DC Pension - Transfer to new employer Provider substantial amount

T

TisMeITIs

Registered User
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5
Hi All,

Appreciate you advise on possible pros and cons on the following scenario.

I (45M) have recently left an employer after 25 yrs service. I have a DC pension with approximately 300k. So I am a deferred member of this scheme.
Over the years the company, through M&A's had changed providers from New Ireland to Mercer to Willis Tower Watson, and as such insisted that we move the funds we had to the new provider. had no choice or issue at the time, So as it stands atm, 300k in WTWatson.

The new employer has pension provider (Mercer aspire - administered by Zurich Life)

I have seen a short q&a with Eoin McGee where he advises people to keep their pensions in the old pension. I may have misunderstood him, or maybe he was referring to a specific situation, but I like the idea of moving my funds into my new employers scheme. I was never comfortable with WTWatson, as they never seemed like a pension company that I was familiar with, and I would feel more comfortable if my pension was managed by one of the more familiar providers.

So my question is - is there any positives/negatives to moving funds to new provider ?
Company has a death in service policy of x times salary + pension fund, so I'd like to have the 300k in the one spot, in the event of endgame. Assuming it would be easier for my wife and kids(teens) to gain the benefits.

I never really know how to review the performance of my pension, it doesn't seemed to have grown much in the last 1-2 years. I have invested in the "manage it for me" with high risk type selection. Understand that this may be down to the markets, but any advise of where/how to get a better understanding of the performance of my pension ?

Anyway - appreciate any thoughts / advise.

Kind Regards,
TisMe.
 
Generally it is advisable to remain in the group scheme as the annual management charge is generally alot more competitive than moving to an Individual contract. However you should query this with Mercer as this may not be the case depending on the size of existing scheme

You can always move your fund to a PRB , PRSA or to your new scheme

Please note that you would have lost your death in service benefit when you left service so the only benefits is the pension pot

I would recommend contacting an independent broker to review your options as you should get competitive terms for a fund of 300k
 
TisMeITIs said:
So my question is - is there any positives/negatives to moving funds to new provider ?
Click to expand...
You've a 3rd option; transfer your pension to a 'buy out bond' or PRSA with a provider of your choice.

One reason not to merge it with your new company's pension is doing so would lose the option of 'retiring' that pension early. As things stand, you can access 25% of the old pension tax free anytime from the age of 50 because you've left the employment.

Edit: post crossed with @Realcork
 
Realcork said:
Generally it is advisable to remain in the group scheme as the annual management charge is generally alot more competitive than moving to an Individual contract. However you should query this with Mercer as this may not be the case depending on the size of existing scheme

You can always move your fund to a PRB , PRSA or to your new scheme

Please note that you would have lost your death in service benefit when you left service so the only benefits is the pension pot

I would recommend contacting an independent broker to review your options as you should get competitive terms for a fund of 300k
Click to expand...
Hi Realcork - I'm a bit confused - you say "moving to an individual contract". I would be moving to my new employers company scheme, it's a large multinational so would assume terms would be similar and it would be a group contract - I can compare the admin charges of both old and new.

Am I missing something in the above ?

Thanks.
 
RedOnion said:
You've a 3rd option; transfer your pension to a 'buy out bond' or PRSA with a provider of your choice.

One reason not to merge it with your new company's pension is doing so would lose the option of 'retiring' that pension early. As things stand, you can access 25% of the old pension tax free anytime from the age of 50 because you've left the employment.

Edit: post crossed with @Realcork
Click to expand...
Thanks RedOnion - That's something for me to think about, although tempting, I'm initially of the mindset to not dip into it early. Ideally I'd like to retire at 60 but that's not something that may now be realistic as the retirement age has gone from 65 to 68 (I think).

Am i correct in saying that PRSA's admin fees are more expensive ?
new employer annual management charges are 0.63611% for the fund that I'm 100% invested in. Seems like a very good rate.
 
TisMeITIs said:
Am i correct in saying that PRSA's admin fees are more expensive ?
Click to expand...
Generally, yes.
A buy out bond is cheaper than a PRSA, but there are plans to abolish them and replace with PRSAs. Both would be higher than the expenses on your new employers scheme.

I've a mix of old pensions, because I want the option of accessing the 25% (not that I'm planning to use it, but it's a fallback). I've 1 in a buy out bond, and another I've left with old employers scheme because the total expenses is less than 0.3%.

What's your old pension invested in? As it happens, my old one is also with WTW, but I never have to talk to them. I know what it's invested in, and get my annual statement. They're a very well established pension administrator here.
 
@TisMeITIs
I would suggest you find out who will cover the administration costs if you just leave it where it is. 'Lifesight' is the master trust of WTW pensions, but the underlying funds have very low total expenses, as low as 0.2%. I think they might be Legal & General funds under the hood. If your former employer covers the admin costs, it might be better than moving them.

Hopefully someone familiar with those specific funds might reply.
 
TisMeITIs said:
Hi All,

Appreciate you advise on possible pros and cons on the following scenario.

I (45M) have recently left an employer after 25 yrs service. I have a DC pension with approximately 300k. So I am a deferred member of this scheme.
Over the years the company, through M&A's had changed providers from New Ireland to Mercer to Willis Tower Watson, and as such insisted that we move the funds we had to the new provider. had no choice or issue at the time, So as it stands atm, 300k in WTWatson.

The new employer has pension provider (Mercer aspire - administered by Zurich Life)

I have seen a short q&a with Eoin McGee where he advises people to keep their pensions in the old pension. I may have misunderstood him, or maybe he was referring to a specific situation, but I like the idea of moving my funds into my new employers scheme. I was never comfortable with WTWatson, as they never seemed like a pension company that I was familiar with, and I would feel more comfortable if my pension was managed by one of the more familiar providers.

