Pension Lump Sum

I'm not sure if @LDFerguson means that an AVC PRSA cannot be split or that the pots resulting from an AVC PRSA that has been split cannot be retired at different times. Maybe you can split as long as you retire all the pots at the same time.
 
CharlieMac said:
I'm not sure if @LDFerguson means that an AVC PRSA cannot be split or that the pots resulting from an AVC PRSA that has been split cannot be retired at different times. Maybe you can split as long as you retire all the pots at the same time.
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Can't see any ambiguity here myself:
LDFerguson said:
PRSAs can be split to facilitate retirements at different times. AVC PRSAs cannot.
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And here:
LDFerguson said:
Splitting a PRSA enables you to "retire" each one at different times, which can be useful for some. You can't do that with an AVC PRSA as AVCs and AVC PRSAs relating to the same employment must all be retired at the same time.
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Here's some relevant points that may help to clarify.

  • In this thread, I was originally talking about a PRSA, not an AVC PRSA. It's possible to split a PRSA into multiple PRSAs and "retire", i.e. draw down lump sums and benefits from each smaller part at different times.
  • An AVC PRSA operates under completely different rules. You must retire an AVC PRSA or AVC at the same time as you are drawing your benefits from the linked Occupational Pension Scheme.
  • There's nothing stopping you from having several AVC PRSAs related to the one employment. It would be up to you to make sure that your total contributions don't exceed relevant limits. But you still need to retire them all at the same time.
  • @CharlieMac has a query about holding two AVC PRSAs for a different reason - not to retire them at different times - but to use one to buy additional referable amounts in the Single Public Service Pension and another to invest in an ARF at retirement. To be honest, it's not something I've ever been asked to do for a client, so please don't take this as gospel. But I think it should be doable, largely because the transfer from an AVC PRSA into buying referable amounts would need to be done before retirement, while the transfer to an ARF would be done at the point of retirement. I don't see why there would be any issue with having two parallel AVC PRSAs. Use one to buy referable amounts a few months prior to retirement and the other to buy an ARF at retirement. But as I say, it's not something I've done in practice. I'd be inclined to ask the chosen AVC PRSA provider to give you something in writing that it's something they can accommodate, before you'd sign on the dotted line.
ClubMan said:
the complexity of pension options and rules never ceases to confuse me...
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Don't get me started on a rant or we'll be here all day. I'm 36 years in this industry and I'm still learning. My biggest gripe is that I honestly believe that much of the complexity could be avoided. Instead of there being a single, coherent set of rules that govern all areas of pension funding, we have layers and layers of options and rules that don't interact with each other. And now the proposed Auto Enrolment which operates with a yet another completely new set of rules and doesn't interact or integrate with any existing pension schemes. :rolleyes: Don't get me wrong - I'm aware that the continuing existence of such a complex web of regulation helps to keep me in a job explaining stuff to people, but I honestly believe that a far simpler, coherent pension strategy would benefit the country far more.

<Steps down from soap box...>
 
LDFerguson said:
Don't get me started on a rant or we'll be here all day.
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My favourite bit is how the introduction of PRSAs was supposed to simplify things, but they never brought in the rules to simplify things around the PRSA so if just added another layer of complication.

We already have Revenue and the Pensions Authority involved in pensions; it'll be fun when the Department of Social Protection join in whenever AE happens
 
Fortune said:
My favourite bit is how the introduction of PRSAs was supposed to simplify things, but they never brought in the rules to simplify things around the PRSA so if just added another layer of complication.
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Yes I remember it well. Talk at the time was that PRSA products would be so simple and clear that many other products like Personal Pensions, EPPs, Buy-Out Bonds would simply die on the vine because nobody was buying them anymore. But as you say, PRSAs just turned into an additional option with its own rules that was added to the existing list of options a financial broker needs to go through and evaluate with their client.

More recently - early retirement on PRSA and early retirement on a Master Trust or Buy-Out Bond have different rules. Both can be retired from 50 onwards, but the rules are quite different. Where's the logic in that?

I suspect we could exchange similar anomalies for a long time.
 
I'd love to contribute something meaningful to the direction this post has taken but it's gone so far off topic it'd probably be just deleted.
 
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