Changing employer on Occupational Pension Scheme

Marianne

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Can someone settle a disagreement for me?

An acquaintance was the sole member of a DC Occupational Pension Scheme of a previous employer. He left this employment and moved to an unrelated employer. The new employer was willing to set up a DC Occupational Pension Scheme for him.

Which of the following is correct: -

(1) The new employer must set up a new scheme, into which he can transfer the funds from the old scheme.

(2) With agreement from new and old employers, the old scheme can simply be renamed from Old Employer Ltd to New Employer Ltd and continued, thus avoiding costs of setting up a new scheme.

Thanks.
 
(1) The new employer must set up a new scheme, into which he can transfer the funds from the old scheme.
Employer has no obligation to set up an Occ pension but must provide access to a PRSA provider. Whether or not the PRSA can accept the transfer value is dependant on certain rules. Usually the best option is to transfer the value to a Buy Out Bond
(2) With agreement from new and old employers, the old scheme can simply be renamed from Old Employer Ltd to New Employer Ltd and continued, thus avoiding costs of setting up a new scheme.
No. The scheme relates only to the old employer as the employer own's the the scheme and provides benefits under "trust" There is no set up costs for a new scheme.
 
Thanks for your reply Baracuda.

Sorry - I think I phrased the question badly. The new employer is willing to set up an Occupational Pension Scheme for this man and make contributions to it.

Can this be done by simply changing the employer and trust deed on the original scheme (assuming that the old trustees are agreeable), instead of setting up a new scheme?
 
No you phrased the question fine but the answer is still the same, the new employer will have to set up a new scheme. If its for one employee it is very simple and the life company will look after the trusteeship directly.

Just a word of advice regarding charges, some of the companies are charging €5.00 per month for trustee service's and some are offering this service for free, so depending on the premium this charge could make up quite a large % especially when you add in the usual monthly policy fee and monthly contribution charge and management charge's
 
Marianne

May have provided the wrong or perhaps incomplete information in the above posts as I misread of your question and I was thinking of question in a group scheme context.

In the case of a single member DC scheme (aka Executive Pension) and with the consent of the old employer, a new Letter of Exchange can be completed by the new employer therefore transfering the trust to the new employer without having to alter the existing benefits or charging structure.

Sorry if this caused any inconvenience,

Baracuda.
 
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