Shoud I transfer old workplace pensions into my current GPP?

[Satsuma]

I have several small defined contribution workplace GPP schemes from previous employments, all <£20k transfer values as of the last statement.
All of them are on whatever the recommended/default investment strategy is for that scheme. I have no particular desire to get involved in that at the moment.

I am considering transferring them all into my current employer GPP. My current scheme seems as good as any of the old ones and I am fed up with wrangling all the different bits of paperwork each year.

Is this a truly stupid idea for some reason I am not thinking of?

TIA
Sats

[mearnsfool]

Seems reasonable but some of them may well reduce the transfer value if you are not retiring or that was the case when I did a similar thing a 8 years ago.

In that case I was retiring from my employers scheme and I had to inform my employers pension outsourcer that I was retiring and to tell the old fund I was retiring in order not to get a reduced transfer.

They old pension scheme still wanted to put on a reduction until the outsourced admin company admitted they had not advised the old pension fund I was retiring.

I had to get the outsourced pension admin to apply gain for the transfer and say I was retiring that time. As if by magic the transfer amount was increased.

Therefore have eyes in the back, side and front of your head.

[Raptor]

I had the same thoughts when I had various pensions from different employments. Even with advice from the relevant schemes the consensus for me was to leave them where they were for the time being. Then I partially retired and after a while looked at them again, a friend worked for St James at the time, got them to consolidate them for me and they did a good job of it for 8 years as my current pension scheme at the time would not accept the transfer in of all the various schemes without problem.
Then I got to 60 and the pension changes and opened a sipp with hl and entered drawdown (st james was pants at drawdown). Maybe running a sipp would be a way to go? Only a suggestion.

Raptor

[Alaric]

Maybe running a sipp would be a way to go?

If you expect to have a number of employers over a working lifetime, setting up a SIPP to consolidate the funds from all the various previous schemes might be a long term plan. So at any time, you just have two schemes. One is the SIPP and the other is the current employer's scheme. When you leave the current employer, you transfer the pension to the SIPP.

[swill453]

If you expect to have a number of employers over a working lifetime, setting up a SIPP to consolidate the funds from all the various previous schemes might be a long term plan. So at any time, you just have two schemes. One is the SIPP and the other is the current employer's scheme. When you leave the current employer, you transfer the pension to the SIPP.

On the other hand, the OP's idea of transferring old ones into the current employer's scheme has a lot going for it too, and means there's only one to keep track of. Especially if there's no desire to get involved in investment decisions.

This assumes all are straightforward money purchase schemes, with no guarantees or transfer penalties.

Scott.

[Satsuma]

Seems reasonable but some of them may well reduce the transfer value if you are not retiring or that was the case when I did a similar thing a 8 years ago.

In that case I was retiring from my employers scheme and I had to inform my employers pension outsourcer that I was retiring and to tell the old fund I was retiring in order not to get a reduced transfer.

They old pension scheme still wanted to put on a reduction until the outsourced admin company admitted they had not advised the old pension fund I was retiring.

I had to get the outsourced pension admin to apply gain for the transfer and say I was retiring that time. As if by magic the transfer amount was increased.

Therefore have eyes in the back, side and front of your head.

I had no idea this reduction was even a thing! is it a standard policy to reduce transfer values if not retiring then? I mean, what is it to the transferring co what's happening to the money after it leaves their control? I know I've asked for transfer valuations in the past and I don't readily recall being asked whether it was due to my retirement or just moving it.

As regards Alaric's and Raptor's SIPP suggestion, is there some other practical benefit to opening a SIPP over consolidating all into my current scheme? Isn't that just the same problem I have now, albeit on a smaller scale (and with possibly a larger element of me having to manage it?)

And for Scott's query I am pretty sure the bumpf I got when I joined my current scheme was all ok with transfers in, and I don't ever recall seeing any penalties/guarantees applicable on the others - but will check, thanks for the prompt. One thing I do know is that the current scheme has low management fees. I remember checking this against the other schemes when it was set up, so at least on that angle it'd be worthwhile.

