Nowadays, it’s a common thing for people to go from one company to another after a few years of service. Relocating abroad for work is also a typical decision although it’s something that presents a number of complications. In such instances, people usually abandon their pension plans with their old company. They start another one with their new company. But it’s important to remember that after leaving the old firm, it’s no longer possible to make contributions to the old pension scheme. This usually leads to a frozen pension. If one has changed jobs on a regular basis, it’s possible to have multiple pension plans that are frozen. The problem is it’s not that easy to unfreeze old funds because there are some policies and restrictions involved.
To unfreeze a frozen pension or deal with the old pension scheme, here are some possible options to try:
• Integrate the funds. With the help of a solicitor or pension plan service, unfreeze the plan. Afterwards, integrate the funds into a personal pension scheme to restart payments.
• Transfer the funds. Again, with the help of a pension company and its service, unfreeze the old pension plan. Then transfer the funds to the new pension scheme. After the move, keep on making contributions.
• Buy out the funds. A policy referred to as the Section 32 Buy Out enables a policyholder to buy out his old pension plan with the help of an insurance firm. The insurance company will then “own” the plan until the policyholder pays the necessary contributions.
• Leave the funds. If the funds are measly and processing to unfreeze it isn’t worth the trouble, just forget the funds and keep them frozen.
Before coming up with a final decision on how to deal frozen pension, it is always wise to ponder the pros and cons of each option. With the help of a financial adviser or a firm that handles pension concerns, coming up with a final decision without worries is possible.