Charlie1962
New Member
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- 4
Hello,
From a previous employment, I have a matured €600K DC Pension with Aviva. The fund matured (when I was 60) and has been frozen at 0% interest for almost 2 years (I only recently discovered this). Shortly, I will be 62 and am employed with a multinational and only started contributing 8% to their Mercer pension fund (to match company contribution). Salary €81K, Family just reared, spouse also working. I hope to retire in 3 more years once 65 or 66 latest.
Situation: Aviva will NOT re-invest the €600K Matured DC Pension fund so it now lies dormant there.
Last week, Aviva provided a number of Retirement Options, the 2 most applicable are as follows:
I need to decide on Option 1 or Option 2 below:
Option 1 Take €150K now ( 25% TFL) and the balance ~€450K goes to an ARF/Annuity.
* Since I'm currently employed, my marginal tax rate is 40%, so I assume I will have to pay 52% tax on the yearly benefit from the ARF/Annuity.
* Possibly not logical, but my reluctances to go with Option 1 are as follows:
1/ To avoid eating into the ARF/Annuity Fund before actual retirement ie: Preserve its Value / longevity by pushing it out till I retire in 3 more years.
2/ Avoid having to pay 52% TAX on the yearly benefit.
3/ Will need to find a home for €150K TFL .... of course a nice problem.
Note: Currently, I've recently started contributing 8% into my latest Pension Fund to match employers contribution..
However, with the extra income from the ARF/Annuity perhaps I should increase AVC contributions if Option 1 is the choice ?
Option 2. Transfer the entire AVIVA €600K fund to another Pension provider under the open market option.
* In this case, perhaps I should transfer the €600K AVIVA Fund to my current employers pension fund.
Mercer is the provider and will support this. From a fees/cost perspective, I assume this is the best ?
* This should bring a very low growth for €600K over the next 3 years (due to the very short timeline involved), until retirement at 65 but hopefully provide
some benefit rather than leaving it Frozen/Matured at 0% growth ?
I think Option 2 may be the best but would welcome your inputs as there must be some key facts / inputs i'm missing.
Thank you in advance for your inputs and corrections.
From a previous employment, I have a matured €600K DC Pension with Aviva. The fund matured (when I was 60) and has been frozen at 0% interest for almost 2 years (I only recently discovered this). Shortly, I will be 62 and am employed with a multinational and only started contributing 8% to their Mercer pension fund (to match company contribution). Salary €81K, Family just reared, spouse also working. I hope to retire in 3 more years once 65 or 66 latest.
Situation: Aviva will NOT re-invest the €600K Matured DC Pension fund so it now lies dormant there.
Last week, Aviva provided a number of Retirement Options, the 2 most applicable are as follows:
I need to decide on Option 1 or Option 2 below:
Option 1 Take €150K now ( 25% TFL) and the balance ~€450K goes to an ARF/Annuity.
* Since I'm currently employed, my marginal tax rate is 40%, so I assume I will have to pay 52% tax on the yearly benefit from the ARF/Annuity.
* Possibly not logical, but my reluctances to go with Option 1 are as follows:
1/ To avoid eating into the ARF/Annuity Fund before actual retirement ie: Preserve its Value / longevity by pushing it out till I retire in 3 more years.
2/ Avoid having to pay 52% TAX on the yearly benefit.
3/ Will need to find a home for €150K TFL .... of course a nice problem.
Note: Currently, I've recently started contributing 8% into my latest Pension Fund to match employers contribution..
However, with the extra income from the ARF/Annuity perhaps I should increase AVC contributions if Option 1 is the choice ?
Option 2. Transfer the entire AVIVA €600K fund to another Pension provider under the open market option.
* In this case, perhaps I should transfer the €600K AVIVA Fund to my current employers pension fund.
Mercer is the provider and will support this. From a fees/cost perspective, I assume this is the best ?
* This should bring a very low growth for €600K over the next 3 years (due to the very short timeline involved), until retirement at 65 but hopefully provide
some benefit rather than leaving it Frozen/Matured at 0% growth ?
I think Option 2 may be the best but would welcome your inputs as there must be some key facts / inputs i'm missing.
Thank you in advance for your inputs and corrections.
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