Can you transfer the RMPP to a SIPP?

[milly]

I am quite concerned about where the our money is invested as the bulk of it looks to be invested in Government debt which I believe is probably the worst place to be.
Also if I understand correctly our benefits are linked to RPI which would be good if they weren't capped at 5% when RPI is 11.1% currently.
I would much rather transfer the RMPP into my SIPP and leave it in cash until things become clearer.
And as for the new CDC Pension being invested in Net Zero it really beggars believe that the Trustees are risking our retirement on the latest investment Fad.

[RobertT]

You can transfer your RMPP(2012+) benefits into a SIPP if you choose to, but you're obviously giving up a guaranteed index linked income for life in return.

Cash will also be subject to inflation – it'll be going down in value!

It's the RMPP that have plans to go net zero!

[milly]

You can transfer your RMPP(2012+) benefits into a SIPP if you choose to, but you're obviously giving up a guaranteed index linked income for life in return.

Cash will also be subject to inflation – it'll be going down in value!

It's the RMPP that have plans to go net zero!

Cash will lose purchasing power due to inflation but I would rather be in cash than be invested in debt instruments.
Is it possible to transfer the RMPP?

[RobertT]

Is it possible to transfer the RMPP?

I've already said you can!

[milly]

Is it possible to transfer the RMPP?

I've already said you can!

Cheers!
If the increases are index linked but capped at 5% (subject to certain restrictions) when at the moment RPI is 11.1% then it's not really index linked.

[RobertT]

But the question you need to ask yourself is are you going to get a better return by transferring and deciding on your investments yourself?

Beating an inflation proofed DB scheme(albeit capped) is a very difficult thing to do over the long term. That's why most IFA's won't touch transfers with a barge pole, and you'll need an IFA if the value of your RMPP benefits is over £30k.

[Schiff]

Most IFAs won't touch these transfers with a barge pole for fear of being pursued for compensation down the line when the transferee realises that it is a bad deal.

Those few IFAs that will look at this will chrge many thousands of pounds for giving advice (due to high insurance costs if dealing with this kind of work) and will still only recommend transferring to a SIPP in very few limited circumstances. Planning to hold the money in cash in a SIPP certainly wouldn't get a recommendation to transfer.

In theory, having paid thousands of pounds for advice, even though that advice is not to transfer, an insistent client can still transfer out to a SIPP. In practice however, there are currently no SIPP providers who will accept such a transfer. Again this is probably due to the fear of being pursued for compensation down the line when the client realises that the transfer was a terrible idea.

[milly]

Most IFAs won't touch these transfers with a barge pole for fear of being pursued for compensation down the line when the transferee realises that it is a bad deal.

Those few IFAs that will look at this will chrge many thousands of pounds for giving advice (due to high insurance costs if dealing with this kind of work) and will still only recommend transferring to a SIPP in very few limited circumstances. Planning to hold the money in cash in a SIPP certainly wouldn't get a recommendation to transfer.

In theory, having paid thousands of pounds for advice, even though that advice is not to transfer, an insistent client can still transfer out to a SIPP. In practice however, there are currently no SIPP providers who will accept such a transfer. Again this is probably due to the fear of being pursued for compensation down the line when the client realises that the transfer was a terrible idea.

I thought as much, thank you.
Can I sue the Pension trustees if the debt instruments they have invested our Pension in blow up?

[Jefferson Starfish]

Most IFAs won't touch these transfers with a barge pole for fear of being pursued for compensation down the line when the transferee realises that it is a bad deal.

Those few IFAs that will look at this will chrge many thousands of pounds for giving advice (due to high insurance costs if dealing with this kind of work) and will still only recommend transferring to a SIPP in very few limited circumstances. Planning to hold the money in cash in a SIPP certainly wouldn't get a recommendation to transfer.

In theory, having paid thousands of pounds for advice, even though that advice is not to transfer, an insistent client can still transfer out to a SIPP. In practice however, there are currently no SIPP providers who will accept such a transfer. Again this is probably due to the fear of being pursued for compensation down the line when the client realises that the transfer was a terrible idea.

I thought as much, thank you.
Can I sue the Pension trustees if the debt instruments they have invested our Pension in blow up?

Royal Mail would be responsible for any shortfall in pensions, or if not, the pensions protection fund.

[milly]

Most IFAs won't touch these transfers with a barge pole for fear of being pursued for compensation down the line when the transferee realises that it is a bad deal.

