Options for small DC pension fund after leaving job

Protocol

Registered User
Messages
4,255
A pension advisor has offered 4 options regarding what to you with a small (approx 20k) DC fund after leaving employment. These are:

1. A deferred pension payable from 65 based on that value in the fund at that time.

2. A transfer to a similarly approved pension scheme with your new Employer.

3. A transfer to a Personal retirement bond (PRB) in your own name

4. A transfer to a PRSA

The recommendation is option 3 for these reasons:

"· The policy will be issued in your name and belongs to you which means that your previous employer and the pension Trustees have no further involvement. You can choose when you take your benefits which can be at any time from the earliest date retirement was allowed under your company pension (normally age 50). You could choose to take the benefits as late as age 70 if you were still working.

· You now have a pension vehicle that you can access money from regardless of any other pension scheme you join in the future.

You can always transfer from your PRB and into your current employer. You would then be governed to the rules of that scheme regarding drawdown age. I don’t ever see myself advising you to do this down the line but the option is always there."

These reasons seem fair enough. There is no current employer, but person may return to employment in the future.

Has anybody any advice?

Is there any advantage/disadvantage of PRB versus PRSA?

Thanks.
 
Is there any advantage/disadvantage of PRB versus PRSA?

I wrote on this a couple of weeks ago,

http://www.bluewaterfp.ie/pensions-2/the-difference-between-a-prsa-and-a-buy-out-bond/

I always think it's a good idea to get the fund into your own name. You have complete control over the fund and don't have to keep track of where your previous employer is. If you worked for a small enough company and you are young, there's a good enough chance the company won't be around when you come to retire. It's a nightmare getting the paperwork ready in such cases. Better just have everything in your own name.

One reason to transfer retained benefits to a new employer scheme is that the vested period transfers across too. If you have 2 years pensionable service in the old scheme and transfer into new plan, you are entitled to the employer contributions from day 1.

Steven
www.bluewaterfp.ie
 
Great information thank you SBarrett.

I am wondering if I collect my Personal (Small) pension from age 50 years old (Currently 43) and get a few thousand a year. Would it be taxed as income in Ireland or would I pay here in Germany where I live? Is there a tax free allowance for non residents? I also have a property rented out in Ireland which I pay 20% tax on rent taken.

Thanks in advance :)
 
Back
Top