Transfer of occupational pension - advice please

intrepid_investor

Hi there

I am a deferred member of an occupational pension scheme and I am no longer employed by the company which runs the scheme.

I recently requested a transfer value from the scheme actuary with a view to transferring the amount (£7k) to my current, active Heritage personal pension plan I hold with Phoenix/Resolution. Unfortunately they tell me they're closed to new business and will be unable to accept the transfer.

Is there something else I can transfer the occupational scheme money into?

Cheers
II

Andy_L

You could transfer it to a different personal pension/stakeholder/SIPP.
However the poviders view an occupational transfer as a "high risk" transaction (that's a high risk of you sueing them if it goes wrong) and will want an IFA to sign off the transfer. Since an IFA may well have the same view it can be difficult to achieve.

I you sure transfering it is a good idea?

EdInvestor

Is it a money purchase or a final salary scheme? The first should be no problem to go into a new pension , the second probably shouldn't be transferred.

You'd also be wise to review your Phoneix pension too IMHO. How much is in it? What is it invested in? Does it have any guarantees?

intrepid_investor

Thanks for your replies so far.

OK, the small business connected with the occupational scheme that I am a deffered member of doesn't look like it will survive much longer, hence my interest in getting my money out while I still can. When I joined it was a final salary scheme, as it still is for existing members.

My total contributions amounted to around £300 before I withdrew from the scheme and started a personal plan with Phoenix, then Royal Heritage. Twenty years later that £300 has grown and is today worth £7k as a transfer value.

I'm still paying into my phoenix pension plan so obviously would prefer not to begin another plan elsewhere just so I can transfer my occupational money into it.

I don't know whether to stop my phoenix plan, now worth around £38k, and open another pension and move it all there along with the £7k from my old occupational scheme.

To be honest I'm bewildered.

Cheers

EdInvestor

First of all, final salary schemes are protected in case firms go bankrupt now.

https://www.pensionprotectionfund.org.uk

If you are bewildered you would probably be best to find an independent adviser (IFA) to explain the situation to you and to review your Phoenix pension to see if it needs to be moved to a better company or left alone.


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intrepid_investor

Thanks. I expect an IFA will charge for this? If so, how much can I expect to pay for his/her service.

Cheers

dunstonh

Thanks. I expect an IFA will charge for this? If so, how much can I expect to pay for his/her service.

High risk area, on nil commission basis I would expect £1000-£2500 would be the typical banding you would be looking at.

nickynack

a lot of the companies will do a nuetral sales transfer, so perhaps it is wise to think about shoving the whole lot into one pot, if you cant get the transfer into the existing, set up a new one and transfer the lot.

Neutral Sales basically means you do it off your own back with no IFA and although its much cheaper, its a bit riskier as you dunno funds etc, unless your pretty clued up on pensions (in which case you wouldnt be asking!)

dunstonh

nickynack wrote: »

a lot of the companies will do a nuetral sales transfer, so perhaps it is wise to think about shoving the whole lot into one pot, if you cant get the transfer into the existing, set up a new one and transfer the lot.

Neutral Sales basically means you do it off your own back with no IFA and although its much cheaper, its a bit riskier as you dunno funds etc, unless your pretty clued up on pensions (in which case you wouldnt be asking!)

The generic term for what you mention is execution only (if using an IFA) or direct to provider (if going direct). All IFAs can do execution only but what the OP is asking for here is for execution only in a high risk area. Many providers and most IFAs will not transact execution only/direct to provider in high risk areas. This is because using execution only in a transaction that you believe could is not in the client's best interests is not acceptable to the FSA and you can be fined and have to pay redress. As most final salary occupational pensions are best left where they are, statistically doing execution only in this area leaves you open to what most would class as an unacceptable liability.

bigbloke45

nickynack, where do you get the idea that dealing with an insurer direct is cheaper than going through an IFA? I don't think so, otherwise insurers would be offering better terms than their main distribution arm.

It sounds like a good review of the current situation and some advice is really in order here.

Paying a fee doesn't in MHO always result in better advice. What is needed, I believe, is an "arms length" view and a good "tidying up" exercise.