Pension - Transfer or leave it where it is?

ando

Hi guys,

I have a pension with a previous company (I worked there and contributed to the pension from 2006 - 2013). When I left that company I went into a company that had no pension scheme, so I left it where it was. It has continued to increase in value as time has gone on.

I started my current job in 2015 and am part of this companies pension scheme. Is there an advantage to transferring my old pension lump sum over to my current scheme or should I leave it where it is until I retire in 30 years and then pull it down separately to the state pension and my current active private pension??

Merowig

It would only make sense in my opinion to transfer it to the new scheme if the fees for the new schemes are (significant) lower than the fees of the old scheme...

If you keep them seperate you have the advantage of additional diversification and you can retire the schemes at different ages.

Henry Ford III

Merowig wrote: »

It would only make sense in my opinion to transfer it to the new scheme if the fees for the new schemes are (significant) lower than the fees of the old scheme...

If you keep them seperate you have the advantage of additional diversification and you can retire the schemes at different ages.

No you can't. The rules relating to the old scheme will still apply including NRD. Taking retirement benefits any earlier will require the trustees consent.

Merowig

Henry Ford III wrote: »

No you can't. The rules relating to the old scheme will still apply including NRD. Taking retirement benefits any earlier will require the trustees consent.

Yes you can when you are over 50 years old and have the consent of the trustees and/or the company as your said yourself.
Or at any time if you are in ill health.

As said having several pots opens to the possibility to retire them at different ages (given consent and you are over 50).

Henry Ford III

Merowig wrote: »

Yes you can when you are over 50 years old and have the consent of the trustees and/or the company as your said yourself.
Or at any time if you are in ill health.

As said having several pots opens to the possibility to retire them at different ages (given consent and you are over 50).

Transferring the retained benefits out into a PRB is the way to go. Full control over investment and retirement including early retirement.

You need to be careful giving pub type advice because it's incorrect and unsound.

I've seen several schemes refusing an early retirement request.

Merowig

What was incorrect? Yes you need approval - but that's it.

I personally would not transferr it to a PRB - as this is less flexible for my needs (e.g. it is unsure if a PRB can be transferred abroad - a financial advisor I spoke with didn't know if its possible - you can though transfer a PRSA and and an OPS... ). Also a PRB usually has higher charges than an Occupational Pension Scheme.


Transferring to a PRB would only be attractive after the Occupational Pension scheme declined early retirement and you are sure you want to retire that amount.

Henry Ford III

Merowig wrote: »

What was incorrect? Yes you need approval - but that's it.

I personally would not transferr it to a PRB - as this is less flexible for my needs (e.g. it is unsure if a PRB can be transferred abroad - a financial advisor I spoke with didn't know if its possible - you can though transfer a PRSA and and an OPS... ). Also a PRB usually has higher charges than an Occupational Pension Scheme.


Transferring to a PRB would only be attractive after the Occupational Pension scheme declined early retirement and you are sure you want to retire that amount.

You might not get approval. That's the point. You also control the investment.

bridster007

Henry Ford III wrote: »

You might not get approval. That's the point. You also control the investment.

Presuming this is a DC scheme, on what grounds could trustees refuse a transfer ? I know its always in the rules but I've never understood why a transfer could be refused, assuming it is a permitted transfer under pension law.
What reasons have you seen for refusal before (excluding DB schemes) ?

ANXIOUS

bridster007 wrote: »

Presuming this is a DC scheme, on what grounds could trustees refuse a transfer ? I know its always in the rules but I've never understood why a transfer could be refused, assuming it is a permitted transfer under pension law.
What reasons have you seen for refusal before (excluding DB schemes) ?

It'll take him a few hours to make something up.

I

Grassey

DarraghR wrote:

It looks to be. Just compared both cards and the only major size difference is the length.

bridster007 wrote:

Presuming this is a DC scheme, on what grounds could trustees refuse a transfer ? I know its always in the rules but I've never understood why a transfer could be refused, assuming it is a permitted transfer under pension law. What reasons have you seen for refusal before (excluding DB schemes) ?