Those few IFAs that will look at this will chrge many thousands of pounds for giving advice (due to high insurance costs if dealing with this kind of work) and will still only recommend transferring to a SIPP in very few limited circumstances. Planning to hold the money in cash in a SIPP certainly wouldn't get a recommendation to transfer.

In theory, having paid thousands of pounds for advice, even though that advice is not to transfer, an insistent client can still transfer out to a SIPP. In practice however, there are currently no SIPP providers who will accept such a transfer. Again this is probably due to the fear of being pursued for compensation down the line when the client realises that the transfer was a terrible idea.

I thought as much, thank you.
Can I sue the Pension trustees if the debt instruments they have invested our Pension in blow up?

Royal Mail would be responsible for any shortfall in pensions, or if not, the pensions protection fund.

If debt instruments blow up there would be no help from anybody as most if not all Pensions would be in the same boat.
Of course the government could print up a load of funny money to bail out Pensions but that would no doubt lead to hyperinflation.

[RobertT]

The sponsoring employer is responsible for paying the liabilities of their DB pensions. Most if not all DB schemes also pay a levy into the Pension Protection Fund, which is there to pay benefits when a company goes bust and can't pay out the pensions that were promised.

If the sh!t did hit the fan, there probably isn't enough money in the PPF pot to pay out the benefits of every DB scheme under it's wing, but then not every scheme will need to be bailed out.
Considering pensions are long term things, they'd have time on their hands for the investments to recover anyway.

All investments have some sort of risk attached to them and are cyclical to some degree, so if one asset class is doing quite well there's a decent chance something else won't be. 'Debt instruments' are no exception!

[milly]

The sponsoring employer is responsible for paying the liabilities of their DB pensions. Most if not all DB schemes also pay a levy into the Pension Protection Fund, which is there to pay benefits when a company goes bust and can't pay out the pensions that were promised.

If the sh!t did hit the fan, there probably isn't enough money in the PPF pot to pay out the benefits of every DB scheme under it's wing, but then not every scheme will need to be bailed out.
Considering pensions are long term things, they'd have time on their hands for the investments to recover anyway.

All investments have some sort of risk attached to them and are cyclical to some degree, so if one asset class is doing quite well there's a decent chance something else won't be. 'Debt instruments' are no exception!

The problem is that the investments in our Pension aren't uncorrelated, if and more probably when the debt bubble implodes it will take the much smaller stockmarket down with it.
Unfortunately the trustees are suffering from recency bias and it is highly doubtful that what has worked for the past 40 years will work in the future.
As an aside, it took the Dow Jones 25 years to recover from the 1929 crash.

[RobertT]

What makes you think the RMPP has invested in debt for the last 40 years? In the early 2000's as much as 80% of the investments were in equities!

Considering the RMPP has been closed for future accrual for over 4 years now, the investments just need to keep pace with inflation to be able to pay out everyone's benefits. That's not going to be easy with inflation so high at the moment, but these things are looked at over the long term, not over a few months or years.

Generally, the best way to make money from equities is from re-investing the dividends, rather than the headline share price. Therefore how long it takes a particular index to recover from a crash isn't necessarily relevant to whether your money increases or not.

[milly]

What makes you think the RMPP has invested in debt for the last 40 years? In the early 2000's as much as 80% of the investments were in equities!

Considering the RMPP has been closed for future accrual for over 4 years now, the investments just need to keep pace with inflation to be able to pay out everyone's benefits. That's not going to be easy with inflation so high at the moment, but these things are looked at over the long term, not over a few months or years.

Generally, the best way to make money from equities is from re-investing the dividends, rather than the headline share price. Therefore how long it takes a particular index to recover from a crash isn't necessarily relevant to whether your money increases or not.

I didn't say that the RMPP has been invested in debt for 40 years I said that it has worked for the previous 40 years, and past performance is no guarantee of future results.
During the 90's most of the Pension was invested in equities when we were in a surplus.
I am merely pointing out that we are in the biggest debt bubble in Human History and our Pension is invested in it!

[Woody Guthrie]

If it all goes that badly wrong there will probably be food and fuel riots and complete socio-economic meltdown possibly leading to violent revolution.

I doubt an SIPP or indeed a pension will be much comfort in that situation.
Perhaps invest in some long life milk, dehydrated food and a concrete bunker Milly.