Active workplace pension transfer

Altior

I would like to transfer the value of funds of my current workplace scheme over to my SIPP, to benefit from both lower fees and enhanced platform options (eg ETFs).

The key here is that I don't want to close the donor scheme. My employer will only contribute to the firm's official provider (RL), I use SS. So I want to clear out the value of funds to another provider, but have my contributions continue as normal, ie starting from zero again. 

The platform fees are quite high, 0.5% for RL funds (including a discount of 0.5%), and non RL funds are not discounted, so these are between 1% and 2%.

I had always assumed it wasn't possible, however I heard an industry professional on a podcast intimate that this was possible to transfer funds from an active employer workplace scheme into a scheme of my selection, ie one of my SIPPs. The question is, is it ?

molerat

It all depends on the scheme / provider.  You need to ask them.

Altior

Thanks, I just wanted to identify from here if it was technically possible. If it is then I can engage with RL support. In my mind I had always assumed it was along the lines of a current bank account switch and the donor account is automatically closed. That's actually what happened when I transferred a tiny pot into this RL scheme.

Albermarle

Altior said:

Thanks, I just wanted to identify from here if it was technically possible. If it is then I can engage with RL support. In my mind I had always assumed it was along the lines of a current bank account switch and the donor account is automatically closed. That's actually what happened when I transferred a tiny pot into this RL scheme.

Even if it is possible with RL, I would personally probably avoid clearing out the funds, just in case the above happened. I would always leave some behind to be on the safe side .

Marcon

Altior said:

Thanks, I just wanted to identify from here if it was technically possible. If it is then I can engage with RL support. In my mind I had always assumed it was along the lines of a current bank account switch and the donor account is automatically closed. That's actually what happened when I transferred a tiny pot into this RL scheme.

It depends entirely on the rules of the scheme/your terms of employment. What might be 'technically possible' in one scheme might not be possible in another, so the starting point is always going to be reading the terms of your workplace scheme and your terms of employment.

Altior

Cheers, that's a good idea.  

Altior

Marcon said:

Altior said:

Thanks, I just wanted to identify from here if it was technically possible. If it is then I can engage with RL support. In my mind I had always assumed it was along the lines of a current bank account switch and the donor account is automatically closed. That's actually what happened when I transferred a tiny pot into this RL scheme.

It depends entirely on the rules of the scheme/your terms of employment. What might be 'technically possible' in one scheme might not be possible in another, so the starting point is always going to be reading the terms of your workplace scheme and your terms of employment.

Nothing is discussed in terms of transfers out, only in. Generic RL info (below) seems inconclusive. I will call them at a later date.

Lorian

You need to be asking them if they allow 'partial transfers' out and if so what is the minimum value that need to be left to keep the pension open to continue to be payed onto.

HappyHarry

^^^

This. Many workplace pensions allow partial transfers out, which is what you require. Some do not - which means you would need to speak to your employer about closing your current plan in order to transfer it and reopening a new plan. Not all employers will agree to this so make sure you check beforehand.

dunstonh

The platform fees are quite high, 0.5% for RL funds (including a discount of 0.5%), and non RL funds are not discounted, so these are between 1% and 2%.

0.5% is not high as it includes the provider charge and the fund charge. Plus, RL rebate some each year as they are a mutual.   About 0.15% is typical.   

RL funds are normally 1%.  So, if you are getting 0.5% discount, then that discount will normally apply to external funds as well (it does on the individual scheme).

Bostonerimus1

Altior said:

I would like to transfer the value of funds of my current workplace scheme over to my SIPP, to benefit from both lower fees and enhanced platform options (eg ETFs).

The key here is that I don't want to close the donor scheme. My employer will only contribute to the firm's official provider (RL), I use SS. So I want to clear out the value of funds to another provider, but have my contributions continue as normal, ie starting from zero again. 

The platform fees are quite high, 0.5% for RL funds (including a discount of 0.5%), and non RL funds are not discounted, so these are between 1% and 2%.

I had always assumed it wasn't possible, however I heard an industry professional on a podcast intimate that this was possible to transfer funds from an active employer workplace scheme into a scheme of my selection, ie one of my SIPPs. The question is, is it ?

I'm sure RL gives you a perfectly adequate selection of investment options. The fetish for having access to "the world of funds" is way over played. I've been with Vanguard for 30 years and have never needed to look outside their offerings. But if you can save on fees then a move might be warranted, but make sure you understand all the fees and also factor in the bother.