Consolidation of DC Pension Pots

Tumlow

I recently transferred a DC pension fund from one provider to another in order to consolidate my pensions and make them easier to manage. The transfer was between two major providers who use the electronic Origo system to perform the transfer. The transfer took 8 days from the time the initial fund was closed to the time that funds were placed with the new provider. During this time, the original pension fund had increased by over £5,000 but because my money was out of the market during this period I lost out. I cannot believe this is an acceptable way to deal with client money and would be pleased to hear from anyone else who has experienced a similar situation.

eskbanker

That doesn't sound like an unusual time to transfer, did either provider state or imply that it would be any quicker than that?

singhini

£5,000 doesn't give us the full picture, can you provide a bit more info like the name of the fund you transferred, the value transferred, the date when it was transferred and the names of the two providers please.

Could you have done a stock transfer?

As eskbanker mentioned, 8 days doesn't sound like an unusual time to transfer

£5,000 might be insignificant if the pot is sizeable or £5,000 might be an astronomical amount (hence my questions above like knowing the name of the fund)

Hoenir

Tumlow said:

I cannot believe this is an acceptable way to deal with client money and would be pleased to hear from anyone else who has experienced a similar situation.

Here's a link to Origo's latest statistics. 

https://origo.com/assets/components/hero/Origo-Transfer-Index-1-October-2023-to-30-September-2024.pdf

Transfer times have progressively improved over time.  

Alexland

Random short term market movements are basically the risk you take when doing a cash transfer which is why it's best done as infrequently as possible and only when there is good reason and ideally to a provider that offers a range of standard funds that can be in specie asset transferred elsewhere in future with no time uninvested.

bolwin1

That's pretty normal, and quicker than average. A quick google shows the average for a cash transfer for a pension via Origo is around 13 days (or at least was in 2023). You could have transferred the funds in-specie if you were worried about time out of the market. What expectations were set before you transferred as you would have been given an indication re how long this should take ?

Would you have complained if the market had gone down & you had saved £5,000 ? 

Alexland

bolwin1 said:

You could have transferred the funds in-specie if you were worried about time out of the market.

Depends if both providers have the same investment option(s).

MetaPhysical

Swings and roundabouts.   Look at it another way, the market could have crashed during that time too whilst in-transfer and you were out of the market, and you'd have been in cash and protected from it (assuming the transfer wasn't in-specie).

dunstonh

I cannot believe this is an acceptable way to deal with client money and would be pleased to hear from anyone else who has experienced a similar situation.

It is absolutely acceptable.    

a) if you select cash transfer you agree that the units will be sold to cash and that you will be out of the market until the new provider receives cleared funds and invests in the new assets per your instruction.  No point moaning about it afterwards.
b) if you select in-specie transfer, you are not out of the market as the funds/assets you have are re-registered.
c) if you are out of the market, then you neither get gains or losses as you are not in the market.  

They followed your instructions.  Perhaps you didn't understand your instructions?