Are partial transfers possible?

[starter]

I have a workplace pension with Scottish Widows

I also have a consolidated SIPP with AJ Bell

The charges for the first are a lot higher even after halfing them by moving from their automatic find to their UK tracker. I don't want to close the Scottish Widows fund as it is where my workplace pension goes. But I would like to move funds periodically to my consolidated fund to get the lower fees.

Is this possible and if it is possible, are there any stings in the tail?

[xxd09]

Never heard of this happening
Pension regulations are so “tight” that I think it would be impossible
A more probable way ahead would to ask your employer to use your SIPP as your designated pension so as not to lose employers contributions -most employers won’t do this
You have a common problem which is often solved by transferring a complete pension from one provider to another-this is a recognised procedure but employers contributions are often lost
Is the high charge on the SW pension outweighed by getting employers contributions-probably
Some pencil and paper calculations required
xxd09

[starter]

Never heard of this happening
Pension regulations are so “tight” that I think it would be impossible
A more probable way ahead would to ask your employer to use your SIPP as your designated pension so as not to lose employers contributions -most employers won’t do this
You have a common problem which is often solved by transferring a complete pension from one provider to another-this is a recognised procedure but employers contributions are often lost
Is the high charge on the SW pension outweighed by getting employers contributions-probably
Some pencil and paper calculations required
xxd09

How are employer's contributions lost? I have never lost employer transfers in previous transfers. I thought defined contribution meant that once your employer contributed it was in your portable pension pot and the employer had no recourse or clawback.

As mine is through salary sacrifice my workplace pension is 100%, so this is quite a concern.

[chris]

How are employer's contributions lost? I have never lost employer transfers in previous transfers. I thought defined contribution meant that once your employer contributed it was in your portable pension pot and the employer had no recourse or clawback.

I think that what xxd09 meant was that if you organised your pension yourself, you would lose the employer's contribution to your SIPP, not that you would lose part of your pension on the transfer. As someone who processes payroll and pension payments, I would heartily agree that most, if not all employers would tell you where to go if you wanted your pension contributions paid into another fund. I certainly would not do it. Multiple transfers into different pension accounts is not my idea of fun, especially if you need to contact them to change the amount they are taking when there is a payrise etc. For me it is a case of using our provider or organise it yourself.

However, I wouldn't think that tight pension regulations would stop you transferring amounts from one provider to another since you wouldn't actually be making the transfer, just telling your SIPP provider what you wanted to do and letting them organise it. I have never done it, but it would be worth asking your SIPP provider if it is possible. I would do it with reasonable amounts and not every month but can see no fundamental reason why it shouldn't be able to be done.

[xxd09]

Apologies for not being clear
Employees who wish to opt out of their employers pension scheme and run their own pension can do so I believe
But the employer is then under no obligation to make employers contributions to this privately run fund
So this is a dilemma for those employees like you who discover that their employers organised scheme is a relatively high cost operation
Employers contributions lost versus cost savings gained by running a private scheme
Staying in the employers scheme with employers contributions factored in usually is a better one term financial bet
xxd09
PS Chris-thanks for that -you have more knowledge than me in this area-never heard of partial transfers but from what you say it’s worth asking the employer
PPS a lot of investors compromise by letting employers pension run its course and then transfer the employers pension on retirement into their SIPP ie when employers contributions have ceased

[BullDog]

I have a workplace pension with Scottish Widows

I also have a consolidated SIPP with AJ Bell

The charges for the first are a lot higher even after halfing them by moving from their automatic find to their UK tracker. I don't want to close the Scottish Widows fund as it is where my workplace pension goes. But I would like to move funds periodically to my consolidated fund to get the lower fees.

Is this possible and if it is possible, are there any stings in the tail?

Yes you can, provided the employers scheme administrator at Scottish Widows supports partial DC pension transfers. I see no reason why partial transfer of an already accrued DC pension pot should affect future employer contributions into the existing scheme. In fact, there's no reason I can see to tell the employer what you're planning to do with an already accrued DC pot, provided the existing DC plan stays open for future contributions.

First step is to ask Scottish Widows if they do in fact support partial DC pot transfers out.

[chris]

I had a quick look at the charges on a Scottish Widows scheme and it looks as though they have sliding charges as you pension grows. It would seem that 1.1% management charges is the maximum but in their example, at £40k it would be 0.5%. Therefore depending on the size of the pot, the management charges you would pay could be more if you transfer out but AJ Bell's charges are likely to be less than 0.5% anyway so you lose on one hand and gain on the other.

The reason I suggested asking the SIPP provider rather than Scottish Widows is that SW are less likely to try to pull the wool over their eyes than yours and so you are more likely to get the true position of whether it is possible than talking to someone in their support team who may not come across this very often and could give you the wrong answer.

