Small Pension with a GAR, why can't I transfer it myself?

ReflectionsinaFIAT

I' 55 and have have a Work DC Pension through L&G, I wanted to transfer my 3
other Pensions into it.
Simple right? Not really! I have transferred one Pension myself, the second is a DB with over £30k value so can't do that myself. I have a Small DC Pension with Royal London worth £14k.
Because it has a GAR, L&G are refusing to accept the Transfer without an IFA's advice.
Can they do this? 

Aretnap

Yes, a pension provider is allowed to set their own terms of business and, so if L&G's policy is not to accept transfers of pensions with protected benefits, even if they are worth less than £30K, then that's their choice to make. Ultimately they don't have to accept your money if they don't want to.

If you still want to transfer you could transfer it to a third provider first, and then to L&G, who at that point would not know that the money had once had a GAR - they would just see it as any other DC to DC pension transfer.

The only thing that might be slightly tricky would be finding a third provider willing to act as "middleman", however stakeholder pensions must accept any and all transfers so you could open a stakeholder and use it as the intermediary if necessary.

The fact that you can do it doesn't necessarily mean that you should, of course. A guaranteed annuity rate can be a valuable benefit not to be given up lightly, even if the size of the pension is fairly modest. How much is the GAR?

Marcon

ReflectionsinaFIAT said:

I' 55 and have have a Work DC Pension through L&G, I wanted to transfer my 3
other Pensions into it.
Simple right? Not really! I have transferred one Pension myself, the second is a DB with over £30k value so can't do that myself. I have a Small DC Pension with Royal London worth £14k.
Because it has a GAR, L&G are refusing to accept the Transfer without an IFA's advice.
Can they do this? 

They can - but you can still transfer it yourself.

 Aretnap said:

The only thing that might be slightly tricky would be finding a third provider willing to act as "middleman", however stakeholder pensions must accept any and all transfers so you could open a stakeholder and use it as the intermediary if necessary.

Nothing tricky about it. OP needs to open a stakeholder pension (which they can do for themselves - no adviser or other third party intervention needed), transfer to that and then on to the L&G scheme if that's what they want to do. Aviva and Standard Life are still open for new stakeholder business.

Aretnap said:

The fact that you can do it doesn't necessarily mean that you should, of course. A guaranteed annuity rate can be a valuable benefit not to be given up lightly, even if the size of the pension is fairly modest. How much is the GAR?

Indeed!

dunstonh

Can they do this? 

Yes they can.   They don't want to take liability for a transaction that is statistically unlikely to be suitable for you to do.

Albermarle

The OP will find that some other pension providers ( other than the two stakeholder pensions mentioned) will accept a pot with a GAR  if the value is less than £30K.
For example I just checked the pensions transfer factsheet of Fidelity and they are OK with this, as long as the client signs something that they understand what they are giving up.
For the record Fidelity will not accept DB transfers without a positive recommendation from a suitably qualified financial advisor, even if the value is below £30K .

OP - You could consider opening a SIPP/more modern pension and transferring the RL pension into that.
Then leave it there, and when you stop work transfer the L& G pension into that.
Normally modern SIPP providers have better IT systems/more flexibility/better customer service than some of the traditional providers.
Of course you would have to compare charges, what you want to invest in etc . It is just an idea.

ReflectionsinaFIAT

Thanks for replies, the Transfer Value is £14,600 with a GAR of £850 a year(£672 without GAR), so we are not talking Life Changing
amounts here. I would prefer to transfer this into my current Pension and invest it rather than getting approx a Month's salary per year in 2035.

LHW99

Presumably if you did get it transferred to Fidelity as Albermarle suggests is possible, L&G would accept a transfer on from there?

ReflectionsinaFIAT

Pension Bee any good for this?

ali_bear

If it was me I would take the guaranteed annuity. That plus your other DB pension plus the state pension rolling in each month for life. Not a bad thing to have. 

Albermarle

ReflectionsinaFIAT said:

Pension Bee any good for this?

I think you would need to check the small print of each provider.
Probably the fact that Fidelity will do it, I would assume that some other providers will do it, but no idea which ones. 

ReflectionsinaFIAT

Thanks everyone, I have wrote them a nice email explaining why I think they should accept my Transfer.
Let's see what comes back.