Section 32 buyout - Good idea?

lazbing

Hello All,
My company got taken over and now the new company want to wind up the old company pension scheme and have offered the members 3 choices for their current funds held in the old scheme 1) Transfer all money over to their scheme 2) Transfer it into a personal pension plan (i have several - all frozen as I'm not allowed to have any active whilst I pay into the company scheme (that's the law) ) or 3) Take a section 32 buyout and put the money into various funds for retirement. I'm 50 and the fund is reasonably large so I don't want to risk it or loose any money. The easy choice would be to shift it to the new company scheme but all eggs in one basket seems a little dodgy to me, is it? What about that section 32 thing, is that a good thing? I am no financier and do want truly independent advice.

Thanks,
L

dunstonh

I'm not going to risk answering this as any of the options you mentioned could be best depending on the circumstances.

Most firms arrange for an IFA to be available to you when something like this happens and I suggest you utilise that service as they would know the facts and will be able to point you in the right direction.

jonathon_hart

lazbing wrote: »

2) Transfer it into a personal pension plan (i have several - all frozen as I'm not allowed to have any active whilst I pay into the company scheme (that's the law) )

Not since April 2006 it isn't. You can now pay into as many pension schemes as you wish to.

EdInvestor

lazbing wrote: »

1) Transfer all money over to their scheme

How does their scheme compare with the old scheme.Are they both final salary? F/S pensions are now protected under the Pension protection Fund so your worries are outdated from that point of view. Will the employer continue to contribute into the scheme? Going with the free money is usually the best bet.

2) Transfer it into a personal pension plan (i have several - all frozen as I'm not allowed to have any active whilst I pay into the company scheme (that's the law)

Also outdated info as mentioned. Clearly you have several baskets already.You should have these evaluated as it may be sensible to move them.

or 3) Take a section 32 buyout and put the money into various funds for retirement.

So this would be another basket.

More info on the two company pensions is required to say anything meaningful.

lazbing

Thanks Ed, Jonathon and Dunstonh. Neither the old nor the new pension schemes were final salary (regrettably) so that doesn't apply. Basically the new and the old schemes are roughly equivalent Money purchase schemes and the employer pays in additional funds to my contributions so I've not a problem with the new scheme per se, it was just the section 32 option the got me a little confused. Presumably this would be just another private pension scheme as Ed says and would be equivalent to put it into one of my old frozen (or not as you guys have said) schemes? Is it different from a tax angle?

EdInvestor

Are all the schemes money purchase? If so,what you need to do is look at the investment options (fund choice) and charges levied on all of them.

It may be that the new employer scheme is the best (companies can often negotiate low charges) in which case, youmight as well transfer all the old pensions into it.But you need to check for exit penalties and guarantees (if any of the pensions are in With profits schemes.)

There's no tax difference.