A pension advisor has offered 4 options regarding what to you with a small (approx 20k) DC fund after leaving employment. These are:
1. A deferred pension payable from 65 based on that value in the fund at that time.
2. A transfer to a similarly approved pension scheme with your new Employer.
3. A transfer to a Personal retirement bond (PRB) in your own name
4. A transfer to a PRSA
The recommendation is option 3 for these reasons:
"· The policy will be issued in your name and belongs to you which means that your previous employer and the pension Trustees have no further involvement. You can choose when you take your benefits which can be at any time from the earliest date retirement was allowed under your company pension (normally age 50). You could choose to take the benefits as late as age 70 if you were still working.
· You now have a pension vehicle that you can access money from regardless of any other pension scheme you join in the future.
You can always transfer from your PRB and into your current employer. You would then be governed to the rules of that scheme regarding drawdown age. I don’t ever see myself advising you to do this down the line but the option is always there."
These reasons seem fair enough. There is no current employer, but person may return to employment in the future.
Has anybody any advice?
Is there any advantage/disadvantage of PRB versus PRSA?
Thanks.