basics, never mind the minutiae of the terminology!

I too wondered if this was a DB transfer where OP/their adviser had missed the deadline for the original transfer and the scheme had issued a new quote, which would fit with the fall in the value. Until OP comes back to clarify, we're all in the dark.

OP - did your current scheme say you were required to seek scam-specific advice from MoneyHelper because 'amber flags' had been raised as a consequence of the scheme to which you wish to transfer? If so, were you able to do so within the timeframe you had to meet to proceed with the original transfer value?

dunstonh

I think for most non-pensions people, they have enough to grapple with to grasp the basics, never mind the minutiae of the terminology!

I would largely agree.  However, if this is a DB scheme and the person has used an adviser, then it is a requirement and expectation that the differences between DB and DC are made fully aware of.  Going from a pension with no pot to one that has a pot is a key risk disclosure.