Standard Life DC transfer?

Kinclad

Hi there,

I hope i may get some guidance on weather its a good idea to transfer my legacy DC SL pension to my current employers DC pension (Scottish Widows).

Im aware there is no definitive yes or no answer to this and I understand that an important part of this decision is based upon the investments funds. But with this SL pension being a with profits, i must admit i don't have a firm understanding of the benefits i could lose if i transfer and also if its performing reasonably.

The info i have on the SL pension is..

Pension Millennium With Profits Fund - 12.8% - £17,185.44
Pension With Profits Fund - 7.67% - £10,814.89 (it now says this is closed?)
Standard Life Managed Pension Fund 80.15% - £113,059.66

Total plan value - £141,059.99
Final Bonus - £14,373.88
Current transfer value - £155,433.87

You're currently invested in a lifestyle profile

What concerned me is that the total value plan has gone up just 10K in the last 5 years, i'm aware i'm not contributing to this anymore, but should i be disappointed (and concerned) with that level of growth? Is this because profits are held back and i would get some sort of bumper bonus on the maturity of the pension when im 65?

I guess i don't want to look back on this in 10 years time and think, why didn't i do something (ie change the investment plans or transfer to my current DC).

I'm paying 0.467% in charges each year.

Any thoughts would be appreciated.

I'm 53 and intend to work until i'm least 63.

Thanks,

Mark.

dunstonh

What concerned me is that the total value plan has gone up just 10K in the last 5 years, i'm aware i'm not contributing to this anymore, but should i be disappointed (and concerned) with that level of growth? Is this because profits are held back and i would get some sort of bumper bonus on the maturity of the pension when im 65?

2018 was a negative year. 2020 had a major drop in Spring. 2022 was a negative year.   Its been a poor 5 years for investing.

The WP fund has a guaranteed growth rate on it.  That makes it a very attractive low risk segment of your fund.  The millenium fund doesn't have a guaranteed growth rate but the unit price cannot go down.  So, again, its a safe element to your fund.  This allows you to go higher into equities for the rest of it.

Kinclad

Thanks for your response Dunstonh, 

I guess I'm still a bit concerned that although it has some of these guarantees, is this type of scheme (by its nature) then adverse to a degree of speculative  growth?

The WP element in the scheme of things is relatively small ammount of money, so even though there is a guarantee, it's going to minimal in terms of actual returns. 

And with regards to the 10k growth over the last 5 years (which I belive is around 7%). Would that be considered to be a reasonable average in the marketplace?

I know there are bad years when pensions can lose money, but I must admit I thought looking at it over a longer period it would look slightly better than what I'm seeing. 

But like you say, it's been a bad 5 years, I hope we have a lt least a reasonable next 10 🤞

And I guess the other reason Im thinking should I transfer is that I've just checked the plan that my work DC pension is in with scottish widows and over that same 5 year period it has risen by 19.2%.

Pension Portfolio Three CS7 Pn

Linton

Kinclad said:

Thanks for your response Dunstonh, 

I guess I'm still a bit concerned that although it has some of these guarantees, is this type of scheme (by its nature) then adverse to a degree of speculative  growth?

The WP element in the scheme of things is relatively small ammount of money, so even though there is a guarantee, it's going to minimal in terms of actual returns. 

And with regards to the 10k growth over the last 5 years (which I belive is around 7%). Would that be considered to be a reasonable average in the marketplace?

I know there are bad years when pensions can lose money, but I must admit I thought looking at it over a longer period it would look slightly better than what I'm seeing. 

But like you say, it's been a bad 5 years, I hope we have a lt least a reasonable next 10 🤞

Yes, a WP fund deliberately evens out the returns.  So no speculative growth and no large crashes.  But you would reasonably hope to have a final bonus since money no longer needs to be held back.

Also the lifestyle profile on the SL pension means that around now it could be moved into safer investments to prepare for your retirement.  If you are looking for speculative growth you should change the profile.

Kinclad

Thanks Linton, all useful info for me. Since your post I added some extra content. (as below). Would be interested in your thoughts on that, I guess this is one of the reasons why I feel is should be transfering it to SW. Thanks

'And I guess the other reason Im thinking should I transfer is that I've just checked the plan that my work DC pension is in with scottish widows and over that same 5 year period it has risen by 19.2%.' 

Pension Portfolio Three CS7 Pn

Albermarle

The obvious question is why not just change your investments within Standard Life. As you already said it is the investments that matter, the provider of the pension is less important.
So by comparing your investments performance in SL with those in SW, you are not comparing like with like, as they are different types.