Pensions query

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Some advice from resident PH bods much appreciated.

1. I worked for Employer A (private sector) for a few years.
- Employer A have a defined-contribution pension scheme, into which they made contributions on my behalf while I worked there.

2. I left Employer A, and joined Employer B (public sector).
- Employer B have a defined benefit scheme (career average), of which I was a member whilst I worked there
- I contributed ~8% of my salary, and my employer made contributions of ~22% of salary into the scheme
- Employer B's rules state that if you work for them for less than 2 years, then you can't keep your pension with them, you must either transfer the entitlement out when you leave, or get a refund of contributions.
- I worked for employer B for pretty much exactly 1 year, from March 2014-March 2015.
- In this time, my and my employer's combined contributions were ~£20k.

3. I left Employer B a week ago, and returned to Employer A
- Employer B will only transfer my entitlement to another career average scheme. Given that I don't have access to such a scheme, I get a refund of contributions.

Questions:
- What tax liability might I potentially have from a refund of contributions? I am a higher rate taxpayer.
- I am unlikely to receive a refund of contributions before 6th April. If there is a tax liability, which tax year would this refund fall into? (given that the refund relates to work undertaken in tax year 14/15)
- In an ideal world, I'd like to take the contributions refund and stick it straight back into a pension pot (because otherwise I'd have no pension for my year with employer B). What is the best way of doing this, and would it have tax implications?
- How much should I be looking to pay someone to give me proper professional advice on this kind of thing?

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The Leaper said:

Regarding the tax on refund point, before payment of the refund to you the plan administrators are obliged to apply the tax charge of a straightforward 20% (assuming the refund is below £10,800) so you will receive 80% net. There is no facility for any reclaim of this tax by you. As this is the standard procedure the question of the year the contributions have been paid and the relevant tax rate is not an issue to consider. The administrators are responsible for accounting for the tax to HMRC. So, simplicity itself!

R.

Thanks. What if the refund is above £10,800? (~£20k?)

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So, I'm due to lose £6k to George and there's nothing I can do about it?

fk.

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sidicks said:

The Leaper said:

And what public sector scheme was it? Most are unfunded so where did you get the 22% figure from?

R.

Notional employer contribution (real world required contribution is much higher!!)

Civil Service.

Need to investigate whether I get employer conts back or just mine...

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Yep it's just my contributions.

Double fk.

I've been royally done over. Not happy.

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The Leaper said:

I do agree, though, that prohibiting you from taking a transfer value equal to the capital value of your accrued benefits is not really fair.

R.

This is where I have been done over.

When I joined the scheme, they said I could do transfer out if I wished, and I joined on that basis.

However they now say that because I didn't notify them by 6th Jan this year that I was leaving (I didn't know I was leaving until Feb), I *can't* transfer.

The capital value of my accrued benefits is ~£25k. I was expecting to be able to transfer this out when I left. Instead silly rules are preventing that transfer, and so I end up with £6k.

Those silly rules cost me £19,000. That's why I'm not happy.