Pension advice required.

Discussion in 'Pensions' started by TrotterDel, Mar 12, 2018.

  1. TrotterDel

    TrotterDel Frequent Poster

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    I have a personal pension for the last thirty years funded by myself only. At age sixty onwards I can withdraw 25% but must buy a pension with the balance. The fund has about 90/100k in it hence after taking 25% the pension is very small. My preference would be to find a facility to withdraw the total amount out at age sixty onwards. I am with my current employer for thirity years plus but we dont have a company pension plan in place , that said they would consider setting up a one person plan for me provided it was legal.

    All advice appreciated - thanks.
     
  2. SBarrett

    SBarrett Frequent Poster

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    Your employer can make a massive contribution to a pension on your behalf...if they wanted to.

    Your choices for the benefits as is are very limited and not very attractive.

    After the lump sum, you can purchase an annuity or invest in an ARF. You will have to put €63,500 aside into an AMRF or purchase an annuity with the amount. You can only access 4% of the AMRF. You can access the full amount of the ARF at any time.


    Steven
    www.bluewaterfp.ie
     
  3. TrotterDel

    TrotterDel Frequent Poster

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    Can I take the cash sum and put the balance into an ARF ?

    Thanks,
    TD
     
  4. SBarrett

    SBarrett Frequent Poster

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    No, you must satisfy the AMRF requirement. Article on option here
     
  5. TrotterDel

    TrotterDel Frequent Poster

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    If I start a one person company pension plan now (current age 55) can I transfer my personal pension into it at age sixty ? if so would this then allow me take 1.5 times my salary out as a cash sum ?
     
  6. SBarrett

    SBarrett Frequent Poster

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    Last edited: Mar 16, 2018
    You won't be eligible for 1.5 times salary lump sum. That's the maximum lump sum payable based on 40 years service. You will be entitled to 15/80 as a lump sum and you will have to purchase an annuity with the remainder.

    And if you've worked for the same employer for 30 years, set up your own company and bill that same employer, the Revenue will think there's something dodgy going on.

    (edit: I misread the post I was answering and thought the poster was talking about a one person company like a service company)


    Due to the AMRF requirement, the options available to people with small pension pots is awful. There's nothing we can do under the current legislation.




    Steven
    www.bluewaterfp.ie
     
    Last edited: Mar 16, 2018
    Gordon Gekko likes this.
  7. RETIRED2017

    RETIRED2017 Frequent Poster

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    Steven My understanding was you could get 1.5 times salary once you have 20 years pension contributions,
     
  8. SBarrett

    SBarrett Frequent Poster

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    That is correct. It isn't relevant to the OP's request as he will only have 5 years service.


    ...There's a lot of exceptions to pensions rules that if we gave them all in every answer, we'd be here all day! :)
     
  9. RETIRED2017

    RETIRED2017 Frequent Poster

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    Well how much time would it take up to outline the exceptions on buying back 15 years to bring him past the 20 years seeing he has close to 100K in a private pension already, seeing the company said they would help once it was legal,
     
  10. TrotterDel

    TrotterDel Frequent Poster

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    Hi guys thanks for your interest - let me clarify - I am not leaving my current employer of 32 years they are allowing me to set up a one person company pension plan provided its legal which I believe it is.
    They are prepared to contribute the minimum amount which I think is 10% of my payment.
    I am a PAYE worker and this will continue.

    So if I start a one person company pension plan now (current age 55) can I transfer my personal pension into it at age sixty ? if so would this then allow me take 1.5 times my salary out as a cash sum ?
     
  11. Conan

    Conan Frequent Poster

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    Assuming you are working with a Defined Contribution Occupational Pension (not a Personal Pension or PRSA) you have two options re the lump sum at retirement:
    - you can take 25% of the fund as a lump sum and use the 75% to either buy an Annuity or invest into an ARF/ AMRF, or
    - you can take up to 150% of Final Salary as a lump sum ( provided you have a minimum of 20 years completed service with the Employer from which you are retiring). If the service is less than 20 years then the lump sum is reduced. However if you take this option you must buy an Annuity with any balance remaining.
    As a general rule, one should try to maximize the lump sum as it is tax free (up to €200,000). So if the 150% gives a higher figure than the 25% (even if it uses up all the fund) then that may be the best route. Remember that any pension income is potentially taxable.
    So if the OP has a fund of circa €100k, service of 20 years or more and a Final Salary in excess of say €66,000 then they could take all the fund as a tax free lump sum.
     
  12. TrotterDel

    TrotterDel Frequent Poster

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    Its a personal pension plan I am trying to transfer into a new one person company pension plan.
    I have 32 years service with my current employer.
     
  13. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Which can’t be done; personal pensions can’t be transferred into company pensions.
     
  14. TrotterDel

    TrotterDel Frequent Poster

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    My understanding is that it can be transferred into a PRSA then onto a new one person company pension plan provided I have twenty years plus service with my current employer.
     
  15. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Correct on the first point, it can be moved into a PRSA and then onwards to a company pension. But the 20 year point is a red herring.
     
  16. TrotterDel

    TrotterDel Frequent Poster

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    * But the 20 year point is a red herring * - explain please in more detail.
     
  17. Conan

    Conan Frequent Poster

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    In terms of transferring, yes you can go Personal Pension to PRSA to Occupational Pension. But there is no requirement for 20 years service in this regard. The 20 years is only an issue in terms of going the 150% of Final Salary route for lump sums.
     
  18. Gordon Gekko

    Gordon Gekko Frequent Poster

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    There’s no 20 year condition with regard to such transfers. There’s a 15 year rule in terms of transfers from company pensions to PRSAs; is that what you’re thinking of perhaps?
     
  19. dan rather

    dan rather Registered User

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    you could get an annuity rather than an ARF if you dont need to leave any money for your estate when you die
     
  20. TrotterDel

    TrotterDel Frequent Poster

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    Can I transfer my personal pension into a PRSA then onto an ARF ? if so this would allow me access to the money ?