2 Pensions at the moment...

I worked in Ireland for a company from the UK between 1998-2001 and in that time a pension was set up between myself & my employer. I put in my contributions of 10% every month which was matched by them. The pension was with Hibernian and from what I remember it was a executive style pension but with just 1 employee as I was their only employee in this country.

When I left in 2001, I moved to work for another UK company, still working in Ireland, but they were not prepared to be the trustees of the pension I had with the previous company, so I put the 1st pension on hold. I then started a new personal pension which I made my own contributions and my current company pay me their contributions separately.

However, I still have the 1st executive style pension. I called Hibernian about a year ago asking what my options were regarding this and I was told I would either have to wait until I was 50 and cash it in then or put it in a buy out bond. I haven't put any money in this pension since I started the 2nd personal pension in 2001.

• Does anyone know if there has been a change in legislation since then in order for me to cash this 1st pension in?
• Or do I have any other options?
• What is the advantage/disadvantage of this buy out bond?

There is a good sum in this 1st pension, probably in the region of €40k, so it would nice to get my hands on it?

You can't get your hands on it (you left employment before 1 June 2002 and had more than 5 years of scheme service)...you can early retire from age 50 (as Hibernian told you) or transfer it to a BOB - the same rules around encashment/early retirement would apply to the BOB as applied to the original pension scheme.

can you tell me is there an advantage/disadvantage in transferring it now to a BOB or leaving it in its current state?

It really depends on what sort of BOB offer you can get and how it compares to the existing pension scheme in terms of charges, fund selection, customer service etc. Not having to chase down trustees of an occupational pension scheme in years to come is another advantage of a BOB.

If there is ever a possibility of transferring into another occupational pension scheme in the future then keeping it as it is may be beneficial from the point of view of transferring in the 3 (?) years membership thereby automatically securing the benefits of future employer contributions without having to serve the normal two year vesting period.

ClubMan said:

If there is ever a possibility of transferring into another occupational pension scheme in the future then keeping it as it is may be beneficial from the point of view of transferring in the 3 (?) years membership thereby automatically securing the benefits of future employer contributions without having to serve the normal two year vesting period.

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2 years of membership is the magic number.

Fisher Black said:

You can't get your hands on it (you left employment before 1 June 2002 and had more than 5 years of scheme service)...you can early retire from age 50 (as Hibernian told you) or transfer it to a BOB - the same rules around encashment/early retirement would apply to the BOB as applied to the original pension scheme.

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Thanks for the reply. I was only employed for just over 3yrs with this company, so that is less than 5?

I thought you were 1988 to 2001!

You can take a refund of your contributions so...but you would therefore lose any employer contributions that were paid.

Fisher Black said:

2 years of membership is the magic number.

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Yes - but I was referring to the original poster's 3 (?) years membership of the scheme in question.

Fisher Black said:

I thought you were 1988 to 2001!

You can take a refund of your contributions so...but you would therefore lose any employer contributions that were paid.

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And you would be taxed (at 20%?) on the refund of any personal and AVC contributions made.

Yes there would be 20% tax on your contributions (normal and AVC) and you would lose your right to employer contributions.

Remember that taking a refund of the value of your own contributions, less tax is not advisable from the perspective of funding your retirement. As you said that your former employer matched your contributions, I'm assuming that the current value of €40,000 is made up €20,000 employee contributions and €20,000 employer. So, less 20% tax, you'd receive a refund now of around €16,000.

But you'd be cashing in €40,000 of a pension fund - you might regret that when you reach retirement age.

I agree. Cashing in should only be done after some serious consideration.

didn't realise that I would lose that much....what happens to the employers contributions?

tosullivan said:

didn't realise that I would lose that much....what happens to the employers contributions?

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They get refunded to the employer if you take a refund of yours.