Alpha transfer in Qs

alibean121

I've recently accepted a new job in the civil service and am awaiting completion of joining checks and confirmation of a start date. I have just shy of £90k of private DC pensions that I'm pretty clear I want to transfer into alpha.

I'm 35 and I think I'll be offered around £8.5k of additional pension for this. I have 3 questions:

1. Selling investments
Would it be wise to sell my investments now so my pension value isn't moving around? It's 100% equity invested at the moment but I'm not clear what would happen with the movement in value while the request is in progress. I'm satisfied with the current value - it's fair and reflects good returns on the contributions and obviously will buy a good chunk of pension.

2. Transfer caps
I think for transfer in, I'm limited to 50% of my salary. I am interpreting this correctly that they mean the £8.6k can't be over 50% of salary, not the £90k?

3. Future added pension
I'm interested in further building my alpha pension. I want to check that my transfer-in isn't taking up any of my £9k added pension cap? Do I still have this full value available? I'm aware that this would take another £100k or more to purchase (as I will be getting older before that's affordable...) but I could fill £500 pretty easily.

I know there's a lot of very knowledgeable people about these pensions on the forum and any thoughts or comments appreciated. I don't particularly see a long civil service career in my future and I'm keen to get a good chunk of guaranteed, index linked pension into the pot where I have the opportunity. I'm aiming to retire at 60 and think I can rebuild a DC pot in the future to bridge the gap for that. 

hugheskevi

alibean121 said:

1. Selling investments
Would it be wise to sell my investments now so my pension value isn't moving around? It's 100% equity invested at the moment but I'm not clear what would happen with the movement in value while the request is in progress. I'm satisfied with the current value - it's fair and reflects good returns on the contributions and obviously will buy a good chunk of pension.

The value of alpha purchased will be based on the amount of funds received when they are transferred, so you are subject to market risk until that point. Be aware the transfer will probably take a very long time (ie months rather than weeks) so you would be out of the market for a long time.

alibean121 said:

2. Transfer caps
I think for transfer in, I'm limited to 50% of my salary. I am interpreting this correctly that they mean the £8.6k can't be over 50% of salary, not the £90k?

Correct

alibean121 said:

3. Future added pension
I'm interested in further building my alpha pension. I want to check that my transfer-in isn't taking up any of my £9k added pension cap? Do I still have this full value available? 

The transfer is separate to Added Pension and EPA cap so the full cap would still be available.

player1_2

hugheskevi said:

alibean121 said:

1. Selling investments
Would it be wise to sell my investments now so my pension value isn't moving around? It's 100% equity invested at the moment but I'm not clear what would happen with the movement in value while the request is in progress. I'm satisfied with the current value - it's fair and reflects good returns on the contributions and obviously will buy a good chunk of pension.

The value of alpha purchased will be based on the amount of funds received when they are transferred, so you are subject to market risk until that point. Be aware the transfer will probably take a very long time (ie months rather than weeks) so you would be out of the market for a long time.

However, given interest rates are still reasonably high, the funds could be invested in a short term money market fund until the transfer takes place. This would remove the uncertainty of market fluctuations and offer modest growth. 

Congratulations on your CS job offer. After a long career in the private sector, I have found the CS to be a great place to work - and Alpha is a top drawer pension scheme.

2nd_time_buyer

It is quite tempting to do a bit of Civil service just for cheap annuities!

westv

player1_2 said:

Congratulations on your CS job offer. After a long career in the private sector, I have found the CS to be a great place to work - and Alpha is a top drawer pension scheme.

On the other hand my wife has been in the CS for 36 years and is looking forward to leaving whenever that may be.  
   

player1_2

westv said:

player1_2 said:

Congratulations on your CS job offer. After a long career in the private sector, I have found the CS to be a great place to work - and Alpha is a top drawer pension scheme.

On the other hand my wife has been in the CS for 36 years and is looking forward to leaving whenever that may be.  
   

I guess, as they say, YMMV 

2nd_time_buyer

... to save you looking it up "your mileage may vary"

alibean121

Thanks so much, that’s clear. I guess it seems a bit mad to remain invested like that when I know the whole fund is to be sold at a point in time. I’m happy with the current value and selling into a money market fund isn’t the worst idea.

I’ve always been pretty relaxed about the investments, I won’t care or more likely even know if the market goes up 20% and I’m not invested. Feels more like just gambling than anything else.