Company Pensions when leaving employment
Discussion
Usual options:
- Do nothing, hope investment returns are greater than (inflation+fees).
- Keep is on as a personal pension, continue to pay out of post-tax pay.
- Give it a couple of weeks and then transfer the value accrued into your new employers pension scheme. Autoenrolment means they're almost guaranteed to have one, unless they're genuinely tiny. This is my preferred option.
Assuming defined contribution, anyway - defined benefit schemes are a bit more complex and you definitely need proper advice.
- Do nothing, hope investment returns are greater than (inflation+fees).
- Keep is on as a personal pension, continue to pay out of post-tax pay.
- Give it a couple of weeks and then transfer the value accrued into your new employers pension scheme. Autoenrolment means they're almost guaranteed to have one, unless they're genuinely tiny. This is my preferred option.
Assuming defined contribution, anyway - defined benefit schemes are a bit more complex and you definitely need proper advice.
How long have you been in the company pension? If it's a trivially small amount, it may well be returned.
Otherwise, it'll stay in the scheme, along with their contributions, invested in exactly the same way as it'd have been if you'd stayed there - but, obviously, with no more going in.
You could move it to a different pension provider. It might or might not be worth doing. Crystal balls are funny things...
(I'm assuming it's the usual money-purchase with a commercial scheme, rather than anything internally managed or defined benefit)
Otherwise, it'll stay in the scheme, along with their contributions, invested in exactly the same way as it'd have been if you'd stayed there - but, obviously, with no more going in.
You could move it to a different pension provider. It might or might not be worth doing. Crystal balls are funny things...
(I'm assuming it's the usual money-purchase with a commercial scheme, rather than anything internally managed or defined benefit)
I recently tackled this and consolidated my old workplace pensions into a SIPP.
Pick a SIPP provider. (http://moneyweek.com/personal-finance/isas/stocks-shares-isa-providers-cost-comparison-table/)
Open a SIPP account, probably 10 mins online.
Call your old pension provider and get a cash transfer balance.
Fill in the provider's transfer form (probably print out a paper form online, but to be returned by post. Basically it's just the old and new account numbers, an approx transfer balance and an authorisation signature.).
New SIPP provider will take care of the transfer in, with the funds arriving as cash. Can take 6-10 weeks.
When the cash balance arrives, choose your investment funds from your new provider.
Every time you change job, transfer in the balance from the old scheme to your SIPP (unless it's a final salary scheme, in which case, get advice).
Pick a SIPP provider. (http://moneyweek.com/personal-finance/isas/stocks-shares-isa-providers-cost-comparison-table/)
Open a SIPP account, probably 10 mins online.
Call your old pension provider and get a cash transfer balance.
Fill in the provider's transfer form (probably print out a paper form online, but to be returned by post. Basically it's just the old and new account numbers, an approx transfer balance and an authorisation signature.).
New SIPP provider will take care of the transfer in, with the funds arriving as cash. Can take 6-10 weeks.
When the cash balance arrives, choose your investment funds from your new provider.
Every time you change job, transfer in the balance from the old scheme to your SIPP (unless it's a final salary scheme, in which case, get advice).
Some details:
- I've been enrolled in it 3 years this month
- I pay 5% of my salary and the company match it
- The new employer also has a pension scheme and I plan to continue with 5% contributions with them matching this
Will see what details my employer gives me, but if rolling it into the new scheme with my new employer is an option, I'll probably do that for simplicity.
- I've been enrolled in it 3 years this month
- I pay 5% of my salary and the company match it
- The new employer also has a pension scheme and I plan to continue with 5% contributions with them matching this
Will see what details my employer gives me, but if rolling it into the new scheme with my new employer is an option, I'll probably do that for simplicity.
romeogolf said:
but if rolling it into the new scheme with my new employer is an option, I'll probably do that for simplicity.
You need to think about spreading risk across providers and or funds as well - and it is worth looking at the relative fees of both the old and new provider and the selection of funds that they offer. In my case, I left the pension with the old provider from the previous company as the investment choices were OK and the fees were actually lower than the ones at the new place.
Also, the choice of funds in the new scheme is minimal, I much prefer the wider selection in the old scheme. I can also still contribute additionally to the old scheme as well. A pretty good arrangement.
Having several pensions is not necessarily a bad thing..... Managing them does not need to take any significant time.
Bob
Just a quick one... unless you have some other provision for retirement, a 5% contribution (even if matched by employer) is not enough for a comfortable retirement. Bump it up to 10% when you join the new company, hopefully they'll match 10%, and you'll never miss it from your take-home.
It's obviously more complicated than that but, in general, 5% is not enough.
It's obviously more complicated than that but, in general, 5% is not enough.
Most only match up to 5% these days
Things to think about
1. To transfer there is usually a few sometimes that's extortionate to the point you'd never move it
2. Having lots of small pots is fine - spreading the risk + if company pension schemes one goes bust it's not the end of the world.
3. OP wil have state pension too
Does anyone here pay into a current company pension scheme but then transfer it out to a previous scheme If deal is superior?
Things to think about
1. To transfer there is usually a few sometimes that's extortionate to the point you'd never move it
2. Having lots of small pots is fine - spreading the risk + if company pension schemes one goes bust it's not the end of the world.
3. OP wil have state pension too
Does anyone here pay into a current company pension scheme but then transfer it out to a previous scheme If deal is superior?
Welshbeef said:
Most only match up to 5% these days
Things to think about
1. To transfer there is usually a few sometimes that's extortionate to the point you'd never move it
Depends very much on the scheme and how long it has been running.Things to think about
1. To transfer there is usually a few sometimes that's extortionate to the point you'd never move it
Welshbeef said:
2. Having lots of small pots is fine - spreading the risk + if company pension schemes one goes bust it's not the end of the world.
Except that's not really relevant at all as these are Unit-linked DC schemes with segregated assets, do 'going bust' is not really relevant.Welshbeef said:
3. OP wil have state pension too
Yes.Welshbeef said:
Does anyone here pay into a current company pension scheme but then transfer it out to a previous scheme If deal is superior?
Seems likely you'll be paying double fees.Thanks for replies.
5% is maximum the company will match, which is why I'm contributing that level. I also have two BTL properties, one of which is on a repayment mortgage rather than interest-only with the intent of using the rental income from this as part of my retirement income and the sale of the second to 'boost the pot' when the time is right.
5% is maximum the company will match, which is why I'm contributing that level. I also have two BTL properties, one of which is on a repayment mortgage rather than interest-only with the intent of using the rental income from this as part of my retirement income and the sale of the second to 'boost the pot' when the time is right.
Welshbeef said:
Today had my current company pension statement. It's a defined contribution - expected return 65yo with RPI inflation and 50% to spouse it is effectively 2.7% of the pension fund value per year.
About right in that scenario.Tax Free Lump Sum?
Do DCs offer a Levelling Option?
Better to lose the wife now?
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