Confused about pension segments

chockydavid1983

I didn't end up doing it in the end but may in the future once my pot gets a bit bigger. From memory, I think it was a bit awkward in that Aviva wanted to know how many segments I wanted to transfer whereas Vanguard wanted a monetary value to transfer in. I'm sure there must be a way around it but I think I decided it was too much of a pain at the time for the amount it would have saved me in fees as Aviva's charges aren't *too* bad.

Copperpotz

I discovered i have this problem already where I only have 1 segment left. It seems pretty sneaky to me, as i had no idea what this segment system was previously.  When I initially saw a message about having 1 segment left, i just assuming it related to the number of shares i had left.  

It sucks as I would like to have the flexibility in managing my own pension and a cheaper cost. Would be interesting to know if anyone else has found themselves in this position and whether they did anything about it.

tannoy_2

I just spoke to Aviva about this. They sent me the following workaround via email:

When your pension was set up, it was divided into a number of segments. The funds invested are split across these segments. Each segment has a value. To perform a partial transfer, we surrender the relevant number of segments to meet the transfer amount.

In order to keep the pension in force, it needs to have at least one segment remaining. If the number of segments decreases to one, no further partial transfers, as described above, can be made.

However, we have a workaround that allows us to make a monetary partial transfer from the one remaining segment.

This monetary transfer will show as a 'settlement' on future annual statements. This could cause you or anyone you pass that information to, for example HMRC, to think there had been a settlement on your policy. A settlement on a policy can affect tax positions, or how much you can contribute to your pensions in future.

As long as this is understood that the ‘settlement’ was a partial transfer there should be no tax or contribution issues. We will keep records of this transaction on our systems for any future enquiries.

If you wish to proceed in this manner should you have just one segment remaining, please confirm you understand that a workaround will be used, and it will show on future statements as a settlement. If HMRC raises any concerns about the ‘settlement’, it is your responsibility to explain that it is a transfer to a registered pension scheme.

Kind Regards

tannoy_2

The person I spoke to referred to the "Partial Transfers" team. I assume I'd need to speak to them before initiating a Partial Transfer Out Request from my SIPP provider.

In case it's useful for anyone:

The current annual charge for my Aviva Workplace pension is 0.38%. They say "We calculate charges as a percentage of your fund and deduct them each month." And "The charge(s) above do not cover any charges associated with your investment funds. Each fund may have its own individual charge and potentially an additional expense."

The pension product name is "Designer Pension @ Aviva".