Pension Death Benefit & Pension Transfer

States

Registered User
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Hi,

A couple of questions I hoping to get input on:

1. Is it correct that there is a limit to the lump sum you can obtain on death of 4 times salary? I have a pension with my present employer that will pay out 3 times salary on death. I also hold a life assurance policy privately that would pay out much more than this. Am I limited however to have 4 times salary with the combined payouts? The handbook for my employer's pension scheme quotes the following :
"The​
maximum amount of lump sum death benefit which the Revenue Commissioners will permit to be paid in cash form, in addition to a refund of the value of any contributions you have made, is four times your annual remuneration at the date of death taking into account all similar benefits arising under any other retirement or death benefit schemes"

I noted that this limit applies to death benefit paid in cash form so I assume whatever is left can be used to by an annuity?


2. The pension scheme rules with my present employer note that if I am in the scheme less that 2 years & then leave my job, I will lose the company pension contributions. Over 2 years and I can stay in the scheme even if I change jobs. However, if I were to transfer another private pension I have into the scheme I have heard that this no longer applies i.e. I could leave earlier that the 2 year cut-off and remain in the scheme. Has anyone heard of this?

Many thanks for your help & Happy Christmas!
 
Hi States

The maximum life cover that DC/DB scheme is allowed pay out is 4 x salary anything above this limit must be used to purchase an annuity. You have 3 x salary so you can take out an additional policy for 1 x salary and get tax relief on the premiums providing your employer would pay 1/10 of the premium.

The life cover that you have privately is exactly that (Private) so it is not linked to the scheme so it will pay out what ever the amount is in cash!

You are correct in saying that if you transfer in another pension arrangement that the scheme foregoes the 2 year refund period. However you would need to check with the trustees whether they would allow this.

Merry Christmas
 
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