Private Pension Company - Drawdown - Is this correct?

56puddles

When I started my application to drawdown 25% (tax free) from my pension, it was early Feb, this year. I was assured the process would take 2-3 weeks and funds would be in my bank account.

It's now 7 weeks and I have a concern having received the following Friday afternoon last week:

'… the speed of the actual bank payment is not the issue here. Pensions are invested as share units in Global Markets, and not one single fund. In order to realise a cash sum to be paid out, the units need to be sold, and this is handled by our Third Party Fund Manager. This process is immutable and out of our control.'

'As soon as the funds have been disinvested and realised as cash, we will make a same day payment.' Team Manager

Prior to last Friday's email, I'd received an email earlier in the week indicating payment would be in my bank account within 7 - 10 working days. With a bit grace by Friday, this week, it will have been over the projected 10 day time frame.

So, does the above from the team manager ring true? And, more's the point what if funds aren't received by Friday, which puts real financial issues upon my bank account.

Any previous experience or insights would be much appreciated.

Thanks

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6659048/private-pension-company-drawdown-is-this-correct

Did you not realise you needed the money in your pension before starting the process?

dunstonh

So, does the above from the team manager ring true? And, more's the point what if funds aren't received by Friday, which puts real financial issues upon my bank account.

Yes. The sale of funds needs to be keyed and settlement from those takes 2-3 working days. Then the drawdown transaction needs to be keyed. If it involves going through a payroll system then major providers will usually have a daily payroll but smaller players may only run a weekly or even just two a month.

Then you have capacity issues. February and March are two of the busiest months of the year, typically. So, what may take 2-3 weeks in normal times gets pushed back. There is a lot of slowness going around at the moment as Easter is early and over the tax year so deadlines for tax year end are all a bit earlier than normal.

If you have illiquid or non-standard assets, they may take longer to sell. The reference to third party manager is an unusual one as most platforms and adviser firms would be the ones keying the sales. Not a third party. So, that seems unusual. It sounds like a bolt on to another pension where the main pension has to wait for the bolted on bit to sell the funds and send it to the main part. That was not unusual decades ago but not commonplace nowadays.

I guess it really comes down to who started the drawdown process. Is an IFA, FA, wealth manager? Or directly with the provider?

56puddles

https://forums.moneysavingexpert.com/discussion/comment/81917939#Comment_81917939

A bit more disclosure on my part.

The pension came in to existence with my former employer and was with a separate pension provider, which subsequently acquired by Cushon… and until more recently has been re-branded as NatWest Cushon. When I see anything with NatWest, I tend to have a dim view - RBS/NatWest and the banking crisis.

I think I will check my bank account in the morning and get on the phone if no funds have arrived.

dunstonh

The pension came in to existence with my former employer and was with a separate pension provider, which subsequently acquired by Cushon… and until more recently has been re-branded as NatWest Cushon. When I see anything with NatWest, I tend to have a dim view - RBS/NatWest and the banking crisis.

Cushon is a master trust scheme. So, its investments don't work in the same way as a traditional personal pension or SIPP does.

Natwest no longer own Cushon. They sold it to Willis Towers Watson.

Anyone used to the service levels of the professional administrator companies (not just WTW but in general) would know that they typically operate at two speeds: stop and slow. However, to be fair to WTW, their own master trust scheme seems better than many others. The problem is that yours is in the one that is going to be shut down and transferred over. So, service levels will be impacted.

56puddles

https://forums.moneysavingexpert.com/discussion/comment/81918327#Comment_81918327

From what I read earlier today, the acquisition by Willis Towers Watson is hoped to be completed by them by Q2. This would be little benefit to my current circumstances.

Following a polite, but terse conversation today with NatWest Cushon, I have insisted that a complaint be raised (I was on-hold whilst being initiated), but further exasperation to hear NWCushon would get back to me in 21 days (by mid-April). I explained this was unacceptable with major financial implications.

The guy I was speaking with closed out the call, confirming to me that funds would be in my "bank account in 3 working days." I informed him that if not, I would raise a complaint elsewhere (Financial Ombudsman Service) on Monday, next week.

Many thanks for your insights which have been useful.

dunstonh

The guy I was speaking with closed out the call, confirming to me that funds would be in my "bank account in 3 working days." I informed him that if not, I would raise a complaint elsewhere (Financial Ombudsman Service) on Monday, next week.

because this is a master trust scheme you can't complain to the Financial Ombudsman Service – your external route is The Pensions Ombudsman (TPO) instead. You also have to go through Cushon’s internal dispute resolution procedure first, which normally runs on a similar 8‑week timescale, before TPO will usually get involved.

56puddles

Pleased to confirm payment was received today, though not after receiving an email from the complaints team this morning indicating their internal investigation could take up to 8 weeks to report back to me. Frankly, I didn't have 8 weeks before any payment of funds.

I'll now consider my position regards the remaining funds staying with Cushon. The experience since early February doesn't fill me with confidence moving forward should I have need for further draw-downs in future and with the knowledge of being acquired by Willis Towers Watson being completed by Q2.

Sam_666

If your pension is worth 85k or less, move it to sipp.

LHW99

https://forums.moneysavingexpert.com/discussion/comment/81921034#Comment_81921034

There are at least several good reasons for moving the remainder to a SIPP and possibly some poor ones but the £85k limit is not really something to consider. It has been discussed here

https://forums.moneysavingexpert.com/discussion/6632807/are-sipp-039-s-covered-for-more-than-85k

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81921014#Comment_81921014

I would be planning a transfer out asap. regardless of its value. Although the value can affect the best choice of provider, as some work out cheaper for smaller sums and some for larger ones.

If you read through the forum you will see lots of references and comments about pension providers, transfers etc.