DC Scheme fund - can you just leave it after NRA

[mtk]

hi guys
Wondering what happens if when you reach scheme NRA ( NRA is 60) and want to leave the money there.
The logic behind this is:

• that man. charge on the funds are quite low (0.15% and 0.3%) vs an ARF
• tax free growth (hopefully )to get bigger tax free lump sum
• can live off savings for a few years probably until 63/64

1) In practical terms will the scheme chase me to move the cash ? or "it depends "? or scheme wont even notice( its a big scheme)? ......what normally happens in these cases?
2) Anyone see any downsides to this strategy?

thanks for opinions /insights

 

[Steven Barrett]

It's no problem leaving it there. No imputed distribution either.

You'd want to talk to the trustees though as they might want to you to mature your benefits. I haven't worked with big schemes since my early days and there was always members who hadn't matured their benefits on time. That was a long time ago though so it could be different now.

Steven
www.bluewaterfp.ie

 

[mtk]

You'd want to talk to the trustees

ok could do that but want to know deflault if "I stay quiet"

 

[Steven Barrett]

They won't mature it without your sayso as you have to indicate where you want the money to go e.g. annuity or ARF.


Steven
www.bluewaterfp.ie

 

[JoeRoberts]

Stephen

Would the payout on death to the spouse / estate be the same ? Is a DC payout still 4x salary with remainder as an annuity ? If so, an ARF may be better..

 

[Steven Barrett]

If he's left employment it is a retained benefit which pays out the full value as a tax free lump sum. The 4 times salary limit only applies to active company pension schemes.


Steven
www.bluewaterfp.ie

 

[mtk]

They won't mature it without your sayso as you have to indicate where you want the money to go e.g. annuity or ARF.


Steven
www.bluewaterfp.ie

Thanks Steven and not an active member so no 4xsakary death benefit to answer joe Roberts point

 

[Kerry Gooner]

If in the meantime you live off the savings, when these run out you will be forced to access pension pot and that may have been after a market correction.

 

[mtk]

If in the meantime you live off the savings, when these run out you will be forced to access pension pot and that may have been after a market correction.

I know there could be a fall in fund values but my non pension savings are fairly substantial and not in equities