I've seen it happen where employee fell out with employer and left company on bad terms, tried to sue company, and Trustees refused to allow transfer or early retirement as a FU while proceedings were ongoing. But in general have yet to come across any other reason where permission was refused. Most are only too happy to have their responsibility for deferred assets removed from the scheme.

Henry Ford III

ANXIOUS wrote: »

It'll take him a few hours to make something up.

I

You stopped mid stream

p.s. Bad blood (in various guises) is why Trustees might not allow early retirement. It's not that uncommon.

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Henry Ford III

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You shouldn't be leaving anything like that to chance though imho. You should also not be dealing with somebody else's (the old scheme) default investments when you can handle it yourself.

Merowig

Henry Ford III wrote: »

You shouldn't be leaving anything like that to chance though imho. You should also not be dealing with somebody else's (the old scheme) default investments when you can handle it yourself.

You can transfer it a t a later point still to a PRB. The chance of rejecting early retirement I found to be quite slim.


And what default investments? E.g. I have several options in my OPS I can chose myself from.

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Henry Ford III

Merowig wrote: »

You can transfer it a t a later point still to a PRB. The chance of rejecting early retirement I found to be quite slim.


And what default investments? E.g. I have several options in my OPS I can chose myself from.

Who knows what the default investments are? Point is the OP can't do anything about them whilst still in the scheme. Those decisions aren't possible.

I'll ignore the opening comment as it's silly.

Merowig

The OPS I came across so far offer multiple investment options. You can deceide from the options made available.

I don't see what the problem should be....

guile4582

I have one in the UK not a whole lot in it, under 10k. but with brexit and whatnot. leave it where it is?

The J Stands for Jay

Henry Ford III wrote: »

No you can't. The rules relating to the old scheme will still apply including NRD. Taking retirement benefits any earlier will require the trustees consent.

Only really an issue for DB schemes. They wouldn't care either way on DC.

The J Stands for Jay

Henry Ford III wrote: »

Transferring the retained benefits out into a PRB is the way to go. Full control over investment and retirement including early retirement.

You need to be careful giving pub type advice because it's incorrect and unsound.

I've seen several schemes refusing an early retirement request.

A nice little earner for your advisor. Commission on the new product.

The J Stands for Jay

guile4582 wrote: »

I have one in the UK not a whole lot in it, under 10k. but with brexit and whatnot. leave it where it is?

The UK have just changed their transfer rules, and at the moment no Irish pension company are taking UK transfers.

Henry Ford III

McGaggs wrote: »

A nice little earner for your advisor. Commission on the new product.

Depends on what's agreed. Disclosure is a requirement don't forget.

tatumkelly

McGaggs wrote: »

The UK have just changed their transfer rules, and at the moment no Irish pension company are taking UK transfers.

This is not correct. Multiple companies are still accepting transfers. Legislative changes made a couple of years ago have all been ironed out and clarified by HMRC, the only recent change was the issue of tax treatment as announced by Govt a few weeks ago. This has not affected the ability to transfer funds to Irish schemes.

The J Stands for Jay

tatumkelly wrote: »

This is not correct. Multiple companies are still accepting transfers. Legislative changes made a couple of years ago have all been ironed out and clarified by HMRC, the only recent change was the issue of tax treatment as announced by Govt a few weeks ago. This has not affected the ability to transfer funds to Irish schemes.

It has affected the willingness of the administrators to accept the transfers. Try to get a transfer done today and you'll struggle.

tatumkelly

McGaggs wrote: »

It has affected the willingness of the administrators to accept the transfers. Try to get a transfer done today and you'll struggle.

That's very different to your remark that 'no Irish companies are accepting transfers'.

They are slow to process and get the funds into the country but that's where the struggle ends IME.

The J Stands for Jay

tatumkelly wrote: »

That's very different to your remark that 'no Irish companies are accepting transfers'.

They are slow to process and get the funds into the country but that's where the struggle ends IME.

