options for executive pension plan

hi . i have a boi executive pension plan i took out in 1993 & contributions stopped in 2004.
Company ceased trading in 2003.
Current value 40k
They've offered a lump sum of 10k & €90 per month or €125 per month with no lump sum.
Another option is 10k lump sum & transfer bal to an ARF.

Looking to find out what is best or is there any other option i can pursue ?
Can I access the full amount. ..cancel the plan altogether?

Thks.

You could look for a better annuity rate with another insurance company. Unfortunately, there isn't one central place to look, it's a matter of shopping around.

If you do not have a guaranteed income of €12,700 per annum, you have to put the money in an AMRF, where you can only draw down 4% of the fund each year (still more than the annuity).

The fund is just about too big for you to be able to draw down the lot as a trivial pension.

Steven
www.bluewaterfp.ie

Ger,

You 'took out' the pension in 1993 but that doesn't mean the company was formed then so your service with the company might be much longer than 10 years.

Contact the insurance company and tell them to work out what your tax-free-cash entitlements are based on your actual years service in the company and your 'final' salary (adjusted for inflation) which can be the average of your best three consecutive years in the last 10 years of employment.

It may well be that the tax-free-cash amount based on this calculation is higher than the €10K on offer.

If it is, it's very poor form from the insurance company if they haven't highlighted this for you in an obvious manner. They may have their ass covered with some line about getting advice though.

thanks for the replies!

just wondering if I'm better off leaving it there til I'm 65 (original maturation date) in 4 years time....would it make much of a difference or is the fact that I'm looking to cashing it in now affecting what I can get ?

also re. length of service. ..can't do anything about the 10yrs !

seems like boi are the only winners here...it'll take a hell of a long time to get the value of the fund @ €90 a month unless I live to a 100 !!

ger keogh said:

...it'll take a hell of a long time to get the value of the fund @ €90 a month unless I live to a 100 !!

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You will probably never get the full value of your fund back. It is ridiculous that people can't access the whole amount of these small pensions. 90 a month is pitiful just enough to buy yourself a few drinks in the pub at the weekend. if you were living in the UK you could now access the whole pot and be taxed at your marginal rate after taking the lump sum. After all it is your fund and you should have the option to do what you like with it. I would like the option to take the full sum amd invest it myself rather than take measly 90 euro per month.

Ger Keogh.

If you don,t need the funds now ,maybe do as follows. ?

Let it sit, as you suggest , until you must take it ie 65.
Even if you could encash the lot today as per uk ,you would be hit hard by Tax ,not sure if the uk system, other than for small sums is a great idea.
Probably will grow a bit + since 4 years older might get more than the 90 + we could have future possible positive changes to encashment rules.

You can then review.

ps . 90 a month is small but if all you had @66 was old age pension , that 90 a month would be a very welcome ongoing boost..

moneybox said:

You will probably never get the full value of your fund back. It is ridiculous that people can't access the whole amount of these small pensions. 90 a month is pitiful just enough to buy yourself a few drinks in the pub at the weekend. if you were living in the UK you could now access the whole pot and be taxed at your marginal rate after taking the lump sum. After all it is your fund and you should have the option to do what you like with it. I would like the option to take the full sum amd invest it myself rather than take measly 90 euro per month.

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There is a facility to access small pensions in Ireland but the limit is €20,000. Unfortunately the OP is just over it. If the Revenue increased it to €30,000, people with funds of €31,000 would be complaining...

The AMRF requirement in Ireland is an absolute joke. No one is sure why it is in place, rumours are that it was lobbying from fund managers to ensure funds stayed with their companies.

If the OP wants to cash it in, he's better off with the AMRF route instead of the annuity route. He gets 25% of the fund tax free. The remainder is in an AMRF which he can take 4% from each year. At age 75, he can cash the rest in if he wants. If he dies and there's still money there, it goes to his estate.


Steven
www.bluewaterfp.ie