Pension Transfer to Defined Benefit Pension

M

mdr

Guest
My wife started a pension a few years ago, she was working under contract at the time to a university, who had no pension provision. So she contacted a Financial advisor known to her family, who started a pension with Standard Life.

We weren't married at the time, so I didn't interfer, I just presumed the pension was a PRSA and as the advisor was trusted by the family, I left it alone. This year my wife joined her new employers (also a university) defined benefit pension, she stopped paying into her Standard Life plan and sought to transfer the value of the Standard Life Pension into the University's Defined Benefit pension (buy back years using the Standard Life PRSA).

When we contacted Standard Life with this in mind, we found that the pension was not a PRSA after all. (I am allowed organise these kind of things now). Standard Life's letter stated that "due to Pensions Board regulations we are unable to transfer a Personal Pension into any Company Plan". It listed the options available to us as :-
  • Continue the plan as is.
  • Make the plan "Paid-Up"
  • Transfer to another companies Personal Pension Plan
  • Transfer the funds to a PRSA.
None of these are attractive options, I have some questions.
  • What does "Paid-Up" mean, just simply halting payments?
  • Why can't we use the value of the pension to buy back years from a Defined Benefit Pension?
  • Is there any workaround ?
Thanks

Ray Kinsella
 
Paid up means halting contributions - so you would be left with the same number of units and the value would increase/decrease in line with the underlying assets the unit is invested in until NRA. If it is a with-profits policy then would attract bonuses as before.

If your wife is now a member of the DB plan, she has to stop contributing to the personal pension plan.

Not sure why you are so keen to transfer in - there is no guaranteed
that the DB scheme would permit purchase of added years from a transfer-in no matter where it comes from. It depends on the scheme, but most schemes in my experience now state that transfers in are kept in a DC pot - so they are not taking the risk for service not accrued within the company, and will not provide added years.

I would say - it may have been that when the original pension was set up there were no PRSAs - they only came into existance with the Pensions Act 2002.
 
> Yes there is, if you want to.....Transfer Personal Pension to PRSA, transfer that PRSA to Scheme.

Is that legal, you are essentially opening a pension to close it again ? Who is to say that the PRSA provider won't say the same thing about transferring the pension value ?

> If your wife is now a member of the DB plan, she has to stop contributing to the personal pension plan ...

My wife has stopped contributing to the scheme. The value transferred to university's defined benefit scheme is used to buyback years, it doesn't go into another defined contribution fund, this makes it quiet attractive. We want to "get in" before this changes, I am correct aren't I defined benefit is better?

My wife set up her pension at the same time I set up my PRSA with Irish Life, June 2004 ... so PRSA's were on the market at the time. I/We thought she had taken out a PRSA and were very surprised to learn that it was not a PRSA.
 
mdr said:
Is that legal, you are essentially opening a pension to close it again ?
Click to expand...
Perfectly Legal

Who is to say that the PRSA provider won't say the same thing about transferring the pension value ?
Click to expand...
They won't

I/We thought she had taken out a PRSA and were very surprised to learn that it was not a PRSA.
Click to expand...
Did you/she not see what type of application form she was signing? She also should have received a Policy Schedule after the policy was issued, which states what type of policy it is.
 
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