The Lemon Fool

My wife changes jobs quite often, and I wonder how her pension contributions are recorded and accounted for. As an example, one employer accrued perhaps £200 of contributions. She joined a new employer who had a Civil Service scheme, so we transferred that £200 into the new scheme. Now that employment has ended and she is with another new employer, who if anyone is recording all this so that in 20 years or so, when she qualifies for a pension, she gets all these trivial pensions?

NomoneyNohoney wrote:Now that employment has ended and she is with another new employer, who if anyone is recording all this so that in 20 years or so, when she qualifies for a pension, she gets all these trivial pensions?

Each individual pension scheme is supposed to keep records, but you might consider keeping your own records, not least of a contact address, so you can periodically ask what they are worth. There is or was a Government Initiative "Pensions Dashboard" whose stated objective is to simplify tracing the funds from past employments.

Another approach, for defined contribution schemes at least, would be to set up a SIPP and transfer into it at the end of each employment.

Its up to the individual really, schemes are unlike to hunt down people for small payments. https://www.gov.uk/find-pension-contact-details is a start point.

For a defined benefit pension, the pension accrued during employment will be ‘deferred’, ie you keep the pension built up during that time, it will normally be uprated by inflation, and then you can take it at the scheme normal retirement date (or earlier, reduced). Your wife needs to keep a record of the last statement she had.
For defined contribution pensions, there is the option of transferring them to either a new employers scheme (usually), or to s personal pension, or leaving them where they are. Check that there are no penalties or loss of special features before you move a pension.
But yes, essentially, we are all responsible for our pension provision, and should keep careful records and inform ourselves or the options avaiable.

JohnB wrote:Its up to the individual really, schemes are unlike to hunt down people for small payments. https://www.gov.uk/find-pension-contact-details is a start point.

A couple of general points which may be useful to some, one specifically wrt the above statement, one to the OP.

Whilst scheme's don't 'hunt down' people for small payments, trustees will make reasonable effort to ensure members approaching retirement are aware of their pensions. For example,the trustees are likely to have instructed the scheme's administrators to write to a member a fixed period, often 6 months, prior to the scheme normal retirement age. They can only do this based on any contact details that they have, and it's up to the member to keep these up to date. If no response is received back, for larger pensions they may make a second approach, based on the practice the trustees have agreed with their administrators, and anyone over a certain age, such as 70, who has not accessed their pension will be flagged up in the management reports reviewed by the administrators and trustees. But essentially, it is indeed the responsibility of the member to be in control of where their pensions are, and when they are accessed.

WRT the OP, as many may be aware, the term 'trivial' has a specific meaning in the pension industry. If the aggregate of an individual's pensions is less than £30k (based on the sum of any DC pots, and using the 20 x rule for DB pensions), they can, subject to various other conditions being met, be taken as 'trivial commutation' in one go. It's something that benefits the individual, and also the scheme as it avoids future costs of managing small pensions and paying them out monthly/in small sums. I don't think this is what the OP was meaning, but I thought I'd throw it in anyway in case it helps any other readers of this thread.

NomoneyNohoney wrote:My wife changes jobs quite often, and I wonder how her pension contributions are recorded and accounted for. As an example, one employer accrued perhaps £200 of contributions. She joined a new employer who had a Civil Service scheme, so we transferred that £200 into the new scheme. Now that employment has ended and she is with another new employer, who if anyone is recording all this so that in 20 years or so, when she qualifies for a pension, she gets all these trivial pensions?

I wonder if it's possible to "coalesce" or if you prefer unite all these pensions? I've got four pensions. A big one and three little ones. I've not yet looked into the costs charged by the pension holder to transfer to the big pension. But I do know the big pension holder won't charge me to transfer.

Hope that helps

AiY

Chrysalis wrote:For a defined benefit pension, the pension accrued during employment will be ‘deferred’, ie you keep the pension built up during that time, it will normally be uprated by inflation, and then you can take it at the scheme normal retirement date (or earlier, reduced). Your wife needs to keep a record of the last statement she had.
For defined contribution pensions, there is the option of transferring them to either a new employers scheme (usually), or to s personal pension, or leaving them where they are. Check that there are no penalties or loss of special features before you move a pension.
But yes, essentially, we are all responsible for our pension provision, and should keep careful records and inform ourselves or the options avaiable.

I have worked just three pension paying jobs, two with Research councils (BBSRC and MRC) and my present University job. The first two were only for a couple of years each and all three have/had DB schemes. What I did is keep the BBSRC pension as a deferred pension (as it pays out at sixty), I've kept them up to date with my address and once a year they send me a statement with what my pension will be (not a lot*) and my lump sum ( 3x not a lot). It goes up by inflation every year. The MRC pension I transferred into my university pension (being similar schemes they had an agreed procedure for doing this). They tell you in advance how many years you get so you can decide if it is sensible to go ahead.

So if they are DB pension schemes I'd look at the possibility of transferring them into your present scheme for simplicity, providing the terms are reasonable. If not leave them as a deferred pension, but keep the Trustees up to date with a contact address. With a small DB pension, if you are a long way from retirement and it is small, a transfer out to a Sipp might be sensible as you could get better growth than inflation and if small you don't have to employ and IFA.


* so small its only a few hundred quid a year so its not exactly going to make much difference to my retirement.

Your wife only gets these pensions if she asks for them! Otherwise it will stay invested in the scheme and become lost

The onus is on the employee to track their pensions. Unsuprisingly there is a large and growing problem.

I have 6 pensions, 2 of which are under £10k. I've thought about transferring these to my SIPP. However I am thinking instead to take two small pots in one go as a lump sum, 25% tax free and 75% at marginal rate. I called them and for this particular scheme <£10k and the rules allow can draw down the lot.