My defined benefit pension is to commence in May next. I have been offered either a annual pension of €65k or a reduced annual pension €53k and a tax free lump sum of €148k.
So for each €12 of tax free lump sum I take I will lose €1 of annual ongoing pension.
It looks like I should take the full lump sum because
1) Its cash in hand.
2) With some income from other part time work I will be paying tax at the marginal rate for the foreseeable future.
i am open to contradiction on the above points.
My main query is in relation to the commutation rate offered by my ex employer. This is 12.1. Is this normal or below average. i.e. are they trying to screw me? It seems less than generous when compared to interest/annuity rates.
Do any members have knowledge of commutation rates being offered by other large employers in the state?
Thanks for your help.
Billydog
So for each €12 of tax free lump sum I take I will lose €1 of annual ongoing pension.
It looks like I should take the full lump sum because
1) Its cash in hand.
2) With some income from other part time work I will be paying tax at the marginal rate for the foreseeable future.
i am open to contradiction on the above points.
My main query is in relation to the commutation rate offered by my ex employer. This is 12.1. Is this normal or below average. i.e. are they trying to screw me? It seems less than generous when compared to interest/annuity rates.
Do any members have knowledge of commutation rates being offered by other large employers in the state?
Thanks for your help.
Billydog