Transferring an old pension

Onestepcloser

I've located an old pension from 20 odd years ago.  It isnt much about 12k and don't think it is going to grow much more if it's even growing at all where it is, so would prefer if it were in my work place pension or my SIPP that I've recently just opened.

The company that is holding it is saying there is a reduced transfer fee of almost 4k. How can they justify that? Is there anyway to avoid or minimise it?

Not sure if it's better in my workplace pension or my SIPP?  Any benefit in one over the other?

xylophone

 It isnt much about 12k 

there is a reduced transfer fee of almost 4k.

Good grief!  More or less 33% of the transfer value?

What would unreduced be 50% ? More?

What kind of pension is this?!

dunstonh

20 years ago would put it 3 years after stakeholder pensions were introduced.  from about 1998 to a few years after their introduction, pensions really had to be stakeholder or stakeholder friendly.   Its unlikely to be capital and accumulation units on a 20 year old plan.  There were some personal pensions that paid a big incentive up front but if you transferred away from them before the scheme age, they would claw that bonus back.     It could also be an MVR.

The company that is holding it is saying there is a reduced transfer fee of almost 4k. How can they justify that? Is there anyway to avoid or minimise it?

Without knowing what it is, it's difficult to say.

Not sure if it's better in my workplace pension or my SIPP?  Any benefit in one over the other?

Effectively, your options are 
a) keep it where it is
b) transfer it to a stakeholder pension
c) transfer it to a personal pension
d) transfer it to a SIPP
e) transfer it to your workplace pension.

Any of those could be viable depending on the details.

Onestepcloser

dunstonh said:

20 years ago would put it 3 years after stakeholder pensions were introduced.  from about 1998 to a few years after their introduction, pensions really had to be stakeholder or stakeholder friendly.   Its unlikely to be capital and accumulation units on a 20 year old plan.  There were some personal pensions that paid a big incentive up front but if you transferred away from them before the scheme age, they would claw that bonus back.     It could also be an MVR.

The company that is holding it is saying there is a reduced transfer fee of almost 4k. How can they justify that? Is there anyway to avoid or minimise it?

Without knowing what it is, it's difficult to say.

Not sure if it's better in my workplace pension or my SIPP?  Any benefit in one over the other?

Effectively, your options are 
a) keep it where it is
b) transfer it to a stakeholder pension
c) transfer it to a personal pension
d) transfer it to a SIPP
e) transfer it to your workplace pension.

Any of those could be viable depending on the details.

"Without knowing what it is, it's difficult to say."

I believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.

I'm thinking of moving it regardless of the feeling as it doesn't seem to be growing where it is. 
 
Would there be any benefit choosing my workplace (larger pot) versus my SIPP (small pot).

Onestepcloser

xylophone said:

 It isnt much about 12k 

there is a reduced transfer fee of almost 4k.

Good grief!  More or less 33% of the transfer value?

What would unreduced be 50% ? More?

What kind of pension is this?!

It really is horrific.  It used to a good pension back then if I remember correctly providing you stayed in it.  What's worse it doesn't seem to growing much if any at all.

Marcon

Onestepcloser said:

dunstonh said:

20 years ago would put it 3 years after stakeholder pensions were introduced.  from about 1998 to a few years after their introduction, pensions really had to be stakeholder or stakeholder friendly.   Its unlikely to be capital and accumulation units on a 20 year old plan.  There were some personal pensions that paid a big incentive up front but if you transferred away from them before the scheme age, they would claw that bonus back.     It could also be an MVR.

The company that is holding it is saying there is a reduced transfer fee of almost 4k. How can they justify that? Is there anyway to avoid or minimise it?

Without knowing what it is, it's difficult to say.

Not sure if it's better in my workplace pension or my SIPP?  Any benefit in one over the other?

Effectively, your options are 
a) keep it where it is
b) transfer it to a stakeholder pension
c) transfer it to a personal pension
d) transfer it to a SIPP
e) transfer it to your workplace pension.

Any of those could be viable depending on the details.

"Without knowing what it is, it's difficult to say."

I believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.

I'm thinking of moving it regardless of the feeling as it doesn't seem to be growing where it is. 
 
Would there be any benefit choosing my workplace (larger pot) versus my SIPP (small pot).

This sounds as if it could be an underfunded defined benefit scheme. 

If that's what it proves to be, then the letter should tell you when the trustees hope to be in a position to return to fully funded transfers. 

