Can I cash in my Pension?

J

joebyrne

Guest
Afternoon All,

I have searched for this topic specifically and cannot seem to find any specific information relating to my question.

I have left a previous employment around 3 years ago, during my time at the company I have build up a pension of nearly 80K that I am trying to access to inject capital into my business.

Having had discussions with the fund management company whom maintain said fund I cannot access the pension funds unless I am found to be in ill health or may be able to take an early retirement option - I am 36 year of age and the minimum retirement age is quite some time away.

Other options available seem to be transfer to another Company scheme or similar - but no access to funds.

I am self employed and a director of my own Company at present - we are not at a point where pensions are part of the package at present.

I have heard moving a pension overseas and then back again could result in releasing the funds - does anyone know if this is possible?

I am happy to pay all the taxes etc. associated with closing this early and would appreciate any feedback in relation to this.

Thanks,

Joe
 
This question is coming up with increasing regularity. I'd refer you to the excellent Liam Ferguson posting a month ago:

http://www.askaboutmoney.com/showthread.php?p=1243482#post1243482

So, if you're not able to prove you're retiring early due to ill-health or a professional sportsman retiring or one of a restricted series of exceptions, the answer is no. And you may be grateful that it was no at some stage in the future.
 
As regards the idea of transferring your pension fund around through various jurisdictions in the hope of exploiting more favourable rules on early retirement, it's not something I have ever recommended to a client for many reasons, not least of which: -

  • Such activities are not regulated by the Central Bank nor do they come under the scope of any investor compensation protection.
  • The intermediaries I have seen who promote this are generally based in offshore locations.
  • Charges I have seen for this service have been substantial.
So basically, you're entrusting your pension fund to someone you don't know, based in a foreign country, who is not regulated in Ireland and authorising them to move your pension fund through a couple of foreign countries for you.

If that's not enough to put you off, then consider this. The legislation that permits transfers from UK pension funds to other countries (known as QROPS) was designed to facilitate people who had accumulated pension funds while working in the UK and subsequently emigrated. It was never intended to be used as a conduit through which pension funds from other countries could pass. Just because it may be possible now, doesn't mean to say that the UK HMRC or the authorities in another jurisdiction can't later hit you with a tax bill for a transaction that's not in the spirit of the legislation. This whole area is under review all the time. Do a Google search for "QROPS trust busting".

If you're still keen to pursue this course of action, I would strongly recommend that you do the following before parting with your hard-earned pension fund: -

  • Do as much research as you can on the intermediary that you're working with.
  • Get a detailed breakdown of the total cost of the transaction.
  • Get independent advice (as in - not from the intermediary that's trying to sell the service) as regards the legality of the proposed transaction in each country through which your pension fund will pass.
Personally, I wouldn't touch such a transaction with someone else's barge-pole.
 
Thanks for the info guys.

Appreciate your time in responding.

QROPS seems quite scary and definitely not worth the risk of s huge tax bill - back to plan B I guess and look at some way of investing this "dead pension", that I can no longer contribute to as I have left that particular employment.

Thanks Again,

Joe.
 
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