How and when to transfer a pension plan?

Transferring a pension plan from one bank to another is a simple procedure that does not entail any associated management costs: it is free by law. As for the best time to make the transfer, it will depend on the profitability, the conditions of the long-term contract or if there are ties such as the obligation to link our pension plan with other products of the bank.

Transferring a bank pension plan has no cost. By law it is a completely free management. With the help of a pension plan comparative and knowing that this service is free, savers have it easier.

Can I change my pension plan?

Can I change my pension plan to another bank? How to change my pension fund? These questions have surely been asked by more than one person who is thinking of changing their pension plan to another entity. When asked if a pension plan can be changed from one bank to another, the answer is YES. It is important to note that it is a simple and free management by law.

Points to assess when transferring our bank plan

Before starting the transfer of the pension plan and signing a new contract with another entity, we must assess some important points.

  • Study the advantages, disadvantages and offers in pension plans that we will have when migrating from a bank. Advantages that can be higher profitability, better profitability or a promotional gift. On the other hand, the drawbacks may be the loss of knowledge and trust, or the personalized treatment with the usual entity.
  • Analyze the conditions of the new contract since many of them rely on a hook offer that, in the long run, is not profitable. For example, that they offer us a high return on our savings for a short time or free commissions only the first year.
  • Find out about the possible ties, that is, if when contracting a pension plan with another entity, we must link it in a mandatory way with other products of the entity that force us to remain subject to it, losing other market opportunities.

How to transfer a pension plan to another entity?

To change a pension plan to another entity, it is necessary to follow a series of steps :

  1. First, we must request the pension transfer to the bank to which we are going to take our plan. To do this, we must provide the name of the pension plan and accredit ourselves as a participant.
  2. This request will be handled by the new entity, which must request the transfer request from the original bank.
  3. The legal deadline for the transfer of pension plans is two business days to communicate it to the old entity. This entity will have a maximum period of five days from receipt of the communication to carry out the transfer. It would take approximately 10 days to have the money in the new pension plan.

In the case of wanting to make a transfer to a pension plan of the same entity, we only need to indicate in the request the amount that we want to transfer, the current product and the destination plan. Our bank will have to issue the transfer order within three business days from the submission of the request.

Advantages of changing a pension plan

One of the fundamental advantages of changing a pension plan is, as we have already mentioned, that it is a procedure that does not involve any expense. In addition, when the transfer of the pension is carried out, the tax advantages are maintained. This means that the necessary transfers can be made without any limitation. When making a transfer, it is not taxed until the money is redeemed.

Transferring a pension plan allows you to move from one plan to another with freedom of movement in accordance with changes in the markets and the investment profile of each person.

Is it difficult to transfer a pension plan to another bank?

In addition to being a free procedure, it is very simple and does not require much effort on our part. Most of the entities offer many facilities to transfer their financial products from another entity, taking into account that they struggle with the laziness that many savers have to start the search for a new product.

The new entity usually takes over the migration of our plan. It will only be necessary to present the data of the old plan to the new entity, and sign a transfer order from the old pension plan to the plan that has been chosen. After a couple of weeks, the change will be effective.

The importance of comparing before deciding

As with any financial savings product, before asking yourself “Should I change my pension fund?”, the possible market options should be thoroughly studied, comparing them with our current pension plan. A pension plan is a long-term savings product, so our long-awaited and well-deserved savings after retirement will depend on our current decisions.