Move frozen pensions to one pot???

poonum

My husband and I are totally confused - he has 3 frozen pensions from old employers and a 4th pension with his current employer. We thought it would be a good idea to move the frozen ones to his current pension and have everything in one pot, but his employer will only accept the "protected or non-protected" portions of his frozen pensions, not both. What does this mean?!

Also, he has to pay around a 1% per anum management fee on each of his frozen pensions, so surely it would make sense to transfer them all to one pot and just pay the one management fee??

We're very confused, advice appreciated!

dunstonh

he has 3 frozen pensions from old employers and a 4th pension with his current employer. We thought it would be a good idea to move the frozen ones to his current pension and have everything in one pot, but his employer will only accept the "protected or non-protected" portions of his frozen pensions, not both. What does this mean?!

By use of the term frozen, this suggests that all 3 of the old pensions are final salary schemes as money purchase schemes cannot be frozen. This means your husband is taking on a high risk transaction so he really needs to be aware of what he is doing.

but his employer will only accept the "protected or non-protected" portions of his frozen pensions, not both. What does this mean?!

I think you will mean they will only take non protected rights and will not accept any protected rights (or where there is GMP). This can be because they dont accept protected rights in their scheme and/or they dont want to take on the liability of the GMP.

Also, he has to pay around a 1% per anum management fee on each of his frozen pensions, so surely it would make sense to transfer them all to one pot and just pay the one management fee??

This comment suggests that they are not final salary schemes but money purchase schemes as final salary schemes dont have annual management charges (at employee level). However, money purchase schemes cannot be frozen so you need to be clear on what the pensions are.

If you have 4 pots of pensions with a 1% amc or one pot with a 1% amc then the charges are identical at 1%.

We're very confused, advice appreciated!

At a guess it sounds like at least one of the old pensions has GMP or protected rights and is a final salary scheme whilst others are money purchase. Consolidation may or may not be a good thing depending on the costs of transfer against what you will get back in its place. Will the consolidation pay more or less than held individually or more or less than transferring to a personal pension, stakeholder or section 32 buy out bond.

If you are not capable of working all this out then you really need advice before doing it as you could end up losing a lot of money if you get it wrong.