2 pensions, should I combine?

K

Komori

Registered User
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Hello, I have 2 pensions currently.

1. PRSA set up in my previous job, currently paused, value 23k
2. Work pension in new job 5% of salary matched by the company. 40% tax relief
Value 6k

Should I transfer the 23k into the new pension?
I don’t have much extra cash to be putting any more into my pensions. Married with young kids and life is expensive!!!
Thank you.
 
I wouldn't assume that your new pension fund will allow you to transfer a lump sum like this. There's also the question of what benefit will arise.

Who is managing your PRSA fund and what charges are you paying?
 
For me the answer here depends on 2 things.
First and most important is the fees. If your PRSA has higher fees than your workplace pension, then transfer it in. Lots of studies out there show that fees are the number 1 factor in determining return. I transferred my old PRSA (fee 1%) into my workplace pension (fee 0.55%) for this exact reason.
Second factor to consider is choice of funds. Are you losing the option to invest in a particular fund that you really like, if you transfer your PRSA. This is not usually the case and, in my opinion, is far less important versus fees.

Final factor to consider, if you had much higher balances, or are close to retirement, having 2 separate pension funds allows you more flexibility at retirement. You could draw down on one while still accumulating in the other. But this is not a factor in your particular instance.
 
RetirementPlan said:
I wouldn't assume that your new pension fund will allow you to transfer a lump sum like this. There's also the question of what benefit will arise.

Who is managing your PRSA fund and what charges are you paying?Thanks for the reply
Click to expand...
AIB/Arklife, I’d need to check the fees.
Also I must check the fees on my new one and if they would even accept a transfer. Thank you for the reply
 
AJAM said:
For me the answer here depends on 2 things.
First and most important is the fees. If your PRSA has higher fees than your workplace pension, then transfer it in. Lots of studies out there show that fees are the number 1 factor in determining return. I transferred my old PRSA (fee 1%) into my workplace pension (fee 0.55%) for this exact reason.
Second factor to consider is choice of funds. Are you losing the option to invest in a particular fund that you really like, if you transfer your PRSA. This is not usually the case and, in my opinion, is far less important versus fees.

Final factor to consider, if you had much higher balances, or are close to retirement, having 2 separate pension funds allows you more flexibility at retirement. You could draw down on one while still accumulating in the other. But this is not a factor in your particular instance.
Click to expand...
Thank you for the reply, I have a lot to think about.
Just unsure is there any point having two pensions, especially as one is paused, and has the bulk of the money in it
 
It's always useful to have two (or more) separate funds. When the time comes, you might well want to draw them down at separate times. You don't know now whether or not you will do so, but it's good to have the flexibility.
 
I think the first thing you need to know before making any decision on this is, which pension is performing better
No point in moving your PRSA to the work pension if the work pension is under performing compared to the PRSA, all things been equal
 
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