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Just wanted a bit of help with an old company pension plan.

 

Owned a Ltd company but it was dissolved ages ago.

 

Had set up an executive pension plan.

The company was just me - so I was only going to be the sole beneficiary upon retirement.

 

Now as the Company is dissolved there is effectively no-one to sign any retirement claim documents.

 

The pension firm says I need to apply to be the new plan trustee

- and it will then give me powers restricted to paying the benefits from this plan.

 

But the appointment only lasts for 9 months - and the benefits will need to be dealt with in this time.

 

What exactly does that mean?

That i only have 9 months to decide what to do with the fund?

what does 'benefits' mean? - all the money or just some?

 

Received letter which gives me 2 choices:

wish to be appointed in order to take my benefits with 9m appointment period

wish to be appointed in order to transfer my benefits to an alternative arrangement within the 9m appointment period

Im a bit confused by it.

 

Are they giving me the option

- as a temporary trustee

- to decide what to do with the fund?

 

ie transfer to a new pension company,

self-administer,

take some money out early (if eligible) or to just leave it with them to continue as normal?

 

I just don't get the 9 month limit?

 

Surely I would have to remain the Plan Trustee forever if the company doesn't exist anymore?

Or am I missing something?

Edited by dx100uk
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Who's the pension firm please, HPM and what's the job title of the person you're dealing with?

 

HB

Edited by honeybee13
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Illegitimi non carborundum

 

 

 

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Thanks honeybee

Zurich.

It's a cust serv letter! Doesn't give title or position of sender

 

I initiated phone contact due to being sent the usual annual policy unit value update.

I wanted to ascertain some details - which did include transferring it, self-administering and the value to take it all out with/ without deductions. And also wanted to know what happens due to Company dissolved.

 

I spoke to someone in the Executive Plan dept. He advised that I needed to resolve the issue of Trustee.

And sent me a form to fill in entitled - tax-free cash entitlement.

 

However, I don't think this form deals with the Trustee issue (of who has authority over the money) rather just how much I can take out, dependent on last few years income in the Ltd Co.

 

On the phone the man asked me to locate old tax returns.

He mentioned

- and it is also written in the notes attached to the form he sent

- that the law changed in 2006 to restrict tax-free cash being taken at retirement to 25% of final value.

 

Prior to 2006 he and the notes say people (me?) may have been entitled to a greater % of tax-free cash and they can help retain this entitlement.

The Company was dissolved before 2006.

 

I do have all tax returns in storage so, once found the boxes, I can find this info.

This man has obviously highlighted my Plan which I guess is why cust serv have subsequently written.

 

I'm just confused as to what I really should be doing?

Especially if there is a time limit of 9 months?

And also who becomes the trustee if my appointment is only temporary?

Or is this temporary trustee appointment only temporary if the Plan remains with current company?

Or do I need to appoint a 2nd trustee anyway

- someone who can handle the benefits for (as yet unnamed/listed) dependents in the future? (And for whatever pension firm is handling the fund)??

 

The other issue is whether I take some £s out now early?

I've been told I can - with no penalties.

This would be very useful now...

 

Thanks

Edited by dx100uk
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Thank you for that.

 

Have Zurich spelled out your options in writing? I wouldn't want to do anything on the strength of a phone call.

 

Have you asked them why there's a 9 month limit on being trustee?

 

HB


Illegitimi non carborundum

 

 

 

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Thanks

This is fresh enquiry/receipt of letters so haven't replied to them about the 9 month query yet.

But the form that was attached to the cust serv letter was entitled The Pensions Regulator.

Altho it was the type of letter anyone could type; it wasn't a letter head from an official body.

 

The cust serv letter says they are happy to apply to the pension regulator on my behalf to appoint new Plan trustee/s.

They say it could take 2 months.

 

Further they will ask the Regulator to appoint me as Plan trustee with powers restricted to paying the benefits from this plan only

- and the appointment will be valid for only 9 months.

They don't specify if it is their time limit or an official stance from the Regulator?

