Group Personal Pension

Nowadays a number of employers offer pension arrangements known as group personal pension plans.

Group personal pensions (GPP) are a collection of individual personal pension plans grouped together by the pension provider.

GPP’s are similar to personal pensions, and are covered by the rules for personal pension plans (PPP). These were introduced in July 1988 as a replacement for the Retirement Annuity Contract.

When an employer arranges for a pension provider to set up a GPP, you may sometimes benefit from lower fees than those for individual personal plans, which means that more of your money is invested in the pension. With this type of pension the fund belongs to you and your employer normally contributes to the scheme.

These pension plans can be a good option if you frequently change jobs, as the plans can usually be taken with you to another employer. However, if your employer arranged any special benefits, such as life insurance, these benefits will cease when you leaves.

If you do leave the company, the contributions (whether made by yourself or your employer) will have accrued towards a pension fund, which belongs to you. You can usually take it you to your new employer, leave it in the group scheme until retirement, or transfer it to another provider.

It is always a good idea to take financial advice before considering transferring a pension, as there will usually be transfer penalties incurred.