Defined benefit pension scheme & PRSA

[Jenny1]

I am now in a defined benefit pension scheme however I was paying into a pension scheme which was set up through my old employer. I would like to transfer the money I have built up in previous employers pension scheme into a PRSA and pay into the PRSA at the same time. Am I mad to do this, given that I have a defined benefit pension scheme? Are there any implications to paying into both pension schemes? Any advice as to what I should do would be helpful.

 

[intermission]

If you transferred your previous employers pension into a PRSA you wouldn't be able to get tax relief on any further contributions to it. PRSAs are really aimed at the self employed, or those people whose employer doesnt provide an occupational scheme.

However, if you still wanted to transfer your old pension to a PRSA then the PRSA provider would be obilged to give you a 'Certificate of Benefit Comparison' showing projections of what the pension might provide if left in the existing scheme, compared to if transferred to the PRSA.

In addition, your old scheme would have to allow for such a transfer to a PRSA (not all do) and you would have to have less than 15 years pensionable service with your old employer.

Have you looked into the option of transferring your money into your new defined benefit scheme? This could potentially be a good option. In effect you would be buying X years service in your new employers scheme.

You also mentioned paying into 2 pensions at the same time. If your new employer has an AVC scheme that would be worth looking into instead as you would get tax relief on your contributions.

It may be worth discussing your options with the pensions people in your new job also.