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  • FIRST POST
    • driverjohn
    • By driverjohn 10th Nov 18, 7:12 PM
    • 2Posts
    • 2Thanks
    driverjohn
    With profits pension - transfer?
    • #1
    • 10th Nov 18, 7:12 PM
    With profits pension - transfer? 10th Nov 18 at 7:12 PM
    Apologies in advance for the long post. The executive summary is that I am wondering whether to transfer an old with profits pension into my SIPP.

    I already have an auto enrolment pension with Capita that I am paying into from my current job, and a SIPP with HL that I pay some extra money into every month, as the Capita scheme is not very flexible. These two pensions I understand reasonably well and am happy with. I am at least 25 years away from retirement.

    AEGON have occasionally been writing to me for the last couple of years about a Scottish Equitable Group Personal Pension plan that I paid into for less than a year in 2000/2001 while I worked at a company that I think is now defunct. While I was working there a financial advisor came in and sold everybody a pension plan and I will confess that at the time I paid little attention to what was being said. I don't seem to be able to find any paperwork relating to it now. I left that company around the middle of 2001 and stopped paying into the pension then. I put off doing anything about the letters from AEGON because I figured the pot would have at most about 1000 in it. A few days ago I finally got around to using the activation code they sent me in one of the letters and to my great surprise the AEGON website shows that the pension has a transfer value of 17076.94 as of today. It also shows total contributions of 7878.56.

    I was at a loss to explain how I contributed that much money over a short period of time so I compiled a spreadsheet of the entire transaction history and it indeed shows 9 contributions totalling 876.71 gross (846.29 net), ending on 2/5/2001. This sounds about right. However there are then 8 "contracted out rebates" totalling 7001.85 at irregular intervals from 1/3/2002 to 2/7/2012. I have no idea what these are and I am sure I did not work for the company during that time. In addition, on the 3rd of August every year there is a "Fund charge rebate", these total 252.34 and on the same day every year there is a charge entry, these total -213.98.

    Looking through the documents on the website further there is an asset allocation for the investment of contributions - European Tactical 20%, International 50%, Technology 20% and UK Equity Tactical 10%. I vaguely remember the advisor talking at length about this. Then there is a bit about a former protected rights portion and a non-protected rights portion which I don't really understand, and then there is a Plan Valuation showing the funds that the money is invested in. These first 4 funds correspond to the earlier asset allocation totalling 1454.56. Then there is a "High Equity WP fund" valued at 8273.79, and a Final Bonus of 7348.59. This adds up to the 17079.94 total.

    I have attempted to research this High Equity WP fund online and have not really learned very much, other than that it seems to be a with-profits fund that is closed to new business. It also seems that the final bonus may or may not be paid, and also a Market Value Reduction may or may not be subtracted if I transfer the money out. None of the documentation seems to be any more specific than that. I know virtually nothing about with-profits pensions except that they are apparently obsolete and I am also rather hazy about contracting-out, except that I remember the advisor telling me it would be a good idea to contract out at the time. I am fairly sure I was not contracted out in the jobs I worked in after this one and my national insurance record on gov.uk seems to back that up.

    So what I would like to find out is whether it would be a good idea to apply for a transfer of the money in this scheme into my SIPP, and if I did transfer, how likely would I be to get the full amount, given that the final bonus and the MVR seem to be at the discretion of AEGON? Thanks for your time.
Page 1
    • xylophone
    • By xylophone 10th Nov 18, 7:26 PM
    • 27,267 Posts
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    xylophone
    • #2
    • 10th Nov 18, 7:26 PM
    • #2
    • 10th Nov 18, 7:26 PM
    https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Pensions/Pensions_speedbrief_Protected_rights_abolished_fro m_6_April_2012

    Explains the rebate and protected rights.
    • dunstonh
    • By dunstonh 11th Nov 18, 1:01 AM
    • 95,773 Posts
    • 63,468 Thanks
    dunstonh
    • #3
    • 11th Nov 18, 1:01 AM
    • #3
    • 11th Nov 18, 1:01 AM
    I was at a loss to explain how I contributed that much money over a short period of time so I compiled a spreadsheet of the entire transaction history and it indeed shows 9 contributions totalling 876.71 gross (846.29 net), ending on 2/5/2001. This sounds about right. However there are then 8 "contracted out rebates" totalling 7001.85 at irregular intervals from 1/3/2002 to 2/7/2012. I have no idea what these are and I am sure I did not work for the company during that time. In addition, on the 3rd of August every year there is a "Fund charge rebate", these total 252.34 and on the same day every year there is a charge entry, these total -213.98.
    Rebates come from contracting out or SERPs or S2P. They become the former protected rights fund value. Protected rights has been abolished and is now classed as non-protected rights. However, legacy plans often still separate them because of legacy software issues.

    So what I would like to find out is whether it would be a good idea to apply for a transfer of the money in this scheme into my SIPP,
    Analyse what you have. The terms, features and investments and compare them to the alternative.

    and if I did transfer, how likely would I be to get the full amount, given that the final bonus and the MVR seem to be at the discretion of AEGON?
    You get whatever the transfer value is on the day of transfer.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • westv
    • By westv 11th Nov 18, 9:39 AM
    • 4,641 Posts
    • 2,236 Thanks
    westv
    • #4
    • 11th Nov 18, 9:39 AM
    • #4
    • 11th Nov 18, 9:39 AM
    That link doesn't work for me.
    • xylophone
    • By xylophone 11th Nov 18, 12:54 PM
    • 27,267 Posts
    • 16,313 Thanks
    xylophone
    • #5
    • 11th Nov 18, 12:54 PM
    • #5
    • 11th Nov 18, 12:54 PM
    That link doesn't work for me.
    Try typing "protected rights" into Google and it should bring up the article.
    • driverjohn
    • By driverjohn 11th Nov 18, 1:08 PM
    • 2 Posts
    • 2 Thanks
    driverjohn
    • #6
    • 11th Nov 18, 1:08 PM
    • #6
    • 11th Nov 18, 1:08 PM
    That link doesn't work for me.
    There's an extra space in the word "from" in the link. Interesting article btw xylophone. Thanks
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