 

Their letter also covers if I am a criminal etc

I guess one question is - can I write directly to the Regulator?

Any ideas on the time limit?

 

Just one other question:

Is it possible to get a breakdown of where the units are invested?

 

My Plan is split into 3 areas ie managed, equity, fixed

(I think) but I have no idea of the exact funds the units are invested in.

 

I guess this is pretty normal for most people

- they invest in a pension and let strangers, supposedly professional, well-informed advisors in the pension firm, invest in what they think is best for the fund.

I'm not an expert but I am beginning to think I'd like more control over my fund and it's future value. (Sipp?)

 

I just had a look at the Regulator site

- there doesn't seem to be anything about a 9 month time limit.

Altho they have a long list of requirements for someone to become a trustee.

Edited by dx100uk
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There's no reason why they can't send you a statement of what your funds are worth and where they're invested.

 

If you're looking at SIPPs, have a chat with one of the providers. Hargreaves Lansdown have a good helpline. They may well know about exec pensions too.

 

I don't understand the 9 month rule either, I suggest you ask Zurich.

 

HB


Illegitimi non carborundum

 

 

 

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Hi.

 

I've spoken to someone who has dealt with exec pensions [EPPs] in the past.

 

As they see it, the Pensions Regulator is offering you a window of opportunity here. They suggest you ask Zurich if, once you became trustee, it would be possible to assign the EPP to yourself and give you control. If you're able to do that, then you can decide whether to leave the investment with Zurich or move it elsewhere.

 

The other thing is that if you speak to Zurich, don't be frightened to say you don't understand what they've told you and make them go over it again. :)

 

HB


Illegitimi non carborundum

 

 

 

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Yes, you have been given a window to wind up the affairs of the pension trustso if you arent going to retire immediately you need to find somewhre else to put the money or you will be taxed to death on it as it will be treated as income. If you are retiring you can move it to another place where it will be transferred as is rather than treated as cash or income so you can then defer having to make a decision up until you reach the age of 75 if you wish

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Hi

I needed to deal with a really pressing issue this last week, so sorry I have not moved forward at all.

 

I'm not of retiring age - actually don't have anything to retire from! But Zurich have said there is no fee to pay if I transfer the full amount elsewhere.

I think you are right - I will call them and ask them to explain clearer.

The only thing I did manage to do is dig out the last 6y of tax returns - which apparently I need to ascertain if I can take 25 or 40% tax free. The Company was dissolved before 2006. The rules on how much is tax free changed in 06.

One thought I have - they said I need to give them the last 4y before Company dissolved.

The last couple years my income was lower; the first couple years my income was higher - which will they look at? An average of the 4y? What it was before I started to wind the company down? Or the higher income?

 

I will have more time after Tuesday (I hope)

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the pensions law changed in 2010. as for digging out old tax returns the amount you tan take tax free will be determined by this year's income, not what happened in the past. all you really need to know is how much is in the pot and what rules the scheme have that might prevent you from taking it . cant say why zurich need old tx returns, suppose to make sure that tax claimed back by scheme was actuallt=y due in the first place

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Zurich told me that after 2006 you can only take 25% tax free. But if you were a 40% tax payer before 06 then you may be able to take 40% tax free. My company was dissolved prior to 06 - which is why Zurich asked me to retrieve old tax returns. Zurich said the pension policy only relates to this company and me and by my income before and when the company was dissolved.

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that doesnt make the slightest bit of sense. what was what then is not relevant if you have a pension pot it is the current law that counts. What you have is trouble with the lack of trustees to look after your pot and make decisions as to waht to do with it. Now, if they are saying that the amount added to that pot by the govt based on the tax refunded on the money invested at the time is difficult to calculate without the figures that would make sense but let us assume you cant find the tax details. As a minimum it will be 20% more than you paid in and a bit more if you contracted out of SERPS. but they should know how much you paid in and how much you got paid by Govt as tax relief on that money and where it was invested so they should know what that return on investment less any costs is. That is what they get paid for.

