Pension transfer: time out of market

Happy_planner

Hi, I'm looking to transfer a workplace pension to a SIPP in order to get a better selection of bond funds.

The old/new provider funds don't match, so I'd need to move everything into cash. The pot is big enough that losing a few percent over a 2-8 week transfer window would hurt. 

Has anyone found a way round this? If not, could I potentially transfer only part of the pension (the intended bond component) into the SIPP and leave the rest invested?

Thanks for any advice.

Marcon

Happy_planner said:

Hi, I'm looking to transfer a workplace pension to a SIPP in order to get a better selection of bond funds.

The old/new provider funds don't match, so I'd need to move everything into cash. The pot is big enough that losing a few percent over a 2-8 week transfer window would hurt. 

Has anyone found a way round this? If not, could I potentially transfer only part of the pension (the intended bond component) into the SIPP and leave the rest invested?

Thanks for any advice.

Do the rules of your workplace pension permit this?

Notepad_Phil

Happy_planner said:

Hi, I'm looking to transfer a workplace pension to a SIPP in order to get a better selection of bond funds.

The old/new provider funds don't match, so I'd need to move everything into cash. The pot is big enough that losing a few percent over a 2-8 week transfer window would hurt. 

Has anyone found a way round this? If not, could I potentially transfer only part of the pension (the intended bond component) into the SIPP and leave the rest invested?

Thanks for any advice.

Potentially you can transfer only part of a pension as that is exactly what I did a few years ago -  but you'd need to check with both the old and new platforms to see whether they would agree to such a partial transfer.

In my case the old platform agreed they would, but it then took a bit of digging to find a new platform that made clear on their forms that a partial transfer was being requested and the space to put what funds/units were to be part of that partial transfer (I didn't want to rely on a separate letter with the details) - it's getting on for 7 years since I did this, so things may have progressed and maybe it's easier now.

In case it's of any use, the platform I eventually used was Alliance Trust Savings, which was later taken over by interactive investor.

gm0

Your scheme may support "partial transfers" out while remaining a contributing member.  Some do.  But many don't (older). 
Mine did not for 30+ years.  Now it does.  So transferring anything to a SIPP was a no go until after leaving the employer. When all of it could go elsewhere if you so desired.  There is no legal obligation on trustees to offer partial transfer - just full. 

And as a fairly rare requirement it doesn't get prioritised by trustees (As not value for money for *all* members which it isn't) 
But it can turn up when drawdown features are added - when contracts for admin are relet.
Worth keeping an eye on.

Full transfer out and stopping contributing may not be workable for you or sensible. 

So they do or they don't. 

If available - sell to cash, settle trades, send cash across process is a risk you just have to put up with where funds aren't available for re-register/in specie (or again specie just not supported at all at policy/process level). 

Towards 2 weeks is realistic for an old scheme instruction to funds across and reinvesting.  Eight weeks is deeply pessimistic for cash transfer. 

You could look at good and bad times of year in terms of typical trading volume and volatility which you can use to try and reduce the chance of sharp movements for or against while in flight. 
But the world can surprise as easily in July/August as well as February/March

Albermarle

I wanted to make a partial transfer from an ex workplace pension to a SIPP. I found in the T's & C's of the old pension that they accepted partial transfers. However there was no cash facility, so I assumed they would sell a proportion of each fund held ( about 5 I think), which was Ok with me. However a couple of weeks down the line I got a call from the old pension asking which funds to sell. Not sure if this would happen in every case though ?

Happy_planner

Thanks for all the advice.

My current provider accepts partial transfers out, so I'll move enough for the bond portion only.

Not that I plan to do it, but I guess making multiple transfers out over time is another way to de-risk the process. 

gm0

A few people here do periodic sweeps of employer schemes.   I could not so didn't investigate.
Key is not accidentally stopping being a contributing member - yet achieving what you want.

In practice paper workflows / admin process sometimes lurk behind the industry automated pull request system create form filling manual workflow and scope for error - inbetween you and teams that won't come to the phone. 

So you are right doing it N times in slices to manage volatility risk is a possible idea - but potentially more painful than you will want to deal with for what it achieves.  Your provider may prove to be quick efficient and slick or not so much. Instincts are correct re slicing finely.