[xxd09]

Great stuff with getting engaged with your pension provision
What you have discovered so far should empower you going forward
I too had a Scottish Widows pension back in the day(I am now 75)
Discovering myself what you have just done set me on my own investment path-now with Interactive Investor SIPPs and ISAs for many years
A projection forward of the effect of costs on your eventual pension pot size is eye watering
It could cost you in worst case scenario of up to 65% of your final fund!
Worth a bit of work by you!
I certainly found it so
xxd09

[ursaminortaur]

I have a workplace pension with Scottish Widows

I also have a consolidated SIPP with AJ Bell

The charges for the first are a lot higher even after halfing them by moving from their automatic find to their UK tracker. I don't want to close the Scottish Widows fund as it is where my workplace pension goes. But I would like to move funds periodically to my consolidated fund to get the lower fees.

Is this possible and if it is possible, are there any stings in the tail?

Yes you can, provided the employers scheme administrator at Scottish Widows supports partial DC pension transfers. I see no reason why partial transfer of an already accrued DC pension pot should affect future employer contributions into the existing scheme. In fact, there's no reason I can see to tell the employer what you're planning to do with an already accrued DC pot, provided the existing DC plan stays open for future contributions.

First step is to ask Scottish Widows if they do in fact support partial DC pot transfers out.

I seem to remember some discussion of such transfers in the past on here (or possibly on the Motley Fool site). As I recall some employers allowed such transfers from their schemes but it depended upon how the scheme was setup. Some schemes basically allowed you to have multiple sections in the scheme and you could just transfer a section but their might be limits to the number of times you could do this.
Unfortunately I can't find the posts about this when searching Lemonfool and it was sometime ago so things might have changed.

Not all schemes allow such transfers. NEST for intance will only allow a transfer if you stop contributing whilst the transfer takes place after which you could start contributing again - but of course that would mean that you would miss out on the employer contributions during that period.

https://www.nestpensions.org.uk/schemeweb/nest/my-nest-pension/transfer-your-pension-pots/transferring-your-money-out-of-nest.html

You can’t transfer out if you’re still making contributions to your Nest pension pot. If you’re thinking about stopping contributions just so you can transfer out, you might end up missing out on money from your employer and tax relief.

[BullDog]

I have a workplace pension with Scottish Widows

I also have a consolidated SIPP with AJ Bell

The charges for the first are a lot higher even after halfing them by moving from their automatic find to their UK tracker. I don't want to close the Scottish Widows fund as it is where my workplace pension goes. But I would like to move funds periodically to my consolidated fund to get the lower fees.

Is this possible and if it is possible, are there any stings in the tail?

Yes you can, provided the employers scheme administrator at Scottish Widows supports partial DC pension transfers. I see no reason why partial transfer of an already accrued DC pension pot should affect future employer contributions into the existing scheme. In fact, there's no reason I can see to tell the employer what you're planning to do with an already accrued DC pot, provided the existing DC plan stays open for future contributions.

First step is to ask Scottish Widows if they do in fact support partial DC pot transfers out.

I seem to remember some discussion of such transfers in the past on here (or possibly on the Motley Fool site). As I recall some employers allowed such transfers from their schemes but it depended upon how the scheme was setup. Some schemes basically allowed you to have multiple sections in the scheme and you could just transfer a section but their might be limits to the number of times you could do this.
Unfortunately I can't find the posts about this when searching Lemonfool and it was sometime ago so things might have changed.

Not all schemes allow such transfers. NEST for intance will only allow a transfer if you stop contributing whilst the transfer takes place after which you could start contributing again - but of course that would mean that you would miss out on the employer contributions during that period.

https://www.nestpensions.org.uk/schemeweb/nest/my-nest-pension/transfer-your-pension-pots/transferring-your-money-out-of-nest.html

You can’t transfer out if you’re still making contributions to your Nest pension pot. If you’re thinking about stopping contributions just so you can transfer out, you might end up missing out on money from your employer and tax relief.

Precisely. That's why the first step is a phone call to Scottish Widows. If possible, read the information provided when the DC plan started as background first.

[JohnB]

I think I did with a SW pension, but it was a long time ago. Someone did in 2019, see https://forums.moneysavingexpert.com/di ... partial/p2

But it all depends on the deal your employer did

[starter]

Interesting, so it can be done - but not guaranteed in my scheme.

I'm letting a change in email bed itself in, and will then call them.

Both the deal with National Insurance (and a proportion of employer's NI) and the discipline of living on a lower income means that it really does pay to maximise the workplace contributions, but the fees are almost four times the AJ Bell and quoted Vanguard tracker put together and there's not much value in that.