It has affected their willingness to accept transfers in that they will not currently accept them. No UK scheme can transfer abroad without confirmation from the accepting scheme that they comply with the QROPS regulations. No-one is currently willing to do so.

tatumkelly

McGaggs wrote: »

It has affected their willingness to accept transfers in that they will not currently accept them. No UK scheme can transfer abroad without confirmation from the accepting scheme that they comply with the QROPS regulations. No-one is currently willing to do so.

Has this change occurred in the past 10 days? If not, then there are in fact at least 2 Irish providers complying with QROPS regs.

The J Stands for Jay

tatumkelly wrote: »

Has this change occurred in the past 10 days? If not, then there are in fact at least 2 Irish providers complying with QROPS regs.

It's just come in this week. No Irish provider is currently able to comply with QROPS regs.

tatumkelly

Thanks for that update.

Not sure what's changed in regulation in the last 2 weeks that they can't comply.

tatumkelly

Thanks for that update.

Not sure what's changed in regulation in the last 2 weeks that they can't comply.

Merowig

About some of the changes coming in effect on the 6th of April
https://www.gov.uk/government/publications/pension-tax-for-overseas-pensions/pension-tax-for-overseas-pensions

guile4582

i really dont understand pensions. i was advised no harm leaving it where it is. should i reasess this? will i have issues in future accessing?

ANXIOUS

guile4582 wrote: »

i really dont understand pensions. i was advised no harm leaving it where it is. should i reasess this? will i have issues in future accessing?

In the vast majority of cases ie 99.9999% of pension retirements from a DC Ops you will have no problems.

Henry Ford III

ANXIOUS wrote: »

In the vast majority of cases ie 99.9999% of pension retirements from a DC Ops you will have no problems.

What do you base that on exactly?

ANXIOUS

Henry Ford III wrote: »

What do you base that on exactly?

In an overall context what would you put the percentage at?

Henry Ford III

ANXIOUS wrote: »

In an overall context what would you put the percentage at?

Answer my question first and I will.

ANXIOUS

My experience comes from being a trustee of a numerous pension schemes and having been involved in hundreds of retirements and never seeing a trustee refuse one in a DC scheme.

Unfortunately that doenst fit the narrative of people in your industry who recommend transferring your benefits for 'flexibility' which in most instances means an increase in amc and a commission for you.

The J Stands for Jay

ANXIOUS wrote: »

My experience comes from being a trustee of a numerous pension schemes and having been involved in hundreds of retirements and never seeing a trustee refuse one in a DC scheme.

Unfortunately that doenst fit the narrative of people in your industry who recommend transferring your benefits for 'flexibility' which in most instances means an increase in amc and a commission for you.

And for the 0.0000001% a quick email to the Pensions Ombudsman does the trick to get things moving.

Henry Ford III

If you were a trustee (I have doubts on your claims btw) you'd know that a financial services industry is absolutely necessary for schemes to be initiated and serviced, and that has to be paid for.

Regarding the prb thing it is the correct advice. Accessing benefits is one issue but investment control is more important. Any reasonable Trustee should know and highlight that. Costs are a necessary side effect but as a Trustee you'll know it's a competitive market, and that any fee or commission has to be agreed and disclosed.

Merowig

As previously stated most Occupational Pensions are offering several different investment opportunities/funds.


Accessing is in most cases not an issue - so I don't see it as a valid argument for a PRB.
The average Joe Doe would be overwhelmed with accessing ~200 different funds and in most cases what is offered by the occupational pensions funds is good enough.
I didn't come accross anything which says that PRBs are performing better than Occupational Pensions - including fees.

ANXIOUS

Henry Ford III wrote: »

If you were a trustee (I have doubts on your claims btw) you'd know that a financial services industry is absolutely necessary for schemes to be initiated and serviced, and that has to be paid for.

Regarding the prb thing it is the correct advice. Accessing benefits is one issue but investment control is more important. Any reasonable Trustee should know and highlight that. Costs are a necessary side effect but as a Trustee you'll know it's a competitive market, and that any fee or commission has to be agreed and disclosed.

Lol complete garbage, what has anything you've said in the above got to do with the question.

What percentage would you give on a trustee declining an early retirement request for a DC scheme?

