Changing pension provider and company contribution

chrisg888

Hi,

I was thinking about changing my pension provider as I wanted to move my pension along with my ISA and other savings to the same company. I planning on opening a SIPP to do this.

I asked the company I work for and they say they will only provide company contributions to the pension provider they've selected.

Is this normal and allowed? It seems a little unreasonable to me.

Chris

gravel_2

Both normal and reasonable.

artyboy

gravel_2 said:

Both normal and reasonable.

And allowed 

OP - you might be able to do a partial transfer out into your new SIPP, but why would an employer want the hassle of having to administer payments to potentially hundreds of different schemes on the whim of its employees. Ain't going to happen...

dunstonh

I asked the company I work for and they say they will only provide company contributions to the pension provider they've selected.

Is this normal and allowed? It seems a little unreasonable to me.

It is normal, allowed and reasonable.

Your SIPP provider will not accept auto-enrolment contributions and does not have the software to integrate with payroll systems.

If your employer has, say, 10,000 employees, can you imagine the administration having to handle individual plans?

Maybe tell them you are willing to take a pay cut every month.  Say £250-£500pm reduction to cover the admin.  

chrisg888

Ok, I didn’t realise the complexities. They manage payments to different accounts for wages. I assumed it was just the case of an account number change.

dunstonh

hey manage payments to different accounts for wages. I assumed it was just the case of an account number change.

Auto-enrolment schemes will take all the data straight off the payroll system into the pension provider.  The employer then makes a single direct debit payment to the auto-enrolment scheme.

10,000 employees using individual plans would be 10,000 direct debits.
Most individual pensions require an employer payer form every time the amount changes.  So, that is 10,000 forms per month.   Employers cannot input details into individual schemes.  So, they would need each employee to input it.  Individual schemes are not auto-enrolment compliant.  So, each employee would need to opt out.  However, many individual pension providers will not accept opt-outs without an adviser taking liability.

Marcon

dunstonh said:

hey manage payments to different accounts for wages. I assumed it was just the case of an account number change.

Auto-enrolment schemes will take all the data straight off the payroll system into the pension provider.  The employer then makes a single direct debit payment to the auto-enrolment scheme.

10,000 employees using individual plans would be 10,000 direct debits.
Most individual pensions require an employer payer form every time the amount changes.  So, that is 10,000 forms per month.   Employers cannot input details into individual schemes.  So, they would need each employee to input it.  Individual schemes are not auto-enrolment compliant.  So, each employee would need to opt out.  However, many individual pension providers will not accept opt-outs without an adviser taking liability.

OP - if you want a further insight into why it simply isn't viable for employers to pay to each employee's choice of pension provider (a totally barmy idea mooted by the current government, who simply don't have a clue), see https://forums.moneysavingexpert.com/discussion/6526687/no-tax-relief-on-my-current-pension#latest and look at the tangle created there!