So my question is - is there any positives/negatives to moving funds to new provider ?
Company has a death in service policy of x times salary + pension fund, so I'd like to have the 300k in the one spot, in the event of endgame. Assuming it would be easier for my wife and kids(teens) to gain the benefits.

I never really know how to review the performance of my pension, it doesn't seemed to have grown much in the last 1-2 years. I have invested in the "manage it for me" with high risk type selection. Understand that this may be down to the markets, but any advise of where/how to get a better understanding of the performance of my pension ?

Anyway - appreciate any thoughts / advise.

Kind Regards,
TisMe.
Click to expand...
Willis have a market cap of $14.28 billion compared to Mercer who are valued at $552 million. They are a much bigger company than Mercer!!!


The money you have accumulated is deferred no matter where it is. The biggest benefit of that is that if you died pre retirement, the money is paid to your spouse tax free and she is not limited to 4 x salary and the value of personal contributions (with the remainder being invested in an ARF/ buy an annuity).

As Onion says, the biggest benefit of keeping them separate is that you can mature them at different time. It provides you with options. If you have them in one, you have to mature at the same time.

As for fund performance, 2022 was a pretty bad year for equities, so the value of your pension will have fallen. A lot happened, so the falls weren't good for investors. But stick with and your money will recover.

If you want to transfer to a policy in your own name, you old employer will stop paying some of the fees and you will have to pay them instead, so of course it will be more expensive. You get more control over where the money is and the investment strategy. And you don't have to deal with your old employer again...although that is more of mute point these days with master trusts.


Steven
www.bluewaterfp.ie
 
Steven Barrett said:
The biggest benefit of that is that if you died pre retirement, the money is paid to your spouse tax free and she is not limited to 4 x salary and the value of personal contributions (with the remainder being invested in an ARF/ buy an annuity).
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I didn't realise that part. Don't tell my wife!
 
I was in a similar situation to the OP, except I had two deferred pensions from previous employments. As others have mentioned, I believe it's better to keep them separate and not put them into your new employer's scheme as it gives you more flexibility.

I decided to put them into two separate PRBs, so that I wouldn't be dependent on company trustees in future. There was a case recently (in this forum I believe) about a person who couldn't access their pension as the there were no trustees appointed to it (can't remember the details, but I think the previous trustees left the company and the company was very slow to appoint new ones). Maybe that won't happen in future due to the Master Trusts structure as @Steven Barrett mentions above.

I was able to get a PRB with a 0.65% AMC, which was similar to the charge that I was paying in the deferred company scheme AFAIR.
 
I'd keep separate, you could always move into a prsa (for a day), take tax free cash and stick the remainder in an ARF,, If aged 50, it's possible to get much lower fees on an ARF, 0.35% or 0.4% I.eml that th3 company admin charge

Flexibility of keeping separate worth a lot imo
 
Cameo said:
I'd keep separate, you could always move into a prsa (for a day), take tax free cash and stick the remainder in an ARF,, If aged 50, it's possible to get much lower fees on an ARF, 0.35% or 0.4% I.eml that th3 company admin charge

Flexibility of keeping separate worth a lot imo
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If it goes into an BOB first, it cannot then go into a PRSA (the BOB will be done away with at some point in the future too). Also, under a BOB, you can access the fund from age 50. With a PRSA, you must have actually retired. Small differences but important ones if you are looking to claim early.
 
Oisin19 said:
This is not true. Some providers may have “foolishly” signed up to this so they could pay more commission to brokers but this is not universal.
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Retiring early from a PRSA just requires that you are over 50 and it contains no contributions relating to your current employment.
 
Oisin19 said:
This is not true. Some providers may have “foolishly” signed up to this so they could pay more commission to brokers but this is not universal.
Click to expand...
Fortune said:
Retiring early from a PRSA just requires that you are over 50 and it contains no contributions relating to your current employment.
Click to expand...
the pension authority confirmed that a prsa can only be accessed from age 50 to 60 if the person is economically inactive. This is different to rules from accessing a PRB from age 50
 
Realcork said:
the pension authority confirmed that a prsa can only be accessed from age 50 to 60 if the person is economically inactive. This is different to rules from accessing a PRB from age 50
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Show me where this is written in law that is regulated by the PA?
 
Realcork said:
the pension authority confirmed that a prsa can only be accessed from age 50 to 60 if the person is economically inactive. This is different to rules from accessing a PRB from age 50
Click to expand...
If that's the case then what happens if...
  1. You stop working
  2. You take a tax free lump sum
  3. You invest the rest in an ARF
  4. Or you buy an annuity with the balance
  5. You start drawing down pension income
  6. You take up employment subsequently
Does somebody (who?) stop ARF drawdowns or annuity payments? Or is there some tax (clawback?) penalty?
 
Oisin19 said:
Show me where this is written in law that is regulated by the PA?
Click to expand...
Oisin , not trying to state an argument . Im just outlining
ClubMan said:
If that's the case then what happens if...
  1. You stop working
  2. You take a tax free lump sum
  3. You invest the rest in an ARF
  4. Or you buy an annuity with the balance
  5. You start drawing down pension income
  6. You take up employment subsequently
Does somebody (who?) stop ARF drawdowns or annuity payments? Or is there some tax (clawback?) penalty?
Click to expand...
sorry clubman , maybe im confusing the thread, i was just referring to early retirement rules from a PRSA.
 
Realcork said:
the pension authority confirmed that a prsa can only be accessed from age 50 to 60 if the person is economically inactive. This is different to rules from accessing a PRB from age 50
Click to expand...
I wouldn't trust the Pension Authority's opinion on anything.
 
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