Pension Transfers - 10 Key Points To Consider
The second reason why it’s worth considering a pension transfer began in our last paragraph above - pension charging structures have undergone radical transformation in the last few years. Because Stakeholder Pensions have now been introduced and the charges associated with them are much lower this has also had a knock on effect on the charging structures of all pension plans.
This means charges across the board are generally much lower than they used to be - good news indeed. Therefore with less of your retirement savings going towards expensive charges the money saved is of course available to invest in your retirement fund instead.
So if you’re one of the people who finds themselves stuck with an outdated, overpriced pension plan, you may be able to transfer to a cheaper plan from the same provider, or shop around elsewhere.
Now the 10 key points you must consider…
1) Do you know what Pensions you want to transfer?
If you’re someone who has lost count of how many pensions you’ve accumulated over the years then the first job therefore is to locate these pensions. You’ll then decide if it’s worth transferring or not. If you have one or more old company or personal pensions that you’d like to locate, contact the Pension Tracing Service
Their database of over 200,000 pension schemes will probably be able to help you and it won’t cost you anything either. Phone 0845 6002 537 or call textphone 0845 300 0169 if you have speech or hearing difficulties.
Or write to:
Pension Tracing Service
The Pension Service
Room TB201
Tyneview Park
Whitley Road
Newcastle-upon-Tyne
NE98 1BA.
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2) Check to see if you really are entitled to transfer a pension(s) after all - you may not be.
You will not be able to transfer your deferred pension if you left the scheme before 1 January 1986 if it was a public service scheme, (like Teachers for example) or a scheme where the deferred pension plan guarantees that it’s full value will keep in line with inflation. If those restrictions don’t apply to you then, yes you will be legally entitled to transfer your preserved pension into another scheme or plan.
3) Next ask your pension providers for a valuation and statement for each scheme you are entitled to.
You must make a written request for a ‘statement of entitlement’ if you were part of a final salary scheme and they will send you a statement of your scheme’s ‘Transfer Value’ which will remain valid for three months from a ‘guarantee date’ they will provide you with. They must send you your Transfer Value Statement value within three months of your initial request unless they can cite exceptional mitigating circumstances as to why they were unable to do so.
You will then have three months in which to respond and accept the transfer value and request that the transfer goes ahead on your behalf. You must make a full written request to do this and the overseeing scheme trustees will then be legally obliged to pay the transfer value within six months of the guarantee date.
Similarly, once requested a statement of the transfer value must be provided within three months for those past members of money purchase schemes. Again should you wish to proceed with the transfer, after written application the scheme trustees must also pay you the transfer value within six months of your application.
Please continue reading this article on page three… >>>