[starter]

I had a quick look at the charges on a Scottish Widows scheme and it looks as though they have sliding charges as you pension grows. It would seem that 1.1% management charges is the maximum but in their example, at £40k it would be 0.5%. Therefore depending on the size of the pot, the management charges you would pay could be more if you transfer out but AJ Bell's charges are likely to be less than 0.5% anyway so you lose on one hand and gain on the other.

The reason I suggested asking the SIPP provider rather than Scottish Widows is that SW are less likely to try to pull the wool over their eyes than yours and so you are more likely to get the true position of whether it is possible than talking to someone in their support team who may not come across this very often and could give you the wrong answer.

Crikey, that's the management fee. I don't know whether I have that (currently locked out for a couple of days) but if it is then it's additional to the fund charges. 1.1% plus the (lowest available) fund charge of 0.75% would make a 1.85% fee. Now it may be a fund charge only or it may be a much lower charge for a big scheme - but the chances are people are being charged at +2.5% charge per annum.

[pochisoldi]

I have a workplace pension with Scottish Widows

I also have a consolidated SIPP with AJ Bell

The charges for the first are a lot higher even after halfing them by moving from their automatic find to their UK tracker. I don't want to close the Scottish Widows fund as it is where my workplace pension goes. But I would like to move funds periodically to my consolidated fund to get the lower fees.

Is this possible and if it is possible, are there any stings in the tail?

Double check your charges for Scottish Widows.
In my case I stayed on the lower AMC that was put in place when the group pension was set up.

Their tracker funds have a 1% charge, but the pension plan AMC may be lower. If you are registered online check the unit history - if you see a set of monthly funds purchases, that will be a refund+reinvestment of the excess charge.

In my case the AMC is 0.45% on all investments (funds accumulated whilst my employer paid in, new regular & lump sum contributions, and transfers in.

My money is invested in 3 different SW tracker funds, and I'll be transferring in my current workplace pension if I leave my current job and the fund doesn't qualify as a "small pot"

Pochisoldi

[xxd09]

I found all Scottish Widows and their ilk to have a very opaque set of charges -no doubt on purpose to fool the average joe
That was back in the day-I hope it’s changed but I was pleased to leave them to go to more transparent outfits eg Vanguard funds and Interactive Investor platform in my case
xxd09

[starter]

I have a workplace pension with Scottish Widows

I also have a consolidated SIPP with AJ Bell

The charges for the first are a lot higher even after halfing them by moving from their automatic find to their UK tracker. I don't want to close the Scottish Widows fund as it is where my workplace pension goes. But I would like to move funds periodically to my consolidated fund to get the lower fees.

Is this possible and if it is possible, are there any stings in the tail?

Double check your charges for Scottish Widows.
In my case I stayed on the lower AMC that was put in place when the group pension was set up.

Their tracker funds have a 1% charge, but the pension plan AMC may be lower. If you are registered online check the unit history - if you see a set of monthly funds purchases, that will be a refund+reinvestment of the excess charge.

In my case the AMC is 0.45% on all investments (funds accumulated whilst my employer paid in, new regular & lump sum contributions, and transfers in.

My money is invested in 3 different SW tracker funds, and I'll be transferring in my current workplace pension if I leave my current job and the fund doesn't qualify as a "small pot"

Pochisoldi

Is this the Annual Management Charge? How do I find that out? I could only find fund charges (which I assumed meant that there were no other charges.

[pochisoldi]

Is this the Annual Management Charge? How do I find that out? I could only find fund charges (which I assumed meant that there were no other charges.

I think it is shown somewhere obvious when you log into your online account. I'm working away at the moment so I can't check.

In my case the reduced charge only applies to SW funds, not any external ones.

[starter]

So I got a reply today

There's some good news:

- Partial transfers are possible
- The AMC is only the fund charge, there's no bit on top
- My scheme has a 0.5% discount on the AMC charge

But my transfer from the approach scheme (pre discount value of 1%) to the tracker (0.75%) has not been actioned. I'm checking whether the discount applies to the tracker - as 0.25% although higher than my platform fees with AJ Bell and the 0.1% Vanguard charge would still be quite low and I may not partially transfer. But 0.5% would be big enough - particularly as salary sacrifice means I'm powering in the pension this year.

[pochisoldi]

Is this the Annual Management Charge? How do I find that out? I could only find fund charges (which I assumed meant that there were no other charges.

I think it is shown somewhere obvious when you log into your online account. I'm working away at the moment so I can't check.

In my case the reduced charge only applies to SW funds, not any external ones.

Can be found by...
1. Logging into your account
2. Click on the account number
3. Click on Policy Benefits

In my case it shows the Annual Management Charge for "Regular", "transfer value" and "single".

[Dany]

Yes, Scottish Widows allows partial transfers without leaving a minimum amount in the account. Another contribution must be received within 3 months of the transfer so that the account remains open.