protected rights restrictions lifted
I have written before about the consolidation of my various pension pots into a self-invested pension plan (SIPP).
One slight irritation was that the Protected Rights elements could not be transferred so I was forced to hold these funds in a stakeholder pension.
However, today I received an email from Sippdeal stating that the Government is lifting these restrictions and that, from October 1, protected rights contributions can be transferred into my SIPP.
staggering incompetence
And just this once, not mine. When you take out a Self Invested Pension Plan (SIPP), most SIPP schemes are unable to accept Protected Rights. Imagine my surprise, then, when Sippdeal contact me asking for authorisation to make a payment from my SIPP to Equitable Life in respect of a refund of Protected Rights payments that the Government are requesting, in turn, from Equitable Life. Equitable Life claim this refund is now very urgent because the original request was made in January 2006 and no response has been received. I ask Sippdeal why they didn't forward this original letter from Equitable Life to me in January. The answer was simple. Sippdeal did not receive any such letter from Equitable Life in January 2006. Sippdeal are efficient. Sippdeal communicate via email. Sippdeal send me copies of correspondence from Equitable scanned into a PDF. Sippdeal answer my emails promptly. Sippdeal are well informed and helpful. So I contact Equitable Life directly and ask them why a refund of protected rights contributions is required from a SIPP that was legally unable to receive any protected right contributions. Inevitably, after a lengthy delay and some 'research', it transpires the letter (both of them in fact) were sent to Sippdeal 'by mistake' and should have been sent to my other pension provider. I'm not sure whether my decision to consolidate all my pension plans into a SIPP was the correct one and whether my SIPP funds will outperform the fund managers in grey suits. However, for the pleasure of not having to deal with Equitable Life any longer (apart from the rare interruption caused by their unbelievable incompetence), I'm prepared to take my chances.my personal pensions crisis
Last week, I initiated the transfer of the last of my pension funds into my Self Invested Personal Pension (SIPP). This should be a relatively straightforward transfer of the Protected Rights element of a former pension plan. The first step was a response from the pension company receiving the funds. They need me to fill in a form explicitly stating that I did not request any financial advice about this transfer to guard them against mis-selling claims. It is ironic that the Protected Rights must be transferred into a stakeholder pension (and not my SIPP) as these contributions were made by the UK Government on my behalf so it must be entrusted to those sensible men in grey suits and not invested in the funds of my choice in my SIPP. Tell that to the people who lost thousands of pounds of their hard earned money that was supposedly secure with Equitable Life. However this is a minor inconvenience compared with the pain, delays, bureaucracy and sheer incompetence I suffered three years ago. After twenty years working for various IT companies, I had accumulated small pots of money distributed across a variety of pension funds. I decided to consolidate all of these pension funds into a self invested pension plan (SIPP). This was mainly so I had direct control over exactly where my money was invested and to reduce the impact of the management charges paid to the men in sharp suits. In a SIPP, you are charged for each share transaction. If you buy and hold shares for the long term, then the SIPP charges are much lower than a managed fund. In addition, one significant pension fund was invested with Equitable Life which was in dire financial straits, subject to a lot of negative media coverage and was closed to new business. So I wrote lots of letters, filled in lots of transfer forms, made lots of phone calls and opened an account with SippDeal. The transfers of seven different pension funds were all initiated around the same time (January 2003) and the final batch of funds were made available for trading in early July 2003. Once I learned how to play the game (write letters in the first instance, fill in the required forms promptly, take copies of all correspondence, telephone in the second instance, get names of the people you deal with, record the date and time, record what was promised, get a direct dial extension, keep comprehensive records), I found that most companies were relatively efficient in handling the transfer. However a dishonourable mention goes to Scottish Widows who really did plunge new levels of incompetence (letters getting lost, faxes getting lost, people promising to call back etc etc). Maybe I was unlucky but all I can say is that I am really glad Scottish Widows are not managing my pension any more. The SIPP appears to be performing really well as the funds are primarily invested in high yielding FTSE 100 companies. However, this may be misleading as the FTSE has performed well since January 2003. What I should really do is to compare the performance of my stakeholder (with the PR funds) invested by the wise men in grey suits against my SIPP. Maybe when the transfer of this latest pot is complete, I will do exactly that.
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