Onestepcloser said:

xylophone said:

 It isnt much about 12k 

there is a reduced transfer fee of almost 4k.

Good grief!  More or less 33% of the transfer value?

What would unreduced be 50% ? More?

What kind of pension is this?!

It really is horrific.  It used to a good pension back then if I remember correctly providing you stayed in it.  What's worse it doesn't seem to growing much if any at all.

If the pension dates from only 20 years ago, then you will have stopped being an 'active' (contributing) member at a time when when a mandatory requirement had been introduced to revalue between the time you left and the time you access your benefits from that scheme. 

It's essential you check your facts (and find the missing letter!) before doing anything - transferring could be a seriously bad move.

dunstonh

I believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.

That would suggest it is not a personal pension but something else. Can you confirm the actual pension type?

Would there be any benefit choosing my workplace (larger pot) versus my SIPP (small pot).

Without knowing the details or either option, its difficult to say.   However, that may be jumping the gun.  There is something unusual about your existing plan which needs understanding first.   

Onestepcloser

Marcon said:

Onestepcloser said:

dunstonh said:

20 years ago would put it 3 years after stakeholder pensions were introduced.  from about 1998 to a few years after their introduction, pensions really had to be stakeholder or stakeholder friendly.   Its unlikely to be capital and accumulation units on a 20 year old plan.  There were some personal pensions that paid a big incentive up front but if you transferred away from them before the scheme age, they would claw that bonus back.     It could also be an MVR.

The company that is holding it is saying there is a reduced transfer fee of almost 4k. How can they justify that? Is there anyway to avoid or minimise it?

Without knowing what it is, it's difficult to say.

Not sure if it's better in my workplace pension or my SIPP?  Any benefit in one over the other?

Effectively, your options are 
a) keep it where it is
b) transfer it to a stakeholder pension
c) transfer it to a personal pension
d) transfer it to a SIPP
e) transfer it to your workplace pension.

Any of those could be viable depending on the details.

"Without knowing what it is, it's difficult to say."

I believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.

I'm thinking of moving it regardless of the feeling as it doesn't seem to be growing where it is. 
 
Would there be any benefit choosing my workplace (larger pot) versus my SIPP (small pot).

This sounds as if it could be an underfunded defined benefit scheme. 

If that's what it proves to be, then the letter should tell you when the trustees hope to be in a position to return to fully funded transfers. 

Onestepcloser said:

xylophone said:

 It isnt much about 12k 

there is a reduced transfer fee of almost 4k.

Good grief!  More or less 33% of the transfer value?

What would unreduced be 50% ? More?

What kind of pension is this?!

It really is horrific.  It used to a good pension back then if I remember correctly providing you stayed in it.  What's worse it doesn't seem to growing much if any at all.

If the pension dates from only 20 years ago, then you will have stopped being an 'active' (contributing) member at a time when when a mandatory requirement had been introduced to revalue between the time you left and the time you access your benefits from that scheme. 

It's essential you check your facts (and find the missing letter!) before doing anything - transferring could be a seriously bad move.

You may be right with the defined pension as it said a yearly payment of £700 odd.  Will have a look for the letter and see if its worth keeping

Marcon

Onestepcloser said:

Marcon said:

Onestepcloser said:

dunstonh said:

20 years ago would put it 3 years after stakeholder pensions were introduced.  from about 1998 to a few years after their introduction, pensions really had to be stakeholder or stakeholder friendly.   Its unlikely to be capital and accumulation units on a 20 year old plan.  There were some personal pensions that paid a big incentive up front but if you transferred away from them before the scheme age, they would claw that bonus back.     It could also be an MVR.

The company that is holding it is saying there is a reduced transfer fee of almost 4k. How can they justify that? Is there anyway to avoid or minimise it?

Without knowing what it is, it's difficult to say.

Not sure if it's better in my workplace pension or my SIPP?  Any benefit in one over the other?

Effectively, your options are 
a) keep it where it is
b) transfer it to a stakeholder pension
c) transfer it to a personal pension
d) transfer it to a SIPP
e) transfer it to your workplace pension.

Any of those could be viable depending on the details.

"Without knowing what it is, it's difficult to say."

I believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.

I'm thinking of moving it regardless of the feeling as it doesn't seem to be growing where it is. 
 
Would there be any benefit choosing my workplace (larger pot) versus my SIPP (small pot).

