Transfer problems

By THIS IS MONEY
Updated:

 

I recently changed jobs and transferred funds from my Prudential pension scheme to my new employer's scheme. The transfer value was £6,000 but the cheque sat on desks at my new workplace for three months. Only after that was I given details of where my transferred in funds would be invested. I was not happy with it, and asked for the funds to be returned to the Prudential. But I feel somewhat cheated by my new employer's delay in dealing with the funds, as well as their poor advice. I feel my funds within the Prudential may have lost some value. Can I ask my current employer for some compensation? PT, Basingstoke, Hants.

Jon Minchin, independent financial adviser at Pensionline says: You say you received poor advice from the employer but unless they are recognised as pensions advisers by the Personal Investment Authority you cannot complain about advice they gave you.

When you agreed to the transfer you would have signed a transfer discharge form with the Prudential so you are very unlikely to be able to transfer your £6,000 fund back there. You may be able to persuade the Pru to reissue your cheque to another approved pension arrangement but it is unlikely as the Pru's responsibilities towards you ceased when you signed the discharge form.

It looks as though you have only two options: either accept the investment choice your new employer's pension scheme offers or transfer your fund into a personal pension, but to do this you will have to wait until it is put into your new employer's scheme and then transfer out of it. Obviously this will mean paying more charges and it may be unwise to go this route without independent financial advice.

As for claiming compensation from your employer, try asking for a notional rate of interest to be paid on your funds for the three months your cheque was lying on desks.

The moral of the story? Do not agree to transfer your pension until you have full details of the scheme you are transferring into, because it is very hard, if not impossible, to throw the process into reverse.

All the above assumes your new employer's scheme is a money purchase scheme. If it is a final salary scheme it will not have made any difference how long your cheque lay around because your transfer benefits would already have been agreed.

Most watched Money videos