No straight answers, as per usual.

While amcs and fees have to be laid out there is no need to highlight the amcs of the scheme they are leaving.

Henry Ford III

Merowig wrote: »

As previously stated most Occupational Pensions are offering several different investment opportunities/funds.


Accessing is in most cases not an issue - so I don't see it as a valid argument for a PRB.
The average Joe Doe would be overwhelmed with accessing ~200 different funds and in most cases what is offered by the occupational pensions funds is good enough.
I didn't come accross anything which says that PRBs are performing better than Occupational Pensions - including fees.

1/. You won't know about a trustees intentions or inclinations unless you are a mindreader. You won't know the history between employer and employee either which can be a major factor.

2/. The average Joe Doe needs advice. Thanks for the backhanded endorsement.

3/. That's a strawman.

It's actually slightly comical that you are so fixated by the pursuit of the lowest cost option that you can't see the wood from the trees.

I'll leave it at that I think.

Henry Ford III

ANXIOUS wrote: »

Lol complete garbage, what has anything you've said in the above got to do with the question.

What percentage would you give on a trustee declining an early retirement request for a DC scheme?

No straight answers, as per usual.

While amcs and fees have to be laid out there is no need to highlight the amcs of the scheme they are leaving.

If you had any knowledge of the subject you'd understand the opposite is the case. There's clear logic to what I've suggested.

I don't deal with every retirement claim so cannot answer the question. Seeing as you don't either nor can you. What I can say is I've encountered it on several early retirement claims. I've also seen employers declining to provide immediate vested rights.

Your last paragraph has no bearing to my point so it's impossible to progress it.

If you are a pension scheme Trustee (unlikely imho) your training needs a considerable boost.

This dialogue is at an end. I've work to do.

Merowig

Henry Ford III wrote: »

1/. You won't know about a trustees intentions or inclinations unless you are a mindreader. You won't know the history between employer and employee either which can be a major factor.

It sounds that you assume that it is normal that the relationship between trustee / employer and employees is completely broken.
This is not normally the case.

2/. The average Joe Doe needs advice. Thanks for the backhanded endorsement.

Yes so that financial advisors can milk Joe Doe.
Many financial advisors are not advisors but just simply salesmen.
For Joe Doe it is enough going for a low cost option and normally for a passive fund which just tracks the market.
For Joe Doe there is no value added by involving a financial advisor.
You endorse yourself. That's all.

3/. That's a strawman.

No you and many of your colleagues are strawmen / snakes oil salesmen. You can get the same PRSA with zero contribution charges or with 5% contribution charge if going through a Financial Advisor.

There is a good reason the UK banned commisions for financial advisors.

Henry Ford III

Merowig wrote: »

There is a good reason the UK banned commisions for financial advisors.

I'll ignore a good bit of that as it's nonsense. Your blinkers are on way too tight

Commission seem to be a dirty word for you particularly. It's similar to markup for other businesses without which you'd probably have no job. Are you familiar with the mandatory disclosure requirements? If you don't place any value on the advice of an advisor (some are better than others don't forget) then fair enough, but a lot of people do and I think the advice given by the good ones and the cost of it is reasonable at least. The regulatory requirements are onerous and are aimed squarely at consumer protection.

Best we can do is agree to differ on this element I suppose.

p.s. UK IFA's still get commission on various financial products (and generally at higher rates than here in Ireland too).

murphaph

My old OPS from Ireland has very low fees (company covers big chunk of fees) and has done well for itself. I could however at the click of a mouse change the investment mix but I do not feel confident I'd beat the returns I've been getting to be honest, but I can if I want to.

It definitely makes sense for lots of people to leave their pension where it is.

I see absolutely no reason to move my pension anywhere. I know in theory I could move it to Malta (I'm non resident) to avoid the Irish pension levy but this seems super risky to me.

Merowig

The pension levy in Ireland is gone

murphaph

Merowig wrote: »

The pension levy in Ireland is gone

Ah well then there's really no point in moving it anywhere. Somehow I missed that (rather important) bit of news. That's brightened up my day Merowig