The Pensions Office receives many different enquiries from people considering transferring their pension benefits away from a previous employer’s scheme. Some of these people have an outline idea of why they might prefer to transfer their benefits, such as:

                -                more tax free cash (often wanted or needed immediately); or
                -                taking immediate benefits (if the scheme won’t allow this); or
                -                providing for a higher level of death benefits; or
                -                taking personal control of investment strategy.

Probably the most difficult reason for The Pensions Office to deal with properly, though, is “I just want to break all ties with my previous employer”, or “I hate my previous employer”, or “I don’t trust my previous employer”.

Any one of these comments could be a good enough reason for the scheme member to consider a transfer of his benefits. Nonetheless, The Pensions Office feels obliged – almost invariably – to make proper enquiries to ensure that we can detail and quantify the risks in transferring benefits. In simple terms, where someone really does hate a previous employer it could make most sense to stay with the pension scheme…..this could cost the employer a lot of money in the long run!

So, how do we deal with this type of enquiry?

First, we conduct all necessary enquiries with the pension scheme member (that is, the person making the enquiry) and the pension scheme. We prepare a report and recommendation about the potential advantages and disadvantages of transferring benefits away from the existing scheme. If we recommend ‘don’t transfer’ and the  member agrees, that’s the end of the matter.

If the member accepts our report and reasoning but wants to transfer his or her benefits anyway, we will usually be happy to help, ensuring the transfer is made to an appropriate alternative pension arrangement. This type of client is known as an ‘insistent client’: someone who knows and understands the risks of a transfer, and the potential loss, but wants to proceed anyway.

Occasionally, though, we receive requests to transfer away from a previous employer’s scheme, even without investigating the advantages and disadvantages. The Pensions Office doesn’t usually welcome these enquiries as we feel strongly that the risks must be understood before proceeding. But sometimes there’s little or no choice. Perhaps a scheme has imposed a time limit on an enhanced transfer value being made available, or a lump sum cash ‘reward’ (‘bribe’) to transfer. Or perhaps the member is in very poor health and simply has to rush through the transfer to secure much higher death benefits from a personal pension.

We will try to help, whatever the query or request so, if in doubt…..