Draw Down Now or Later

nikal

I finished work a couple of years ago and my Aviva DC pension has been sitting there it has lost around 8% this year which isn't too bad. At some stage I need to transfer it into a draw down pension scheme so I can top up my DB pensions once a year. I don't want to take a large lump sum at the beginning just regular amounts every year. I was waiting until the markets improved again however I was thinking that if I transfer now to a draw down scheme surely whatever fund I buy into go into will (in theory) also be devalued at this time by around the same amount?
Hopefully that is all understandable? Do I wait until the markets return to normal(12/18 months?) or go for it now?
 

Albermarle

You probably do not literally have to transfer to a drawdown scheme, it can be as simple as using your current pension to drawdown from, or Aviva just transferring you internally from one scheme to another. The older the pension the more likely it will have to be transferred before drawdown.
 I don't want to take a large lump sum at the beginning just regular amounts every year.
With a modern pension this should be no problem, but best to talk to your provider to see what they will do. If you are not happy with what they say it is easy to transfer to another provider.
I was waiting until the markets improved again however I was thinking that if I transfer now to a draw down scheme surely whatever fund I buy into go into will (in theory) also be devalued at this time by around the same amount?
This is generally true, although different funds will react to market conditions in different ways. 

Do I wait until the markets return to normal(12/18 months?) or go for it now?
Markets have been normal, they always go up and down. If you mean wait for them to recover recent losses, then two points.
1) They have  already recovered to some extent since the 'bottom'
2) They will one day regain all losses, but when that will be, is anybody's guess. 6 months, 6 years, who knows.

Qyburn

Albermarle said:

You probably do not literally have to transfer to a drawdown scheme, it can be as simple as using your current pension to drawdown from, or Aviva just transferring you internally from one scheme to another.  

I found Aviva completely unhelpful, wouldn't let me increase regular contributions, or make one off contributions, and they said they had no alternative plan to offer me. If I wanted either of these I would have to transfer away from Aviva altogether.

trevjl

Really ? I am no expert but surely that can't be right ?
First bit maybe, but surely you can transfer it. What would be the difference to them if for example you transferred it elsewhere and then back to a different pension ? so struggle to see why they say that. 
Someone will know more, maybe you just got a clown on the phone, it's not unknown.
Aviva told a colleague at work he could not transfer his from the Pru to them as it was over 30K, complete nonsense of course, I did exactly the same thing when the company changed providers.

Albermarle

Qyburn said:

Albermarle said:

You probably do not literally have to transfer to a drawdown scheme, it can be as simple as using your current pension to drawdown from, or Aviva just transferring you internally from one scheme to another.  

I found Aviva completely unhelpful, wouldn't let me increase regular contributions, or make one off contributions, and they said they had no alternative plan to offer me. If I wanted either of these I would have to transfer away from Aviva altogether.

There must be some kind of misunderstanding. Difficult to think of a reason why they would not let you increase contributions, or add a lump sum. If it was because it was some unusual/old pension, then they have more modern ones you can transfer to.

dunstonh

Qyburn said:

Albermarle said:

You probably do not literally have to transfer to a drawdown scheme, it can be as simple as using your current pension to drawdown from, or Aviva just transferring you internally from one scheme to another.  

I found Aviva completely unhelpful, wouldn't let me increase regular contributions, or make one off contributions, and they said they had no alternative plan to offer me. If I wanted either of these I would have to transfer away from Aviva altogether.

Was it a legacy plan that is no longer open for new business or increments?  e.g. a s226 RAC cannot be topped up in most cases.  S32s cannot be topped up.  Old PPPs often cannot be topped up (especially those belonging to a previous company)

Aviva told a colleague at work he could not transfer his from the Pru to them as it was over 30K, complete nonsense of course, I did exactly the same thing when the company changed providers.

It is only nonsense if it doesnt have safeguarded benefits.  If it does, then it is not nonesense.

Qyburn

Albermarle said:

Qyburn said:

Albermarle said:

You probably do not literally have to transfer to a drawdown scheme, it can be as simple as using your current pension to drawdown from, or Aviva just transferring you internally from one scheme to another.  

I found Aviva completely unhelpful, wouldn't let me increase regular contributions, or make one off contributions, and they said they had no alternative plan to offer me. If I wanted either of these I would have to transfer away from Aviva altogether.

There must be some kind of misunderstanding. Difficult to think of a reason why they would not let you increase contributions, or add a lump sum. If it was because it was some unusual/old pension, then they have more modern ones you can transfer to.

