Should I transfer multiple pensions into one

pavb2

Hope someone can help,my wife and I run a small business and over years have accumulated 5 different directors pensions. Hibernian,Quinn,Irish Life (1 each) and Bank of Ireland.

We are looking for a commercial mortgage with BOI (our bankers). So to strengthen our position we are considering transferring all pensions to BOI.

Are there any downsides to this?

Any help appreciated

homer911

The main issues would be the charges on each scheme and the rate of growth. BOI may not be the best option based on historical returns and, if it was me, these would be the most important issues. There may also be minimum maintenance charges which would make consolidation more sensible. Do you have an independent pension adviser? I would talk to them

I wouldn't really commit to transferring all funds to BOI Life to strenghten your position on a pension backed mortgage.

I would be very surprised if BOI made it a loan condition that you do so. The loan offer is more likely to require you to have 'a' combined pension fund of €x amount, assuming a certain % growth rate. I doubt that they would insist on it being a BOI Life product.

The most cost effective way of doing this is to transfer to a company that has the lowest management charge and no other charges. The reason I say this is because the charging structure will drag on the performance of the fund and you may have to increase contributions in years to come to make up for this.

It is likely that the Quinn product that you currently have may be the one with the lower charging structure (1% annual management charge) but the fund choice may be limited.

It may also be possible to transfer your current funds to another pension provider that does not incur a 5% (of fund value) transfer charge and has a wider selection of funds available @ 1% amc.

Just watch the costs/charges and don't feel pressurised by the bank into making the wrong decision.

aimar

pavb2 wrote: »

Hope someone can help,my wife and I run a small business and over years have accumulated 5 different directors pensions. Hibernian,Quinn,Irish Life (1 each) and Bank of Ireland.

We are looking for a commercial mortgage with BOI (our bankers). So to strengthen our position we are considering transferring all pensions to BOI.

Are there any downsides to this?

Any help appreciated

Yeah,definitely go and see a pension adviser,with that many different pensions your better safe than sorry.I used one myself a while ago and even though i only had one pension its good to get expert advice.send me a PM and i can give you his details

3DataModem

I would consolidate them to one provider to save on fees, but diversify the investments (depending on your age).

stepbar

Are you taking out a Pension Backed Mortgage?

pavb2

Thanks for all advice, in response

We are taking out a commercial pension backed mortgage which is why I took out the BOI pension as the capital sum is coming from them.

I'm not under pressure to transfer and in some respects by consolidating I would have all my eggs in the one basket as they say, not necessarily a good thing.

However there are some good points raised about management fees etc, in my experience with my existing pensions it was always difficult to work out what we were paying and I always felt these were never fully transparent.

I'm 45 and if I could find a scheme where fees were less another option may be to transfer into this (Has any one got any recommendations?).
I will consider the use of an independant broker.

Thanks for all advice all information helps as pensions can be a bit of a minefield to say the least. The worst scenario is to end up on retirement with a lot less than you thought.

Drumpot

Have you considered applying for the Commercial loan with different lenders ?

Have you considered trying to get a broker to negotiate on your behalf ?

On top of whats been said here , get Current values and surrender values from the Pension Companies. There may be bonus's attached to your pension that you might lose by transferring. . .

Im always weary when banks are pushing people to move their pensions to the bank. . Does your loan hinge on the Pension deal ?

If the bank will make money off your business, they will give you the loan irrespective of the Pension situation. But they will try and get you for as much as possible in the process . . If they request some sort of Life Assurance as a term of the contract, shop around (or goto a broker). If they insist you do it through them , as far as I know there's nothing to stop you agreeing to it all and then after a month shopping around for a cheaper quote . . (read T&C's)

Good luck with your application . .

broker2008

One further point is that you should insist on a full "reasons why" statement as to why you need to take out a new policy and transferring all existing policies.If this is received, I doubt, make sure that they go into details of management charges, bonuses, loyalty bonuses etc of existing policies.More than likely, they won't be able to because they will be tied to selling a particular companies' products and won't have either access or the knowledge to answer.Go to a fee based pensions specialist who should be in best position to advise. The mortgage & the pension should be separate transactions.

Lawdie

pavb2 wrote: »

We are looking for a commercial mortgage with BOI (our bankers). So to strengthen our position we are considering transferring all pensions to BOI.

Can you explain if this is pension backed? Is this through an new ireland broker or branch? Anyway consolidating will not strengthen, however taking the pension with BOI would. Of course they will look for the cross sell, what business wouldn't!

In relation to transfer its always useful to have multiple managers looking after your funds, rule of average. As long as they have decent fund performance.

Choosing who to go with, its difficult to say who is going to out perform who in the future. And past performance is...yada yada. Most "experts" have proved pretty useless over the past 36 months. Some that were classed as savvied don't want to hear from past clients after whats happened.

Premium fees, fund charges and bonuses can be explained pretty easily from the right advisor. Also noting that you have several pensions could mean that this selection may not be your last.

Also, lowest cost may mean cheaper as some have rightly pointed out. However, having someone thats solid i.e. broker, investment manger etc that will met you and make good recommendations can often be worth a 'small' premium charge. Negotiate it.

pavb2

Hi All

Yes the idea is to take out a commercial loan pay the interest off monthly and then pay off the capital sum in X amount of years when the pension(s) mature.

I know I'm not tied to BOI pension if we take out the loan but this may suit as business account is with them.

Thanks for all advice to date