SIPP can i transfer AVC funds.

Ewymac

I have contributed K35 ish into the PRU teachers AVC. Can I transfer it into SIPP and is it a wise decision? Are there restrictions because it is a final salary scheme.

Am I right in thinking that I would have better control of my money and that the Pru AVC fund has performed poorly in recent years.

I am a novice in this area, but keen to learn!!!

Mant thanks in advance.

dunstonh

in-house AVCs are treated as occupational pensions generically because of the impact they can have on the final salary scheme. You would need to assess what you are losing.

Since A day you can transfer as long as the trustees have amended the scheme rules to allow the link to be broken. Schemes didnt have to comply with A day changes straight away and whilst some have, some have not yet needed to. I think its something like 10 years grace they have been given.

Am I right in thinking that I would have better control of my money and that the Pru AVC fund has performed poorly in recent years.

What makes you think that the Pru with profits fund has performed poorly in recent years? Also, I did a review of a teachers AVC with Pru a few weeks ago and it had access to their unit linked range as well so choice does exist.

EdInvestor

I believe the teachers AVC at the Pru is more like an FSAVC/personal pension, ie not actually linked to the occ scheme. Hence should be possible to move it to a SIPP.The Pru WP fund has in fact been one of the very few WP funds which has performed well in recent years.

What investment strategy would you pursue if you moved the money to the SIPP?

jem16

EdInvestor wrote: »

I believe the teachers AVC at the Pru is more like an FSAVC/personal pension, ie not actually linked to the occ scheme. Hence should be possible to move it to a SIPP.

Teacher's AVCs were always part of the occupational scheme. Some changes have been made but more to do with flexibility of when you can take them. However it does say "in certain circumstances" you may be eligible to transfer. See below;


Q Can I transfer my AVC fund out of the Teachers' AVC?

A If you leave the main Teachers' Pension Scheme, you may transfer your AVC account, together with the main scheme benefits, to another Registered Pension Scheme, or where your employer has provided you with a refund of main scheme contributions, your AVC account will be refunded. This refund is subject to a tax charge, currently 20% on any refund below £10,800 and 40% on any excess.

In certain circumstances you may be eligible to transfer your AVC fund independently of transferring your main Teachers' Pension Scheme. Charges may apply.

On transfer, any funds invested in the With-Profits Fund may be subject to an MVR.

Ewymac

Thank you very much for your response. I have now researched, and I am much happier with the PRU`s with profits funds performance. Consequently I will continue with them for the time being.

I put 9% into AVC`s and £250 into the Alliance and Leicester regular Saver. (I
started it last Dec and therefore got a good intro rate 12% I think) My other savings went into their Direct Isa issue 4.

I may start an investment ISA, through regular savings to boost my pension and long term future needs. I have 20 yrs to go before I want to retire.

Is this the best way forward.

EdInvestor

According to the TP website:

Q. Will I receive my teachers’ AVC benefits when I receive my TPS pension?
A. Payment of your teachers’ AVC benefits does not have to be linked to payment of your TPS pension. You could access your teachers’ AVC at any time from age 55.

This seems to suggest that one key factor about AVCs: that they must be accessed at the same time as the scheme pension has been changed at TPS and that you can take benefits from them any time after 55, same as a personal pension.Presumably this also means they can be transferred from aged 55 to a SIPP for drawdown.

However this wouldn't mean you could transfer the AVC fund before age 55 to a SIPP and continue contributions. Only if you left the TPS itself and wanted to transfer both that fund and the AVC together to another provider would that be possible.