Peoples Pension Refusing to Transfer Out

Pat38493

ricster999 said:

Pat38493 said:

ricster999 said:

Well the answers seem to be consistent, which I find amazing.
I was a 'mortgage prisoner' a few years ago. I know appear to be a 'Pensions Prisoner'.
What a mess.

However you would probably lose x months of employer contributions while taking care of all this.
I would and it would be quite a significant amount

The other question here would be - how is your current PP pension invested?  What is the AJ Bell fund that you want to put it into?  Do you really believe that you can choose a better investment choice than whoever your employer engaged to do that?  Did an IFA advise you on this?
I want to transfer to a SIPP. I've managed it pretty well thus far and want to continue making my own investment decisions. Its not a specific AJ Bell fund btw.

How long is "thus far" in relation to the total amount of time until your intended retirement?

I don't think AJ Bell does employer pensions so even if you change employers you still wouldn't get a pension fund with AJ Bell.

I suspect that the majority of employer schemes have this rule - I think some employers use providers that allow partial transfers out but it's probably not the majority.

Best thing you can do unless you want to change jobs is to pick the PP fund that most closely correlates with the fund mix you are after.  Quite a few would suggest that if you are a long time (decades) from retirement, the charges you are paying probably matters more than tweaking your fund mix or trying to beat the market or whatever, and for sure as you have realized, the employer contributions you are getting will be a much bigger factor than slightly different fund choices.

If you are putting in a higher contribution than what your employer will match, your other option is to cut your pension contributions to whatever is matched by your employer, and then make a corresponding contribution to your SIPP from net salary which will then have the tax relief added back (if you are a higher rate taxpayer you can then claim back further relief in a tax return).

Tommyjw

Would you rather have your employer contribute a much lower amount because they would instead have to pay for the administration costs of amnually and individually catering to everyones requests to move funds, pay into a different provider etc? .

High level decisions that simplifies processes save the employer money which they otherwise wont try to save by reducing how much they contribute. 

ricster999

leosayer said:

I'm with you OP I find it frustrating that I'm stuck in the same way you describe, although for different reasons. Most DC pension schemes have a limited range of self-select funds.

Can I ask what fund you want to invest in that isn't available (at least in equivalent form) on the employer's scheme?

Have you approach your employer's compensation team or the trustees to complain?

Something like Fundsmith or Lindsell Train, PP have a very limited pool of funds - basically a few global trackers.
My next stop is my employers HR team to see if I can unsubscribe and then re-subscribe without losing a payment.
Annoying thing is PP allowed me to make a partial transfer about a year ago and have now (seemingly) changed policy...hence this thread.

ricster999

Pat38493 said:

ricster999 said:

Pat38493 said:

ricster999 said:

Well the answers seem to be consistent, which I find amazing.
I was a 'mortgage prisoner' a few years ago. I know appear to be a 'Pensions Prisoner'.
What a mess.

However you would probably lose x months of employer contributions while taking care of all this.
I would and it would be quite a significant amount

The other question here would be - how is your current PP pension invested?  What is the AJ Bell fund that you want to put it into?  Do you really believe that you can choose a better investment choice than whoever your employer engaged to do that?  Did an IFA advise you on this?
I want to transfer to a SIPP. I've managed it pretty well thus far and want to continue making my own investment decisions. Its not a specific AJ Bell fund btw.

How long is "thus far" in relation to the total amount of time until your intended retirement?

I don't think AJ Bell does employer pensions so even if you change employers you still wouldn't get a pension fund with AJ Bell.

I suspect that the majority of employer schemes have this rule - I think some employers use providers that allow partial transfers out but it's probably not the majority.

Best thing you can do unless you want to change jobs is to pick the PP fund that most closely correlates with the fund mix you are after.  Quite a few would suggest that if you are a long time (decades) from retirement, the charges you are paying probably matters more than tweaking your fund mix or trying to beat the market or whatever, and for sure as you have realized, the employer contributions you are getting will be a much bigger factor than slightly different fund choices.

