Can they leave this decision until just before they retire? In other words retain the DB benefit and get a TV in theory the day before retirement age 60. If that can be done are you not now in the best position to make an informed decision?So you must decide whether you want to retain the relatively guaranteed DB pension OR take the Transfer Value, invest it (you will have to decide what level of investment risk you want to take) and then when you get to age 60 (or later) decide whether you want to convert the resulting value into buying an Annuity or investing it into an ARF.
So is it always at the discretion of the scheme trustees whether or not they offer a TV at any given time?Possibly. But it all depends on the TV offered by the scheme and how much the Trustees want to offload the DB liability. In 3 years time they might not be willing to offer a TV.
That is what I was wondering Cameo, would the DB scheme pay better than taking the transfer value and trying to buy an annuity yourself?Most DB schemes would pay income which would be very generous compared to buying an annuity In the open market.
The one caveat depends on the financial position of the fund, it’s possible that future benefits could be cut.
I’d be wary of anyone saying a BOB would be a better option unless there was compelling evidence that the scheme was in financial difficulty.
Hi Marc. I'm 57. Partner is contributing to a PRSA. current value circa 400000 plus another couple of pension policies. Value around 470000 in total. they are 59 and would like to retire in the next 3 yrs or so. i think they will take tax free cash and arf the rest. If we could live on my db, they could leave their fund for a while longer. we should have a lot of the main costs out of the way by then, mainly college going kid (1). He works part time (non-pandemic times) and looks after his own spending, clothes, socialising etc. We own our house and will probably downsize in time freeing up a few bob.You don’t say how old you are now.
If there are a few years to age 60 it’s probable that your transfer value will increase overtime. They generally grow fastest in the final years -around 10%pa
So, you could potentially obtain a larger lump sum than €200k
These decisions really come down to how significant the pension is to your overall financial position.
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