If you wave the right to the 25% tax free lump sum now. Does this include all pension schemes you have paid into. Suppose I'm asking, if I use the scsb calculation on redundancy and wave the right to the 25% on retirement and join a new scheme , can I think take 25% tax free lump sum on retirement from the new pension scheme.
SCSB
Calculating NPV of lump sum
- Mary is 53 and being made redundant
- Her final salary is €40,000*
- She is a member of her employer’s DC OPS
- She has 20 years past service and her NRA is 65
- TFLS on leaving = 20/32 x (1.5 x €40,000) = €37,500
- TFLS at NRA = €44,800 (indexed at 1.5%)
- TFLS discounted back to present date = €22,300 (6% discount rate)
- This is the figure for SCSB
where has that 32 come from?
how did they get to 44,800?
Using this for Mary, I get to 14,909.08, which is a fairly large difference compared to her earlier 22,300.The PV of the TFLS is calculated using formula based on the scheme rules of years of service. For example, 3/80 x years of service x final salary ( which would give the revenue maximum TFLS of 1.5 times salary after 40 years) , discounted back at around 6% pa from normal retirement age to the date of leaving. It does not consider the 25% rule at all. So fund value not relevant.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?