Today it is no longer the case that many people remain working for the same company throughout their working lives.
It is therefore increasingly important to make sure you are fully aware of the options you have for any company pensions you may hold with different employers.
When joining a company you may be presented with the option of joining your new employer’s pension scheme. There are many different types of company pension schemes and depending on the type of pension scheme and its rules, it may be possible to transfer your previous employers’ pension scheme into the into the new one.
This has the advantage of keeping the pensions in one place however, there may be penalties incurred by transferring your old scheme, which would mean that it would be beneficial to leave it with the old employer.
At present, many pension schemes are unsure if they can accept a final salary transfer as there are legal issues, which prohibit the new plans accepting all the members’ pension benefits. This can sometimes result in difficulties with the transfer and some schemes will not allow them.
When a scheme does permit a member to transfer an old pension into their scheme sometimes they will stipulate that the transfer is processed within a set period of time, for example, within one year of joining the scheme.
If a scheme does allow transfers into their plan, it is advisable to fully compare the new plan against the old scheme as benefits vary widely between plans.