Early retirement drawdown query

M

Miracle Girl

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I’m hoping to get some guidance here. I’m planning to take early retirement ASAP . I am well over 50 - from my company pension scheme. I’m still working parttime with the company at the moment, but I do intend to leave. Before handing in my resignation, I wanted to get all my ducks in a row, so I contacted the pension provider to ask about my options and to confirm that I could draw down my pension once I leave.
To my surprise, they were very reluctant to provide any information. They said they needed confirmation from my employer—after I resign—before they could give me my options. They also stated that if I were applying for early retirement on the grounds of ill health, they’d require permission from the company.
I asked why they couldn’t simply confirm whether I would be entitled to access my benefits once I leave, as I’m over 50 and meet the basic age requirement. But I got no clear response. I found this quite surprising, especially considering that this is a well-known financial company in Ireland.
Since then, I’ve submitted a request to my employer to provide the necessary confirmation to the pension provider—but I’m still unclear: Do I actually need this permission just to find out my options?
I’ve worked with the company for over 30 years and am very keen to leave. I’m considering taking the tax-free lump sum and moving the remainder into an ARF, but I’d like to understand my options fully from the provider before handing in my notice.
 
Miracle Girl said:
They said they needed confirmation from my employer—after I resign—before they could give me my options.
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Don't you have, or can't you obtain, a copy of the pension booklet without committing to anything?

Basic scheme information - explanatory booklet or contractual terms - pensionsauthority

You are entitled to basic scheme information when you join a pension scheme or take out a personal retirement savings account (PRSA) or a personal pension.
pensionsauthority.ie

Basic scheme information – explanatory booklet or contractual terms​

You are entitled to basic scheme information when you join a pension scheme or take out a personal retirement savings account (PRSA) or a personal pension.

Trustees of occupational pension schemes must provide members with certain information about the operation of the scheme. This mainly comes in the form of a scheme explanatory booklet.
Click to expand...
 
My pension provider said I would need permission from the employer to retire early. Maybe it has something to do with that.

I can't imagine an employer ever getting in the way but I wonder would they be wary of annoying the employer by facilitating someone's exit if that wasn't what the employer wanted
 
I would be interested in the reply too. I asked the question to my pension provider a while ago and I know i can however I have also heard that its not the case for all schemes and that you will need the blessing of your employer in some cases so yes it would look like you have been giving the right answer.

This surprises me as I thought too that by law you have access to your pension from 50 years old once you have left the company.

It would seem you rather not say your intrentions to your manager.
Is it possible you contact HR and ask a general question instead without revealing you are thinking of leaving?
 
Just ask HR or the pension intermediary for a copy of the employee pension handbook to which you are entitled. If that doesn't answer your questions then you can consider your next step.
 
That is interesting, thank you for your replies. I genuinely thought it would be straightforward as I was over 50.. and heading for 60!! , but interesting on this tread other people have encountered the same.
I have a massive file (somewhere) on my pension and my statements etc so I may have some information about early retirement in that. The website from the financial company is vague too..but seeing your comments maybe it is more company centric.
I dont think I will have any issue getting permission from my employer, i just thought it would be more straightforward with the financial company. I was so surprised at the cloak and dagget responses.. I did send my manager an email querying could I get this permission based on ill health and that my query was not a resignation but a query. I have had chronic health issues the past few years and still have them , thankfully nothing immediately life threatening, but I am tired and want to step away.
Hopefully it is straightforward.
 
It's not unusual for employer's consent to be required in such circumstances.

See here:


Early retirement

Most occupational pension schemes in the private sector permit members to retire
early with the employer’s and/or trustees’ consent generally from age 50 onwards or
within 10 years of normal retirement age. Many schemes allow members to retire due
to ill-health at any age.
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But I don't understand why the pension intermediary/provider seems to be reluctant to apprise you of your options or the scheme rules before you make a decision one way or another - that sounds odd and unfair.
 
