Merge pension funds?

Arsenium

Hello there,

I dont usually post on the forum but I have a query. I switched jobs about 6 years ago. I had been paying into a company pension in the old job and I started paying into another pension fund in the current job. Both are administered by the same company, Mercer. Obviously I have stopped making contributions to the original one as have the company but the investments are still being made etc and there is some growth.

So I am wondering...should I merge the old one in with the current one? Or should I leave it as is? Is there any benefit to merging them?

Many thanks.

Francie Barrett

Arsenium wrote: »

Hello there,

I dont usually post on the forum but I have a query. I switched jobs about 6 years ago. I had been paying into a company pension in the old job and I started paying into another pension fund in the current job. Both are administered by the same company, Mercer. Obviously I have stopped making contributions to the original one as have the company but the investments are still being made etc and there is some growth.

So I am wondering...should I merge the old one in with the current one? Or should I leave it as is? Is there any benefit to merging them?

Many thanks.

In a practical sense, there should be no difference in having the two funds or the one. Which pension fund suited your needs best? If it's the one for your latest job, I would be inclined to fold the old one into it. Also, you might want to consider fees - which pension offers investments with the least amount of fees? Naturally, it makes sense to keep your investments compounding at the least cost to you.

Drumpot

Arsenium wrote: »

Hello there,

I dont usually post on the forum but I have a query. I switched jobs about 6 years ago. I had been paying into a company pension in the old job and I started paying into another pension fund in the current job. Both are administered by the same company, Mercer. Obviously I have stopped making contributions to the original one as have the company but the investments are still being made etc and there is some growth.

So I am wondering...should I merge the old one in with the current one? Or should I leave it as is? Is there any benefit to merging them?

Many thanks.

Benefit to merging is usually from administrative perspective, you have them all in one pot and its easier to keep tabs. It doesn't necessarily equate to lower fees/charges.

Benefits to having more then one Pension is flexibility. If you have all Pensions in one pot when you go to draw it down you will have to drawdown everything in one go. If you have several pensions from different employment, you should have the option to draw them down individually as you choose. There is also merit to having different investment strategys. If its in one pot with one company, you are restricted to the funds available within that company.

Your current paid up Pension (from your old job), can possibly be moved into a PRB in your own name. The benefits of that is usually that it takes your old employer out of the equation and you have your pension options retained in your own name.

skippy2

As stated.........If you have two pensions you are paying two sets of fees. We all hate Fees
But you would need to make sure, in writing, that there are no charges etc to combine the two if you choose to do this.

PaulM1977

Fees are based on fund value so it doesn't make a difference if there are two separate amounts, the same fee should apply. The only caveat is what is that you need to compare the fund charges of both, see which is better and then decide to transfer in the old pension or leave it where it is.
If you are in an actively managed fund, they usually charge a little bit extra on the annual management charge(AMC) for the privilege, switch out of that. It has been proven that actively managed funds do not outperform passively managed funds, which also have a lower AMC.