 

You can only take 25% tax free now and you cant take it untill you are 55. Once you get to 75 you have to take the casjh or buy an annuity, you cant invest it any more As you werent of pensionable age in 2006 it is all irrelevant saying what could ahve happened then. I suspect they are just trying to find reasons for not doing anything whislt covering their backsides. If you cant force any sense out of them go to the Pensions Advisory Service, a free to use governmental organisation who deal with these things. the PAS cant tell you where to invest or when to take your pension but they do know all about the various schemes adn the legal mechanics of doing the various options and this advice is free. If they tell you that you can do something and Zurich then refuse to let you the you can take the matter to the Pensions Ombudsman, who will give them a chinese burn until they do as they are told

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My head is exploding with other issues. Sorry I can't deal with this now.

This is an executive plan pension with an early age optout. Not my Govt pension.

I will speak to Zurich again. They were helpful when I first spoke to them.

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Have you asked Zurich to put what they're saying in writing? You can't possibly follow something you haven't been trained in on the phone.

 

HB


Illegitimi non carborundum

 

 

 

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Hi

Zurich have sent 2 letters - one which outlines the 9 month period as Trustee which will give me the time to decide what to do with the fund / one which wants the tax return details of the last 4y of employment within the dissolved company. The latter advised that prior to 06 people could take out 40% tax free if their income was such. This bit is kind of incidental - other than in would be nice to withdraw a large tax free sum soon-ish - I'm more concerned about figuring out what to do with the fund and if I can use it better than Zurich?

I need to get through this week's pressing difficulties first. If I have a moment I will try the company you HB suggested. And I will speak to Z again

Thanks

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we know this.

My head is exploding with other issues. Sorry I can't deal with this now.

This is an executive plan pension with an early age optout. Not my Govt pension.

I will speak to Zurich again. They were helpful when I first spoke to them.

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as for the advice about withdrawing money back then- you couldnt and didnt so all irrelevant.

 

The law as it stands applies to all so it is 25% of anything you withdraw is tax free.

Only applies if you are over 55 and under 75.

 

You can transfer the whole lot out of the fund into another fund and wont pay tax.

 

If their rules allow it you can take a partial withdrawl and keep the rest there or transfer the rmainder to another fund.

Certain funds do not allow a partial cashing in.

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I have applied to the regulator to become Trustee of the epp.

 

I also got a financial advisor involved to assist me through the process of what to do with the epp and what can take out/ reinvest.

 

Hopefully, now the ball is rolling in terms of being a Trustee of the dissolved company pension fund, what I can and can't do - and when - with specific reference to the terms of this epp pension - will become clearer.

 

fwiw - when set up it was possible to elect a retirement age below 55...

 

I will keep updating. I think my experience may help others in similar situations.

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Retiring before you are 55 is always possible( fund rules a dependent) it is just you lose all of the tax breaks so as soon as you take a penny it counts as income for that year and you could end up with a tax bill of 55% of you total income for that year. then the tax computer assumes that you are earning this much every month and you take another year being taxed at 55% to get back to square one.

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I just thought I would add a little update here.

 

As it happens :-) :-) I had a really rare executive pension plan which enabled me to take - very early - all the money out of the fund, transfer it all into a S32 pot in a new pension company.

I could then take out the tax free lump sum that the original fund had calculated and agreed - based on my previous income/ tax returns before 2006.

The outstanding amount then got transferred to a separate fund within the new Pension Company - to an assortment of investments which my financial adviser recommended - and this will form part of my retirement fund for when I am much older.

What I have done has given me more control over "my money". I have tailored the investments based on current funds and performances; not those of many years ago when I took the original fund out.

 

There is the opportunity to switch from this fund again and self administer - which I potentially can do when I have more time and mental focus to over-see.

I hope that this intervention will prove lucrative....

 

The whole process was quite long-winded and eventually took almost 6 months from enquiry to receipt of funds.

Happy that I persevered :-)

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