The trustee of a pension scheme has the right to refuse a request for early retirement. This harks back to when Defined Benefit pension schemes were more popular, with their pooled resources. If too many employees took early retirement it could cause financial issues for the scheme as a whole. While the same risk doesn't apply in a Defined Contribution pension scheme where your pot is ringfenced for you alone, the rule remains.

So the pension company can't answer the question "Can I take early retirement?" without checking with whoever the trustee is.
 
Thank you all for your replies. Its being useful and good to clarify that it is clearly not unusual for the company to take the stance they have. I am glad I checked here. I am sure it will be fine and even if they refuse permission, I may leave anyway and I expect I am fully entitled when I reach 60 which is not to far away ( am I???? maybe I should check that too! :)
 
Miracle Girl said:
I am sure it will be fine and even if they refuse permission, I may leave anyway and I expect I am fully entitled when I reach 60 which is not to far away ( am I???? maybe I should check that too! :)
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Is the scheme a Defined Benefit (DB) scheme - promise of a certain level of pension when you retire, depending on your salary and number of years' service? Or is it a Defined Contribution (DC) scheme - you're building up a fund?

If it's DB then the trustees might turn down your request for early retirement (which is defined as any age before the Normal Retirement Age of the scheme), if the scheme is not in great financial shape.

If it's a DC scheme, there's little or no chance that your request for early retirement would be refused. The trustees of a pension scheme have an obligation to always act in the best interests of scheme members and I can think of no reason why the trustees of a DC scheme could argue that refusing such a request would be in the members' interests. In a DC scheme, your fund is ringfenced for you and what you do with it has no bearing on any other members.
 
Thank you LD Ferguson. That's very reassuring and gives me confidence to cut the apron strings from my job :)) It is a DC scheme and it was my understanding I could draw down benefits once I left the company. I only contacted them to " double check before I handed in my formal letter, (I have had an informal chat with my boss) " so I was a bit surprised at the reticence to confirm anything. I know my pension company cannot give financial advice and I dont think the company offer any and I wasn't expecting that either it was more a confirmation that I would be good to go and then I can put in my leaving letter.
I didnt want any nasty surprises AFTER I had resigned :))
I will let you know how it goes
I might be in touch with some if ye on here when I do get my formal options.

thanks again, very helpful insights on here as always.
 
I asked something similar to the OP recently. I contribute to a Group Standard PRSA scheme through my employer. There is no DC or DB Occ Pension scheme available.

The reply from my PRSA provider was...

"Once you have retired <provider> can prepare your Leaving Service Options which will outline how the benefits can be taken."

and

"If you resign before reaching your retirement age, you would be able to claim your funds from your resignation, as you are over the minimum age limit. "
 
redstar said:
I contribute to a Group Standard PRSA scheme through my employer.
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Rules on early retirement of a PRSA (between 50 and 59) are slightly different to those that apply to an Occupational Pension Scheme.

  • You own the PRSA - there are no trustees - so you make the decision without requiring sign-off from any third party.
  • Aside from ill-health, you can only retire a PRSA between 50 and 59 if you are retired / retiring from all paid employment at that time; not just the employment where the PRSA contributions came from.
 
LDFerguson said:
Aside from ill-health, you can only retire a PRSA between 50 and 59 if you are retired / retiring from all paid employment at that time; not just the employment where the PRSA contributions came from.
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How is this detected or enforced.

Is being still in employment a question on retirement options forms.
 
S class said:
How is this detected or enforced.
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I'm not sure that it is. I signed such a form last to start drawing a modest amount from my PRSA in my late 50s but word seemed to be that it didn't preclude me changing my mind and taking up paid employment again - and if I did that then it would not impact my pension drawdowns other than it being assessable for tax with any other income as normal. That's my understanding anyway but I'm open to correction.
S class said:
Is being still in employment a question on retirement options forms.
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I can't remember the specifics of the form but definitely some such declaration is made but I can't remember if it goes to the pension provider, Revenue, SW etc...
 
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