AVC plan being moved, can i cash out?

S

superfan

Registered User
Messages
98
i got a letter last week stating that due to IORP II my employer has agreed to move my AVC to a new trust next month and my previous plan will be wound up. I don't need to do anything as the transfer will happen automatically but if i wish to make any observations to email them.
i emailed them enquiring as to my options if i do not wish for my plan to automatically transfer over and i got a reply saying "Any queries you may have regarding your AVC policy should be directed to your financial advisor who can discuss options available to you in relation to accessing your benefits."
they didn't answer the question i asked about not transferring over.

i don't have a financial advisor so was just wondering if anyone on here knows if i am within my rights to cash in my AVC plan seeing as the terms and conditions are being changed?
under my existing plan i can stop paying at any time but cannot access my funds until retirement but does this change things?
 
superfan said:
i got a letter last week stating that due to IORP II my employer has agreed to move my AVC to a new trust next month and my previous plan will be wound up. I don't need to do anything as the transfer will happen automatically but if i wish to make any observations to email them.
i emailed them enquiring as to my options if i do not wish for my plan to automatically transfer over and i got a reply saying "Any queries you may have regarding your AVC policy should be directed to your financial advisor who can discuss options available to you in relation to accessing your benefits."
they didn't answer the question i asked about not transferring over.

i don't have a financial advisor so was just wondering if anyone on here knows if i am within my rights to cash in my AVC plan seeing as the terms and conditions are being changed?
under my existing plan i can stop paying at any time but cannot access my funds until retirement but does this change things?
Click to expand...
No
You can only access the AVC Funds when you access your main scheme benefits.
All that's happening now is a purely administration change due to changes in pensions regulations.
 
If they're telling you you have a financial advisor then they must have looked at their system and there was one on it.

There has to be an advisor/agent/broker attached to the AVC scheme.

Ask them who it is and get their contact information. Then direct any queries you have to them. I'd be pretty sure they're getting paid to answer them.
 
It sounds like the AVC scheme is set up as a trust. You are a beneficiary of that trust and you are the beneficial owner of your AVC fund. But you don't control the trust, so the trustees can decide to move it to another provider without your agreement.
 
I'm not sure what AVC scheme means here, is this a regular company pension scheme - with AVCs, company and employee contributions, or is it just AVCs?

But I think the key phrase here is it's being wound up.

Despite not changing employment "being wound up" means you now have options to move the current fund to a PRB or PRSA. Your trustees/mastertrust should be ones telling you this as they know it better than anyone.

Talk to a pension broker as soon as possible, the short deadline here could be due to end of year, but could also be an attempt by your "trustees" to lose as little funds as possible to PRBs and PRSAs.

PRBs and PRSAs have pro's and con's - discussed elsewhere on the site - but common advice is if you've a reasonable fund is to move your pension into one of these when you have an opportunity - usually only when you move jobs - but also with a pension windup situation.
 
I guess on the specific question on cashing in. You should be able to move the funds to a PRB/PRSA but it will as far I know be linked to your current job in terms of when you can access it, i.e. I think you need to be over 50 and leave or retire from your current employer to access it.
 
thanks a lot for the replies folks, i'm completely in the dark about any of this stuff. this is not a company AVC scheme, i have a separate superannuation scheme with my employer and i signed up to this AVC scheme about 25 years ago. i can't recall if i knew at the time that i'd have to wait till i retired to access the funds but i know a few times over the years i've thought about stopping paying in to in but never actually went ahead and did it.
when i got this letter i thought (maybe innocently) that it is like when you're in a contract with a phone company for example and they change their terms and conditions so you can get out of the contact early without any penalty. i'm probably wrong but just thought i'd ask on here.
if there's no way of accessing the money early regardless of what i do i'll probably leave well enough alone but if i could cash out or move it to somewhere that would release the funds quicker i'd definitely explore that avenue.
i'm 50 by the way, 27 years with my current employer. there's a possibility of redundancy next year which i'll definitely be looking in to.
 
You do know that AVC stands for Additional Voluntary Contribution? That is additional payments to the scheme. It is linked to your main plan and has to be matured at the same time.

The change to master trust is a change at trustee level, nothing that would have ever bothered you before and I doubt will bother you in the future. Just keep paying into it, grow your pension pot and give yourself the option of early retirement in the future, should you want it.

Regards
Steven
 
superfan said:
i thought (maybe innocently) that it is like when you're in a contract with a phone company for example and they change their terms and conditions so you can get out of the contact early without any penalty.
Click to expand...

It's not the same thing. Your contract for your phone is between you and the phone company. The contract for your AVC scheme is between the scheme trustees and the provider company. You're only a beneficiary and the trustees are the ones that have the rights to make decisions. If you don't like a decision you can contact the trustees to tell them and ask them to change but I wouldn't hold out much hope that you'll get them to change course.
 
You must log in or register to reply here.
Back
Top