Should I transfer to Clerical?

By THIS IS MONEY
Updated:

 

The company I work for has a company pension scheme with Equitable Life but has not started a new scheme with Clerical Medical. I am 38 years old and the plan has a retirement date of 2028. Should I transfer my fund to Clerical Medical in spite of the 15% transfer fee currently being imposed by Equitable? T.J. Rotherham

Ben Yearsley, investment manager from independent financial advisers Hargreaves Lansdown says: There are too many variables to make a sensible decision at this stage on transferring your pension money held in the Equitable Life with profits fund. These include the future vote on the question on the guaranteed annuity rate, the performance of the new Halifax Equitable sales force and other legal action.

If you were to transfer the money into Clerical Medical funds now, your pension in retirement would be solely reliant on the future performance of the Clerical funds making up the shortfall left by the 15% transfer fee.

But you can pay your future contributions into another fund. Is your Company scheme with Equitable a Group Personal Pension or a Contracted-In Money Purchase scheme? If it is the latter then since beginning of May, the scheme could have elected to divert contributions previously being made into the Equitable with profits into the Clerical Medical with profits fund (Group Personal Pensions are still being directed into the Equitable with profits fund).

If you are in either type of pension then future contributions can be diverted into a number of Clerical Medical unit-linked funds, which are good value for money.

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