If you are putting in a higher contribution than what your employer will match, your other option is to cut your pension contributions to whatever is matched by your employer, and then make a corresponding contribution to your SIPP from net salary which will then have the tax relief added back (if you are a higher rate taxpayer you can then claim back further relief in a tax return).

4-5 years
I have a SIPP with AJ Bell, thats where I'd be transferring to.
Other employee schemes I've been with have allowed partial transfers with out issue.
PP funds are useless. Literally about 6 - mostly global trackers or bonds/cash.
Yes, I could reduce my matched payments and invest in the SIPP directly - I prefer the 'salary sacrifice' approach as it makes my tax return easier to complete.

xylophone

You have a SIPP running alongside your workplace pension.

If you are particularly interested in a certain fund, why not just make a contribution to your SIPP and buy the fund, rather than mess  about with transfers out of your workplace pension?

ricster999

xylophone said:

You have a SIPP running alongside your workplace pension.

If you are particularly interested in a certain fund, why not just make a contribution to your SIPP and buy the fund, rather than mess  about with transfers out of your workplace pension?

Fair point. It complicates my tax return gathering all my contributions etc (my return is already quite hard work), so I generally prefer to contribute to my work pension via salary sacrifice. Also theres an element of paying the tax up front as I wont get the tax rebate til I've done my return a year or so later.
You're right, it is an option though.

Dazed_and_C0nfused

ricster999 said:

xylophone said:

You have a SIPP running alongside your workplace pension.

If you are particularly interested in a certain fund, why not just make a contribution to your SIPP and buy the fund, rather than mess  about with transfers out of your workplace pension?

Fair point. It complicates my tax return gathering all my contributions etc (my return is already quite hard work), so I generally prefer to contribute to my work pension via salary sacrifice. Also theres an element of paying the tax up front as I wont get the tax rebate til I've done my return a year or so later.
You're right, it is an option though.

You could get higher rate relief (on a provisional basis) via an increased tax code.

If you need to complete a Self Assessment return you would still have to include the RAS contributions but would have had some relief each month throughout the year.

Assuming your PAYE income is the major source of income of course.

Marcon

ricster999 said:

xylophone said:

You have a SIPP running alongside your workplace pension.

If you are particularly interested in a certain fund, why not just make a contribution to your SIPP and buy the fund, rather than mess  about with transfers out of your workplace pension?

Fair point. It complicates my tax return gathering all my contributions etc (my return is already quite hard work), so I generally prefer to contribute to my work pension via salary sacrifice. Also theres an element of paying the tax up front as I wont get the tax rebate til I've done my return a year or so later.
You're right, it is an option though.

Depends on the point at which you make the payment and when you submit your tax return. A contribution in March and a SA return submitted in May or June...that's nothing like a year's wait.

Albermarle

'm with you OP I find it frustrating that I'm stuck in the same way you describe, although for different reasons. Most DC pension schemes have a limited range of self-select funds.

There might be a limited range of funds, but the large majority of the customers will never change anything, or even be aware that they can, or if they were aware they could, they would have no knowledge of what to change to and why.

I was looking at the website of another auto enrolment pension provider recently and they said 99% of their customers were in the default fund . 

So commercially there is no incentive for these providers to offer a wider range, or offer partial transfers or whatever. They have a simple offering, with low charges, because that is what the market wants.

Dazed_and_C0nfused

Albermarle said:

'm with you OP I find it frustrating that I'm stuck in the same way you describe, although for different reasons. Most DC pension schemes have a limited range of self-select funds.

There might be a limited range of funds, but the large majority of the customers will never change anything, or even be aware that they can, or if they were aware they could, they would have no knowledge of what to change to and why.

I was looking at the website of another auto enrolment pension provider recently and they said 99% of their customers were in the default fund . 

So commercially there is no incentive for these providers to offer a wider range, or offer partial transfers or whatever. They have a simple offering, with low charges, because that is what the market wants.

Or maybe what the accepts rather than wants?