Pension from first job

M

moneymakeover

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I worked for 5 years and made pension contributions totalling 5000 punts until 1992


After I left I never thought about the pension until one day I got a letter telling me because 5 years had passed the contributions had been converted to a cash fund.

The pension company, very well known in Ireland never contacts me. I have to contact them every 5 years or so and ask them to send out a statement. The value today is still about €6000.

My question is about the initial decision to convert to cash. Was that correct? Is there anything I can do about it now? Any equity based form of investment would have done better in the past 30 years.


Can I now withdraw the cash if I'm over 50? Or at least transfer to my current pension fund.
 
Your annual benefit statements are probably going to the trustees i.e. your old employer. That would be standard for company pensions.

At 50 you can take benefits but it depends on the rules of the scheme what you can take tax free. Generally its 3/80 x yrs worked x final salary so say you earned 10k you could get up to 1875 tax free and balance is used to buy an annuity. The salary figure can be increased by cpi if you weren't a director.
Alternatively you can take 25% tax free and balance to an Amrf.

Depending of what other pension plans you have you may be allowed to take it all and pay tax on balance after lump sum.

You could also transfer into a new employer pension or prsa but you would then be subject to the rules of the new scheme for claims etc. I.e. Age 65.

As to why you were switched into cash is something you'd need to ask the trustees but it may be in the scheme rules.
 
Thanks for that

If I'm over 50 do I have the choice of either transferring to my occupational pension
Or if I wish, just taking the money now?
If I put it into my mortgage that might be sensible?
 
What choices you have really depends on the rules of the scheme so you should contact the trustees to be sure.

Generally, though, on leaving service before 50 you can
a. Leave paid up in existing scheme
b. Transfer to a new employers pension or Prsa (some restrictions on the prsa)
c. Transfer to a buy out bond. This is similar to leaving it but the trustee is removed. Can be claimed at 50 but some companies will have a minimum amount they will accept.
d. From age 50 to 65. you can claim the plan.

You should contact the company for your leaving service options and retirement options now.
 
It seems I can
  • take 25% and purchase AMRF with remainder
  • Take lump sum tax free and remainder after tax
  • Take 25% and purchase annuity with remainder

When does it make sense to purchase annuity? Now or in 15 years?

Or do I have a choice?
 
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