There are a few reasons you may want to move your workplace pension to a SIPP. It could be to consolidate previous pots into one place that is easy to keep track of going forward. It can be because you want more control over your investments and find your workplace plan menu limited and want more options. It could be to lower your (AMC) Annual Management Charge.
I am going to walk you through the process of transferring your pension/s I must warn that this guidance relates only to (DC) Defined Contribution pensions only and not to (DB) Defined Benefit pensions which may require financial advice and a big decision.
Most workplace pensions will have a big insurance company or financial institution adminstrating your pot. It is a good practise in advance to gain access to the online portal of your companies pension. You can usually sort this by contacting your companies Human Resources dept. This helps to keep and eye on your fund and transfer value. This can also be done by phoning the company also and asking for a up to date value quotation and a transfer pack if they offer one. A transfer pack can be useful if your plan requires manual transfer paperwork to be signed.
I think a good start is to call your staff pensions or Human Resources dept to ask if a full or partial transfer is an option and what are the rules. Typically if partial transfers are allowed there may be an amount you must leave in the pot to keep it open and active this can vary from £200-£1000. It is very important to not close your existing workplace pension plan down by fully transferring especially if you are receiving a company match on a monthly basis (you never want to turn down free money ever). The only exception to this would be if you have left the company completely and in that case a full transfer will transfer full amount out of pot to your SIPP and close it down.
OK so the first step would be to see if you can obtain a discharge form from your company. Complete and sign your part of the discharge form. The next step would be to contact your SIPP provider to request a transfer in this can be done by phone (for info only), online or by completing a SIPP transfer in application form.
Important: Please insure you send both your completed companies discharge form and the SIPP transfer in application form to your SIPP provider.
Now you need to be super patient and leave the two parties to work together. Typically transfers can take anywhere from 8 weeks to 12 weeks. If you are really lucky can be sooner. It can be a good idea to ring/email them both for a transfer status update and this may help speed things along again if lucky.
Some workplace pensions may allow you to transfer quicker electronically via ORIGO options but most will require manual transfer paperwork as mentioned above which is slower.
On the day of transfer is actioned there may a a bit of time where you are out of the market possibly from 3 days to a week. This can be a nerve wracking time as the market could move up or down during this period. If you transfer at a higher valuation and the market drops in the interim you can buy more units at bargain prices at the other side (if it’s in the same assets ie Equities and Bonds). The other scenario could be that you transfer out when plan value is down and the market moves up a bit in the interim than you will buy less units on the other side but still maintain the transfer out value at the time of the transaction. You can overthink this. It is standard industry practise for the pension provider to alert you if your plan goes down by more than 10% since the time they quoted your transfer value so this can be helpful if you are hesitant on waiting for the market to stabilise and your value to go up. Important to remember if your workplace pension investments mirror your SIPP investments they will move up and down fairly similarly.
If your transfer is taking too long and you feel you have lost out financially you can complain to whoever is to blame and if you are not happy with the resolution you have the right to bring to the attention of:
The Pension Ombudsman – 0800 011 3797 – https://www.pensions–ombudsman.org.uk
If you do have any questions about transfers please get in touch via our Contact Us page.