9 Month Pension Transfer - Inaction and Loss of Investment Growth?

nb_bob

My daughter left a council job at the end of December 2024. She got a letter on the 9th January stating her pension transfer value was just under £12,000. She signed forms on the 17th March 2025 stating that she wanted to transfer it to a private SIPP. It has only just been transferred and the value is the same as the January 9th figure. To add to this she got a letter last month from her old council asking her what she wants to do with her pension. It's as if they had forgotten about it.

I'm thinking they have failed in their duties of transferring the pension in a reasonable time which, I think, has resulted in a loss of investment growth.

Thoughts? Suggested actions?

Isthisforreal99

What do you think a reasonable time scale is? Could have been delays at either side.

How do you know there would have been any growth, could have been the opposite.

dunstonh

The receiving scheme controls the transfer process.   The ceding scheme reacts to the forms that the receiving scheme sends to it.

When did she apply to the receiving scheme to do the transfer?

nb_bob

Isthisforreal99 said:

What do you think a reasonable time scale is? Could have been delays at either side.

How do you know there would have been any growth, could have been the opposite.

According to Google:

"The average time to transfer a pension is typically between 
two to six weeks, but can vary significantly from a few days to several months. Factors like whether the transfer is electronic (faster) or paper-based (slower), the complexity of the pension, and the efficiency of the providers involved all play a role."

The fact that she got a letter at the end of November asking her what she wants to do with her pension indicates, to me, that their admin had neglected the transfer documentation. She sent an 'Oi! where's my pension, this is taking too long, I asked you to transfer it' email last week asking for an update and suddenly the transfer has happened.

Regarding the growth; I gave money to both of my daughters last December to set up SIPPs with the same SIPP provider I use and we have the same investment funds which have gone up. If the transfer had gone through by the 1st of July, the funds would have gone up by:

Fund 1 - July to December +12.1%
Fund 2 - July to December +14.3%
Fund 3 - July to December +23.8%

nb_bob

dunstonh said:

The receiving scheme controls the transfer process.   The ceding scheme reacts to the forms that the receiving scheme sends to it.

When did she apply to the receiving scheme to do the transfer?

It was in March that she started the transfer to the SIPP. I think she has had regular contact with the SIPP provider and they have been waiting for correspondence from the council. 

NoMore

If it was from the council then is this  not a db transfer not a dc to dc transfer and as such it would be down  to cetv not anything to do with investment growth. 

DRS1

NoMore said:

If it was from the council then is this  not a db transfer not a dc to dc transfer and as such it would be down  to cetv not anything to do with investment growth. 

I think the OP has in mind that if the transfer value had arrived in the SIPP earlier in the year it would have had investment growth from then on.

Secret2ndAccount

I'm not seeing much sympathy here for the OP's situation. I understand that the ceding scheme will want to make some checks before handing over large sums of money. But how long do we think is too long? What if the wait had been 5 years? Do we just say "It's a CETV. You get what you get when you get it".
Perhaps interest should start to accrue 14 days after a valid request is received. Maybe the ceding scheme should be required to calculate a new CETV just before they complete the transfer, and pay the new value if it is higher.
At the moment, I see no incentive for the ceding sheme to complete the transfer at all. If I'm sending you money, I would prefer the money to be in my account, not yours.

Marcon

Secret2ndAccount said:

I'm not seeing much sympathy here for the OP's situation. I understand that the ceding scheme will want to make some checks before handing over large sums of money. But how long do we think is too long? What if the wait had been 5 years? Do we just say "It's a CETV. You get what you get when you get it".
Perhaps interest should start to accrue 14 days after a valid request is received. Maybe the ceding scheme should be required to calculate a new CETV just before they complete the transfer, and pay the new value if it is higher.
At the moment, I see no incentive for the ceding sheme to complete the transfer at all. If I'm sending you money, I would prefer the money to be in my account, not yours.

What 'we' think or 'we' say is irrelevant. Answers to this sort of question need to be based on facts, not emotion (however much sympathy there might be for the person posting!).

There are statutory timeframes where a member has a statutory right to a CETV. The member has 3 months from the date of calculation to accept the transfer and provide the necessary information to enable the scheme to start carrying out the necessary checks. The scheme normally has a further 3 months in which to make payment. Most transfers from a DB scheme are at least £30K, so require a member to have received regulated advice before the transfer can proceed to a scheme which offers 'flexible access'. That advice has to be given based on a 'known' value expected to be paid within a given timeframe, not one which is going to wander around before payment is actually made.

If the member does everything they need to do and the payment is not made within 6 months of the date of calculation, then OP's daughter should make that point to the scheme and ask them to recalculate at the point of payment. The Pension Ombudsman's usual approach (with some exceptions) is that she would be entitled to the higher of the original CETV or the newly calculated value. That assumes there are no valid reasons for the delay, such as an 'amber flag' being raised during the ceding scheme's enquiries.

Looking at the size of the CETV, I suspect this results from a period of under two years of LGPS membership. So far as I am aware, the same statutory timeframes apply - but we have at least two LGPS experts posting regularly on this forum.

Lemon_dr1zzle or  @Silvertabby could you please confirm? 

Marcon

nb_bob said:

Isthisforreal99 said:

What do you think a reasonable time scale is? Could have been delays at either side.

How do you know there would have been any growth, could have been the opposite.

According to Google:

"The average time to transfer a pension is typically between 
two to six weeks, but can vary significantly from a few days to several months. Factors like whether the transfer is electronic (faster) or paper-based (slower), the complexity of the pension, and the efficiency of the providers involved all play a role."

Google's views are also of no relevance. A CETV (cash equivalent transfer value) is specific to a defined benefit scheme. The answer you obtained relates to transfer values from one defined contribution scheme to another - and is still pretty misleading.

Silvertabby

£12K could well be from <2 years service, but may not be if OP's daughter was part time.

Yes, the time scale seems longer than we would like to see, but there may be many reasons for that - first one that springs to mind being that the gaining SIPP is cautious about accepting transfers from a public sector DB scheme ("the computer says no") even when the CETV is less than £30K and the service didn't meet the vesting period.  Another reason could be that the LGPS were waiting for, say,  revised transfer factors or regulations, meaning that all non essential transfers are put on hold.

At this stage, can only suggest that OP contacts her LGPS administators to ask exactly why the transfer took so long.