Whether to move Accenture Pension

[daraclare]

First off, please excuse my lack of knowledge around pensions, I've done some research but still have huge gaps in my knowledge when it comes to this topic.

I'd been advised that I can move my pension from my past employer, Accenture's pension fund, to a private one with Zurich. The idea being that I can access some of it if need be at 50, and would have more control over it. I find it very difficult to tell which would give the best return, I am 42 and have a very small pension, but I am assuming that it is more or less dormant when left in the Accenture passive pension.

Does anyone have any advice about leaving your pension with a company you have left? Any insight would be really appreciated.

 

[kevhenry]

This is a post I did in September.

Option 1: Leave Your Pension Where It Is

Advantages;

• Charges are likely to be lower in a large group scheme

Disadvantages;

• Any retirement options, including early retirement, are bound by scheme rules and require permission form the trustees.
• 65 is the standard retirement age for corporate schemes so that would be the earliest age you could claim benefits.
• Large schemes have limited investment options since they’re built for groups of employees, not individuals.
• Trustees are not obliged to keep in contact with deferred members.
• If the scheme is closed you could lose your accumulated rights if you are transferred out to a PRSA instead of the current PRB option.

Option 2: Transfer Your Pension into a Personal Retirement Bond (PRB)

Advantages;

• Full cash value is held under one single premium contract that is owned by you personally.
• Your accumulated rights are preserved i.e. all salary and service details are recorded which maintains your rights to the ‘lump sum only’ option.
• You can access your benefits from a PRB from age 50.
• You have full control over your money and the investment decisions.
• You can design a personalised, risk tailored portfolio that suits your tolerances, risk profile and long term growth goals.

Disadvantages;

• The annual management charges tend to be higher depending on the funds and/or assets chosen.

Option 3: Transfer Your Pension Into Your New Employers Pension Scheme

Advantages;

• You maintain full active control over your entire pension fund.

Disadvantages;

• You could lose the accumulated rights of salary and service built up in your old scheme.

So what should you do?
In most cases the best option will be the Personal Retirement Bond (PRB) since it;

• Maintains all of your accumulated benefits related to your salary and service.
• Allows you to manage your investment strategy
• Gives you complete control over your asset.

A Personal Retirement Bond allows you to assume ownership of your investment so you can manage it effectively, monitor how it's doing and make changes if required.

Leaving a pension behind means you'll always be wondering about it whereas a personal retirement bond puts you in complete control.

Kevin
www.thepensionstore.ie

 

[kevhenry]

Whatever you have in the Accenture scheme will remain invested in whatever fund/s you are in so it's not dormant so to speak.

It will remain invested in the markets and fluctuate in line without additional contributions.

It's true that transferring it into a PRB grants access at 50 but that wouldn't be a reason to transfer it in and of itself.

Kevin
www.thepensionstore.ie

 

[daraclare]

Thanks Kevin, I really appreciate that reply, especially having the advantages/disadvantages of both outlined so clearly. I suppose I'm thinking that Accenture might have a high return, but it's very hard to see the actual growth when using their dashboard tbh. It looks on one screen as if it's 40%, but obviously that would be insanely high, and I think I would have noticed.

 

[daraclare]

Hi, following on from my thread above, my Accenture pension was moved to a Zurich PRB, but the risk level I was moved to was much higher than I asked for, Level 5, when I asked for Level 3 risk — the levels are 1-5 with 5 being the highest risk. My question is, should I have moved to a level 1 risk while coronavirus is a factor? Any opinions / advice would be much appreciated.