Mutual separation agreement and pension contribution

housebound

Registered User
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My employer offered me a mutual separation agreement ( not redundancy). They offered an ex gratia tax free lump sum of 80k and an additional tax free contribution to my pension of 12.5k.

At first they said i could take the 12.5k in cash tax free instead of adding it to my pension thus my total tax free lump sum would have been 92.5k.... however they are now saying that was a mistake and if I wanted to take the 12.5k in cash then it would be subject to tax, prsi and USC.

I have worked there 17 years. My pension is a db pension and will stop once I leave the company. At present the transfer value of the pension is approx 78k and it would pay approx 10.5k per annum at retirement. I am not in a position to transfer the pension as I'm not moving to another employer.

It's a small pension, I am 40 years old so a while yet to retirement age. I'm not sure if it's worth adding the contribution of 12.5k to the pension or just taking it in cash albeit taxed.

I would welcome any advice as I have to sign the legal docs this week.

Thanks
 
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