So it seems I am not missing anything vital, it's more a case of checking the paperwork and then getting on with it? I suppose it could be a bit eggs in one basket, but that basket is itself is held by a reputable company and invested quite broadly anyway, based on my target retirement date. I guess if that changes, then I'd need to get more involved in investment choices.

Thanks
Sats

[swill453]

I had no idea this reduction was even a thing! is it a standard policy to reduce transfer values if not retiring then? I mean, what is it to the transferring co what's happening to the money after it leaves their control? I know I've asked for transfer valuations in the past and I don't readily recall being asked whether it was due to my retirement or just moving it.

Some "old school" pensions might apply a reduction if you transfer rather than "retire". Anything that resembles a "with profits" insurance policy ie one of those opaque investments that tries to hide a lot of detail from you (because they know best).

Hopefully destined to the scrap heap or history books, but no doubt there are still some around.

Scott.

[mearnsfool]

Yes one of the good ladies with profits scheme shows something like £20k fund value but £18k transfer value.

In that case you only get the full value if you retire.

With regards to the OP's remark of what has it got to do with them what you are doing with your dosh, it is just a warning from two separate schemes I know about. If the OP knows better or their schemes do not give two different figures well and good but do not shoot the messenger.

[Satsuma]

I had no idea this reduction was even a thing! is it a standard policy to reduce transfer values if not retiring then? I mean, what is it to the transferring co what's happening to the money after it leaves their control? I know I've asked for transfer valuations in the past and I don't readily recall being asked whether it was due to my retirement or just moving it.

Some "old school" pensions might apply a reduction if you transfer rather than "retire". Anything that resembles a "with profits" insurance policy ie one of those opaque investments that tries to hide a lot of detail from you (because they know best).

Hopefully destined to the scrap heap or history books, but no doubt there are still some around.

Scott.

I'm pretty sure mine don't fall into that category, but forewarned is forearmed, thanks!

[Satsuma]

Yes one of the good ladies with profits scheme shows something like £20k fund value but £18k transfer value.

In that case you only get the full value if you retire.

With regards to the OP's remark of what has it got to do with them what you are doing with your dosh, it is just a warning from two separate schemes I know about. If the OP knows better or their schemes do not give two different figures well and good but do not shoot the messenger.

Thank you Mearnsfool. And also my sincere apologies as I fear you misconstrued my earlier remarks - I absolutely was not shooting the messenger! I am very grateful to you for highlighting a possible issue that I had no awareness of of at all!

Sats

[Alaric]

With regards to the OP's remark of what has it got to do with them what you are doing with your dosh, it is just a warning from two separate schemes I know about.

It was thought acceptable thirty years ago for regular premium pension schemes to pay as much as half the contribution as commission for as long as the first two years. Rather than simply remove the commission from money supposedly invested, it was a practice to hide the outgo by means of having higher charges on the first couple of years payments for the lifetime of the policy. In order to recover the upfront costs if the policy didn't last to retirement, it was also the practice to pay a lower amount on earlier transfer.

[ursaminortaur]

With regards to the OP's remark of what has it got to do with them what you are doing with your dosh, it is just a warning from two separate schemes I know about.

It was thought acceptable thirty years ago for regular premium pension schemes to pay as much as half the contribution as commission for as long as the first two years. Rather than simply remove the commission from money supposedly invested, it was a practice to hide the outgo by means of having higher charges on the first couple of years payments for the lifetime of the policy. In order to recover the upfront costs if the policy didn't last to retirement, it was also the practice to pay a lower amount on earlier transfer.

With-profits policies also often have MVAs (Market value adjustments aka MVRs Market value reductions) applied to reflect the investment environment

http://www.thisismoney.co.uk/money/experts/article-1587034/What-is-MVR.html

Equitable life raised its MVAs on a number of occasions when they got into trouble

https://www.investmentweek.co.uk/investment-week/news/1403494/equitable-life-raises-mva-cost


Equitable Life has raised its market value adjuster (MVA) from 14% to 20% at the same time as informing investors that policy surrender values have been cut by 10%