This sounds as if it could be an underfunded defined benefit scheme. 

If that's what it proves to be, then the letter should tell you when the trustees hope to be in a position to return to fully funded transfers. 

Onestepcloser said:

xylophone said:

 It isnt much about 12k 

there is a reduced transfer fee of almost 4k.

Good grief!  More or less 33% of the transfer value?

What would unreduced be 50% ? More?

What kind of pension is this?!

It really is horrific.  It used to a good pension back then if I remember correctly providing you stayed in it.  What's worse it doesn't seem to growing much if any at all.

If the pension dates from only 20 years ago, then you will have stopped being an 'active' (contributing) member at a time when when a mandatory requirement had been introduced to revalue between the time you left and the time you access your benefits from that scheme. 

It's essential you check your facts (and find the missing letter!) before doing anything - transferring could be a seriously bad move.

You may be right with the defined pension as it said a yearly payment of £700 odd.  Will have a look for the letter and see if its worth keeping

Is that £700 a year the figure quoted at the time you left active membership, without any allowance for 'revaluation in deferment' (ie annual uprating as required by legislation/the rules of the scheme)? If so, it could be worth a lot more by the time you get to the point of taking your benefits from the scheme.

Onestepcloser

Marcon said:

Onestepcloser said:

Marcon said:

Onestepcloser said:

dunstonh said:

20 years ago would put it 3 years after stakeholder pensions were introduced.  from about 1998 to a few years after their introduction, pensions really had to be stakeholder or stakeholder friendly.   Its unlikely to be capital and accumulation units on a 20 year old plan.  There were some personal pensions that paid a big incentive up front but if you transferred away from them before the scheme age, they would claw that bonus back.     It could also be an MVR.

The company that is holding it is saying there is a reduced transfer fee of almost 4k. How can they justify that? Is there anyway to avoid or minimise it?

Without knowing what it is, it's difficult to say.

Not sure if it's better in my workplace pension or my SIPP?  Any benefit in one over the other?

Effectively, your options are 
a) keep it where it is
b) transfer it to a stakeholder pension
c) transfer it to a personal pension
d) transfer it to a SIPP
e) transfer it to your workplace pension.

Any of those could be viable depending on the details.

"Without knowing what it is, it's difficult to say."

I believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.

I'm thinking of moving it regardless of the feeling as it doesn't seem to be growing where it is. 
 
Would there be any benefit choosing my workplace (larger pot) versus my SIPP (small pot).

This sounds as if it could be an underfunded defined benefit scheme. 

If that's what it proves to be, then the letter should tell you when the trustees hope to be in a position to return to fully funded transfers. 

Onestepcloser said:

xylophone said:

 It isnt much about 12k 

there is a reduced transfer fee of almost 4k.

Good grief!  More or less 33% of the transfer value?

What would unreduced be 50% ? More?

What kind of pension is this?!

It really is horrific.  It used to a good pension back then if I remember correctly providing you stayed in it.  What's worse it doesn't seem to growing much if any at all.

If the pension dates from only 20 years ago, then you will have stopped being an 'active' (contributing) member at a time when when a mandatory requirement had been introduced to revalue between the time you left and the time you access your benefits from that scheme. 

It's essential you check your facts (and find the missing letter!) before doing anything - transferring could be a seriously bad move.

You may be right with the defined pension as it said a yearly payment of £700 odd.  Will have a look for the letter and see if its worth keeping

Is that £700 a year the figure quoted at the time you left active membership, without any allowance for 'revaluation in deferment' (ie annual uprating as required by legislation/the rules of the scheme)? If so, it could be worth a lot more by the time you get to the point of taking your benefits from the scheme.

I'm not sure, I've asked them to send me the details of the pension again, they did confirm it was a DB pension

xylophone

 It used to a good pension back then if I remember correctly providing you stayed in it

I believe it's to do with not enough in the overall trust to cover transfers should everyone do it, or something like that, I would need to find the original letter.

Check!

As other posters have indicated, it does sound as though you have a deferred Defined Benefit pension.

If so, it should be revaluing in deferment.

Do you have a scheme guide or is the guide available on the internet?

When exactly were you a member of the scheme?

https://www.barnett-waddingham.co.uk/comment-insight/blog/revaluation-for-early-leavers/ may be worth a read  but you should check 

the scheme guide/ the letter you have received.