I don't think there could have been any misunderstanding, this was a phone conversation specifically about me wanting to make one-off contributions. All I got was "not possible" to any of the options, followed by a long blurb about how I'd have to seek regulated advice before I could transfer away from Aviva.  Maybe the department and staff were solely tasked with looking after ex-Friends Provident accounts and had no interest or knowledge of any other part of Aviva. Whatever the reason it came down to what quite a few people seem to experience, an attitude of "we won't or can't do what you ask, but by the way we'll put as many obstacles as we can to stop you moving your business elsewhere".

Albermarle

Qyburn said:

Albermarle said:

Qyburn said:

Albermarle said:

You probably do not literally have to transfer to a drawdown scheme, it can be as simple as using your current pension to drawdown from, or Aviva just transferring you internally from one scheme to another.  

I found Aviva completely unhelpful, wouldn't let me increase regular contributions, or make one off contributions, and they said they had no alternative plan to offer me. If I wanted either of these I would have to transfer away from Aviva altogether.

There must be some kind of misunderstanding. Difficult to think of a reason why they would not let you increase contributions, or add a lump sum. If it was because it was some unusual/old pension, then they have more modern ones you can transfer to.

I don't think there could have been any misunderstanding, this was a phone conversation specifically about me wanting to make one-off contributions. All I got was "not possible" to any of the options, followed by a long blurb about how I'd have to seek regulated advice before I could transfer away from Aviva.  Maybe the department and staff were solely tasked with looking after ex-Friends Provident accounts and had no interest or knowledge of any other part of Aviva. Whatever the reason it came down to what quite a few people seem to experience, an attitude of "we won't or can't do what you ask, but by the way we'll put as many obstacles as we can to stop you moving your business elsewhere".

I think the issue is that in your original post, you said it was an AVIVA DC pension, but clearly it must not be a standard one, and must have some safeguarded/guaranteed benefits. I do not think you have said what they are ?

Qyburn

Albermarle said:

I don't think there could have been any misunderstanding, this was a phone conversation specifically about me wanting to make one-off contributions. All I got was "not possible" to any of the options, followed by a long blurb about how I'd have to seek regulated advice before I could transfer away from Aviva.  Maybe the department and staff were solely tasked with looking after ex-Friends Provident accounts and had no interest or knowledge of any other part of Aviva. Whatever the reason it came down to what quite a few people seem to experience, an attitude of "we won't or can't do what you ask, but by the way we'll put as many obstacles as we can to stop you moving your business elsewhere".

I think the issue is that in your original post, you said it was an AVIVA DC pension, but clearly it must not be a standard one, and must have some safeguarded/guaranteed benefits. I do not think you have said what they are ?

It was a personal pension taken out with Friends Provident via brokers Endsleigh, in 1992. Purely a personal deal, no employer involvement ever and I can't see any reference to guaranteed or safeguarded benefits. Would guaranteed benefits have stopped me increasing regular contributions, or making one-off contributions?

It's water under the bridge now I have made other arrangements, but the point is that contacting Aviva may not get you anywhere.

Qyburn

dunstonh said:

Was it a legacy plan that is no longer open for new business or increments?  e.g. a s226 RAC cannot be topped up in most cases.  S32s cannot be topped up.  Old PPPs often cannot be topped up (especially those belonging to a previous company) 

That's almost certainly what it was. As to why they refused to transfer me to a new Aviva account, maybe that's self interest if the dept was solely dealing with ex-FP accounts a transfer even to another part of Aviva would be lost business.

dunstonh

Qyburn said:

dunstonh said:

Was it a legacy plan that is no longer open for new business or increments?  e.g. a s226 RAC cannot be topped up in most cases.  S32s cannot be topped up.  Old PPPs often cannot be topped up (especially those belonging to a previous company) 

That's almost certainly what it was. As to why they refused to transfer me to a new Aviva account, maybe that's self interest if the dept was solely dealing with ex-FP accounts a transfer even to another part of Aviva would be lost business.

At the moment, ex FP and AXA plans are still being handled out of their original offices and not properly integrated into the Aviva systems.  To move it to a new plan would see it treated as new business and those offices dont have any in-house distribution.  So, only an IFA can move those into another Aviva plan.    Aviva platform offers price discounts for moving Aviva L&P business to it.      

There is no target of self interest.  It is just a commercial reality of merging legacy companies into a large group on different systems coupled with the regulatory requirements.       There may only be 10,000 people with the same plan as you but moving it onto a modern system with the ability to top up may cost hundreds of millions of pounds.  So, it can be cheaper to say to people that they should top up into a different plan or transfer it.            This is also why so many of the insurers have sold off their legacy book.  Aviva is one of the few that hasnt....yet.