It’s important to know the timeline and factors that can affect how long the switch takes. Understanding this process helps you make informed decisions and manage your investments effectively. At PensionBee, we prioritise customer protection and financial security in everything we do, including during the fund switch process.
Who manages the money in my PensionBee plan?
At PensionBee we’ve partnered with some of the world’s biggest money managers to provide our investment choices. Through PensionBee, you can select your own investment plan from our range of diverse and curated plans. Once you’ve chosen your plan, your money is then invested for you by one of our experienced money managers such as BlackRock, State Street Global Advisors or HSBC. Our money managers are collectively responsible for more than £10 trillion of investments between them, so no matter which of our pension plans you choose, you can rest assured that your money’s in experienced hands.
| PensionBee Plan | Money manager |
|---|---|
| Tailored Plan | BlackRock |
| Tracker Plan | State Street Global Advisors |
| Impact Plan | BlackRock |
| 4Plus Plan | State Street Global Advisors |
| Preserve Plan | State Street Global Advisors |
| Pre-Annuity Plan | State Street Global Advisors |
| Shariah Plan | HSBC (traded via SSGA) |
| Fossil Fuel Free Plan | Legal & General |
How do I switch pension plans?
When you have a live PensionBee balance, either from making a contribution or transferring your first pension over, we’ll usually automatically invest your funds into our default option, the Tailored Plan. However, if you’ve made another choice or signed up using a plan specific page, for example our Impact Plan, your funds will be automatically invested in your chosen plan.
Once your online account (known as your “BeeHive”) is set up, you’ll be able to request to switch to a different plan by logging into your account, either via our app or on our website, and going to ‘View or change your plan’. If your pension transfer has already been completed, you’ll be able to switch plans at any time by going to ‘Account’ and choosing ‘Switch plans’, then ‘See plans’ and following the options.
Timeline of PensionBee’s plan switch process
The plan switch process usually takes up to 12 working days. It’s important to note that our money managers trade daily on weekdays only. As such, weekends and bank holidays aren’t included in the timeline, which can add extra days to the process.
PensionBee pensions are made up of units. When you invest in a plan you purchase a number of units in your new plan. If your balance is £125 and your unit price is £1.25, you own 100 units in your plan.
The money manager, who handles the trading of your funds, has a short delay in updating and sharing the unit prices of your plan. This means the balance you see in your BeeHive on any given day is usually from two days before, which is common with institutional funds, such as the type offered by PensionBee.
When you decide to switch plans, there’s a delay in waiting for the new unit price. This means your balance can change again. Remember, unit prices go up as well as down, they reflect the health of the market on that day.
1. Requesting a plan switch
When you request a plan switch through your BeeHive, our automated system first checks if the switch can be accepted. If there’s no trade requests pending or in progress (from either a contribution, transfer or withdrawal) the process can begin immediately. If the request is made in the morning, this’ll happen on the same day. If the request is made in the afternoon, it’ll be processed on the next working day.
2. Leaving your old plan
We’ll send a trade request instructing your plan’s money manager to disinvest your funds. The next working day, the money manager usually begins disinvesting your funds from the plan.This process takes on average five working days to complete.
3. Receiving your cash value
Once completed, your old money manager will send a trade confirmation and the sale proceeds to our bank account as cash. During the disinvestment period your investment value remains the same, as it’s held in cash.
This means you won’t experience either stock market gains or losses. As a result, when you reinvest into your new plan, you’ll buy units at the market price of the day - which could be higher or lower than when you disinvested.
4. Entering your new plan
The next working day, we’ll process the funds received and send a trade request instructing the new manager to invest these funds. The new money manager will usually begin investing your funds the following working day. Again, this process takes on average three working days to complete.
5. Reflecting your plan value
Similar to disinvestment, your new money manager will send PensionBee a trade confirmation on the number of units purchased. We then update your daily units to reflect your new balance. Finally, the next working day, the fund switch is completed.
Why’s my switch taking longer?
Ongoing transactions can delay the fund switch process, such as:
- contributions;
- transfers; and
- withdrawals.
Any ongoing trades need to be completed before the transfer request can be sent to instruct the manager to begin the disinvestment or investment process. The majority of delays experienced in the fund switch process are caused by these ongoing transactions.
Any transactions received after the acceptance of your pension fund switch will be promptly invested into your new chosen plan, ensuring no delays in investments.
Is this timeline normal for investments?
The trading cycle for insured institutional funds, the type used at PensionBee, is longer than what you may see with Exchange-Traded Funds (ETFs). This is because insured institutional funds offer the highest level of protection from the Financial Services Compensation Scheme (FSCS), with 100% protection and no upper limit.
To ensure this protection, unit prices for these funds are updated retrospectively once a day based on the latest available price from the money manager. This slower trading cycle is different from ETFs, which are priced in real time. However, ETFs only offer £85k FSCS protection, making them unsuitable for customers moving away from insured workplace schemes that offer 100% protection.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
Last edited: 17-07-2024
