Accessing pension aged 60

D

Daddy Ireland

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My sister is 60 and her pension is under an executive pension plan. She thinks she can cease her contributions and tell her employer to do the same and access her 25% lump sum and continue to work part time. Does'nt want to ask employer as its just an idea she has to work less hours if possible. I said I would check into it ?
 
In order to access her fund, she must "retire". She cannot continue in employment in the same role and draw the pension benefits. She could however leave employment, draw her benefits (lump sum and pension options) and come back in a different role.
 
Thanks Conan. It's possible so if she speaks with her employer and be retaken on. Must it be in a different role or could it be part time covering some of her old role ?
 
If her current scheme has a Normal Retirement Age of 60, then she can draw down the benefits and just continue working on whatever arrangements she negotiated.
if however her Normal Retirement Age is day 65, then she has to get agreement With her Employer to go on “early retirement “ in which case if she were to go back working for the same Employer it would have to be in a different role (part-time might suffice).
if there is a Pensions Consultancy firm advising the Employer, then they might advise your sister.
 
Depending on the structure of the pension scheme, it might be possible to amend the Normal Retirement Age for just her to age 60. This would then allow her to do as Conan describes in the first sentence of post #4 above. While the description "Executive Pension Plan" can sometimes be used to describe different things, often it describes a plan that was set up just for her with its own trust and not as part of a larger group of employees with a single trust covering the entire group. If it was set up just for her then there should be no problem changing the Normal Retirement Age just for her.

As an aside, if she starts drawing her benefits now, she can take her lump sum but she has to do something with the balance of the fund. She can buy an annuity which will give her an income immediately. Or she can put the balance into an AMRF and ARF. She has no obligation to take income from the AMRF. But from next year (assuming that's the year in which she turns 61), she will need to withdraw at least 4% per year from the ARF or suffer a form of double taxation. From your original query it sounds like she only wants to access the lump sum now.

Regards,

Liam
www.ferga.com
 
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