Can I transfer my previous occupational pension to Royal London's non-standard PRSA?

[balders93]

My Leaving Service Options from Irish Life gives me the following transfer options:

• An Exempt Approved pension plan with your new employer.
Or
• A Personal Retirement Bond (Buy-out-Bond).

My new employer does not have a big Irish presence so there's no group scheme set up and it has offered to contribute to a PRSA of my choice.

I want to set up a Royal London non-standard PRSA for my contributions at my new company.

Does this RL non-standard PRSA qualify as an "exempt approved pension plan" to transfer my previous Irish Life pension into?

 

[ClubMan]

Benefits payable on leaving - pensionsauthority

Leaving employment or changing from employment to self-employment raises issues to be considered in relation to your pension benefits.

pensionsauthority.ie

Transfer of benefits - pensionsauthority

Pension arrangements generally allow you to transfer your pension benefits from one arrangement to another. The transfer rules depend on the arrangement you are transferring from and the arrangement you are transferring to.

pensionsauthority.ie

Benefits from an occupational pension scheme can be transferred to another occupational pension scheme, a PRSA, a buy-out bond (or personal retirement bond) with an insurance company, or an overseas pension arrangement.

The rules and restrictions that apply depend on the circumstances.

 

[LDFerguson]

If your transfer value is over €10,000 and your old employer's pension scheme is not being wound up, then you can transfer to a PRSA but you need to get a Certificate of Benefits Comparison (COBC) from an actuary to do it, which will cost you around €1,200 + VAT.

As an alternative, you can set up a PRSA with Royal London for the new contributions and transfer the old fund into a Royal London Personal Retirement Bond (Buy-Out Bond). You'll have two policy numbers but you won't need to pay for a COBC.

If your transfer value is less than €10,000 you can transfer to a PRSA without a COBC.

Liam
www.FergA.com

 

[balders93]

thanks @LDFerguson !

That is a hefty fee to swallow to get it moved. I think with my fund value, and number of years until retirement it'll be better to get it moved to a better product, but €1,500 in required services to do so is a racket!

 

[LDFerguson]

There's a rumour that the requirement for a Certificate will be removed in this year's Finance Bill, but we won't know until the Bill is published.

It's a bit silly that you need a certificate to transfer to a PRSA but you don't need one to transfer to a Buy-Out Bond, which could be with the same company, investing in the same funds.

I'll be happy to see the requirement for a Certificate abolished. It came about as an attempt at protecting people from mis-selling - being advised to transfer from a superior Occupational Pension Scheme into an inferior PRSA, just to earn commission for the seller. But there's been no huge mis-selling scandal in relation to transfers into Buy-Out Bonds or other products that don't require a Certificate.

 

[ClubMan]

This seems to be a pragmatic solution as long as the COBC is required?

As an alternative, you can set up a PRSA with Royal London for the new contributions and transfer the old fund into a Royal London Personal Retirement Bond (Buy-Out Bond). You'll have two policy numbers but you won't need to pay for a COBC.

Although I can never remember what, if any, restrictions apply to different pension products. E.g. I think that a PRSA can be accessed a early as age 50 but I'm not sure if it's the same or later for a BOB? Probably worth clarifying such issues before doing anything?

 

[Fortune]

I think that a PRSA can be accessed a early as age 50 but I'm not sure if it's the same or later for a BOB?

The BOB can be accessed from 50. There are circumstances where the PRSA may not be accessable until 60 (or later).

 

[LDFerguson]

Although I can never remember what, if any, restrictions apply to different pension products. E.g. I think that a PRSA can be accessed a early as age 50 but I'm not sure if it's the same or later for a BOB? Probably worth clarifying such issues before doing anything?

A PRSA can be accessed from 50 - 59 if you are not in any employment at the point of accessing it.

A Buy-Out Bond can be accessed from 50-59 if you are not in the employment of the employer where the fund was accumulated. If you were a shareholding director of the employer, you'd also need to get rid of your shares to access the Buy-Out Bond between 50 and 59.