By the time we hit 40, most of us have been in several jobs. Often we were in company pension schemes for just a few years but never did anything about those pensions when we left.
One of the options when leaving a job is to leave your pension fund there with a view to perhaps reassessing the options when settled in the new job. Usually this means not really thinking about the old pension scheme for decades – or until a recession hits and suddenly every Euro becomes important. The options will usually be:-
1. Continue to leave the fund where it is, or
2. Transfer to your current company pension scheme, or
3. Transfer to a Buy-out Bond.
Deciding which is the best option is not straightforward, nor is it easy to get the required information from the trustees/former employer/life assurance company. You need to find out what kind of funds you are invested in, how those funds have performed relative to other funds and you need to find out about fund management charges and any covert charges. In my experience there is little or no attention given to the interests of ex-staff members in a pension scheme, so it is a bad idea to do nothing. Make sure your investment risk is spread over several suitable funds in accordance with your own risk profile, regularly review your choice of funds (at least twice yearly) with your broker and use the life assurance company’s online facilities in between reviews to keep an eye on what’s happening. It’s all part of good financial housekeeping.
Good Financial Housekeeping