Merging two inactive pension schemes

W

witold

New Member
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3
Hi,

I have 2 old pensions schemes from my previous employment, lets call them A and B.
I also have a scheme with my current employer, lets call it C.

Can I transfer A to B or B to A?
Reading around would suggest that transfer can occur only into an active scheme, so A -> C or B -> C in this case.

I rang the company managing B, and was told that it's possible to transfer funds into it, only to have the transfer fail few weeks later, where I was told that it's not possible because it's not an active pension.

Apologies if this question was already asked, I could't find it.
 
Why do you want to transfer the two pension schemes?
What kind of pension schemes are they ?
How much are they worth at the moment?

Having 3 separate pension schemes means that you have more flexibility in when you take the pensions benefits
 
To add to @jpd's questions, what charges apply on the two pensions?

I agree with @jpd's point about pension "fragmentation" possibly offering additional flexibility that may not be available if some or all of the pensions are merged.
 
Thank you for your questions.

I wanted to merge into B, because it has better fund selection.
A allows mostly some ESG type nonsensical funds.

In addition, B has some Employer contributions that I will loose, because I'm under 2 years of service period.

I actually don't know what type of pension schemes they are - I assume it's Occupational pension - Defined contribution?
60k in A, and 12k in B.

Regarding the fees, I have no clue, I would probably have to ring them up and ask.
 
You should at least clarify what nature of schemes they are, what the charges are, and what fund options there are before doing anything.

It's not necessarily a no-brainer to merge different pensions and it may actually be detrimental to do so. So merging should only be done if there are clear and compelling reasons for doing so.

I don't understand the point about losing employer contributions on pension B? When/why might this happen?
 
Fortune said:
I presume they were in that job for less than 2 years
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But if that's the case and the employer is clawing back their contributions then this is going to happen anyway and is surely irrelevant to the question in hand of if/why/when to merge pensions?
 
ClubMan said:
But if that's the case and the employer is clawing back their contributions then this is going to happen anyway and is surely irrelevant to the question in hand of if/why/when to merge pensions?
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If you transfer in an earlier pension, that employment is added to the later employment and will bring the total service over 2 years allowing OP to keep the employer contributions
 
Fortune said:
If you transfer in an earlier pension, that employment is added to the later employment and will bring the total service over 2 years allowing OP to keep the employer contributions
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Ok, thanks. So that could be a specific reason in favour of merging these two pensions?

This is why it's important to tease out all the issues to understand all of the factors and pros/cons in other to decide what, if anything, should be done.
 
My view is that its better to transfer to the one employer if the current one has a DB scheme. Then in the event of the employer 'buying you out' into a DC scheme, the premium will be on the higher combined value. If the current scheme is DC, then this is a moot point.
 
But does the former ever happen nowadays?
 
Fortune said:
If you transfer in an earlier pension, that employment is added to the later employment and will bring the total service over 2 years allowing OP to keep the employer contributions
Click to expand...

But the OP said that the administrators of Pension B have already refused to accept a transfer, which they are entitled to do.
 
Once you are no longer employed by by a particular employer, it would be unusual for the trustees/administrators of that employer's scheme to accept a pension transfer in respect of you from the scheme of a different former employer of yours. No harm in asking, but the answer is likely (as in this case) to be "no".

If OP wants to consolidate his retirement savings in one place, he can transfer from both scheme to a PRSA of his own choosing. But he should look carefully at the cost structure of the PRSA and, the younger he is, the more carefully he should look at it.

He has the option of consolidating instead by transferring from both schemes to the scheme of his current employer. Obviously we don't know the terms, conditions, investment options, etc offered by his current scheme but, as regards costs at least, there is an excellent chance that a transfer to this scheme would represent better value than a transfer to a PRSA. But don't assume that this is so; check.
 
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If you've already left employer b, I would expect with less than 2 years service you've already lost those er contributions. Thr time to merge to bump up your service was before you left.
 
TomEdison said:
If OP wants to consolidate his retirement savings in one place, he can transfer from both scheme to a PRSA of his own choosing.
Click to expand...

Current rules on transfers to PRSA from Occupational Pension Schemes here

Even if OP could, they might find better value in transfering both to Pension Retirement Bonds (both with one provider) but I'd find out current AMCs first, then get a price on AMC for the PRBs and then weigh up if it makes sense or not.
 
It is quite difficult to consolidate occupational pension schemes. The easiest way to do it is to transfer them into an active one. An administrator won't allow a transfer into an old scheme.

The other route is consolidate into a PRSA but unless the scheme is winding up or the value is less than €10,000, you have to get a comparison of benefits carried out which costs €1,500 for each one.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
The main decider on whether to merge pensions should almost always be fees.
On 72K over 20 years the difference between a scheme with a fee of 1% vs a fee of 0.5% will be ~ €22,789

All the other factors (fund choice, flexibility, ease of managing less schemes etc.) should only become serious factors if the fee difference is negligible (0.1%).
 
Thank you all, I really appreciate all the input, given how little details I've provided.
To clarify, yes, I wanted to merge to have a better investment options and to merge the service period to hold on to the employers contributions.
I didn't realize that fees would play such a significant role, so thank you for that!
I will examine all the fees and decide if it makes sense to merge with my current scheme.
Thank you again for all the information.
 
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