PRB vs ARF - PRSA transfer

L

luckycat007

New Member
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Hello all - I've recent changed jobs. I had a PRSA with Irish Life, and will have a new personal PRSA with Zurich.

The two options that Irish Life gave me upon exit were: 1. Transfer 100% of my PRSA to a PRB, or 2. Cash Lump Sum of 25% of my PRSA + Transfer to an ARF. (A third option was to take a full cash lump sum or annuity -not options for me under consideration).

I can read loads of information on PRBs and ARFs separately but not clear on what differences there are between the two options. I'm interested in flexibility and deciding what funds to invest in, and thinking of moving this money to Zurich as well, in either a PRB or ARF. I'm considering taking some lump sum in cash, which seems to restrict me to an ARF for the balance.

Thanks in advance for any assistance/pointers out there!
 
PRB is a pre-retirement product.

ARF is a post-retirement product.

You can't take tax-free-cash from a pre-retirement product. You have to mature it and move balance to a post-retirement product.


Gerard

www.prsa.ie
 
I am 55...so in this situation I can use an ARF, even though I'm not yet retired? Is there any benefit to moving all of the PRSA funds to a PRB if I have both options?
 
There's something not right here.

Here's the IL transfer matrix between products.

Are you sure it's not PRSA to PRSA?

There isn't enough information. Are you getting information from an IL sales support member of staff, an IL direct sales advisor or a broker?
 
Thank you all for your feedback/information.

@GSheehy Interesting - Yes options that IL have provided (in a "Statement of Options" document they sent me shortly after I left my previous company and I called initially to confirm these choices) were 1. Deferment option - transfer to PRB or to a new employers plan (note: new company doesn't have a PRSA, so I'm opening a personal PRSA to self-fund), 2. Immediate Retirement - Cash lump sum or Income for life (annuity), 3. Alternative Retirement Options - Cash lump sum up to 25% PLUS Transfer to ARF or balance as taxable lump sum.
 
It was an Occupational Pension Scheme (OPS) you were in? Not a PRSA Scheme.

If it was a PRSA, the letter letter is wrong. Quiet possible that a mistake was made,

If you can do PRB from OPS then, yes, you could transfer to PRB and then mature that to access tax-free-cash with balance to ARF and you don't have to take income from it for another 5 years. Whether that's the right decision or not will depend on your circumstances,
 
GSheehy said:
It was an Occupational Pension Scheme (OPS) you were in? Not a PRSA Scheme.

If it was a PRSA, the letter letter is wrong. Quiet possible that a mistake was made,

If you can do PRB from OPS then, yes, you could transfer to PRB and then mature that to access tax-free-cash with balance to ARF and you don't have to take income from it for another 5 years. Whether that's the right decision or not will depend on your circumstances,
Click to expand...
If it's an OPS, he can just mature it straight away without having to transfer it to a PRB first.
 
I'm sorry about terminology - first time dealing with this and from another country (where I know a lot more about different investment vehicles). My plan with my previous employer was probably an OPS not a PRSA. It was a "Pension" provided by my previous employer. The contract was an "Irish Life Empower Master Trust", and referred to as a "Retirement Solution Plan' and "company pension". Nowhere does my contract say Occupational Pension Scheme (OPS) but it also doesn't say PRSA.

Sorry about this confusion on my end... So seems like I can do an ARF, with some cash out now and continue investing via the ARF... I don't absolutely need any cash up front now but thinking about that to just take a chunk out of my mortage. I have already other investments outside of the country (another wrinkle in all of this) but would still have a decent chunk to keep in an ARF until I retire..maybe 10 years from now.
 
luckycat007 said:
I'm sorry about terminology - first time dealing with this and from another country (where I know a lot more about different investment vehicles). My plan with my previous employer was probably an OPS not a PRSA. It was a "Pension" provided by my previous employer. The contract was an "Irish Life Empower Master Trust", and referred to as a "Retirement Solution Plan' and "company pension". Nowhere does my contract say Occupational Pension Scheme (OPS) but it also doesn't say PRSA.

Sorry about this confusion on my end... So seems like I can do an ARF, with some cash out now and continue investing via the ARF... I don't absolutely need any cash up front now but thinking about that to just take a chunk out of my mortage. I have already other investments outside of the country (another wrinkle in all of this) but would still have a decent chunk to keep in an ARF until I retire..maybe 10 years from now.
Click to expand...
And I would like to apologise on behalf of the pension industry for giving so many names and acronyms to what are essentially the same thing...a pension. Although the fact that I know the difference between them all and what those differences are keeps me in a job. :)

If you want to take 25% and pay down your mortgage, you can do it straight from the current pension and transfer the other 75% to an ARF.

If you don't want to mature it now, you can leave it where it is or else move to a PRSA or a PRB. The prices on the PRB are more competitive and you have the choice at maturing it at any time before 60 without having to retire. Once you reach 60, you can do what you want with any pension.


Steven
www.bluewaterfp.ie
 
@Steven Barrett Super helpful, and all those who replied to my query. I now have a clearer understanding of options. Steven I think the system I'm from in the US would be equally confusing to a newbie.

Jon
 
Steven Barrett said:
And I would like to apologise on behalf of the pension industry for giving so many names and acronyms to what are essentially the same thing...a pension. Although the fact that I know the difference between them all and what those differences are keeps me in a job. :)

If you want to take 25% and pay down your mortgage, you can do it straight from the current pension and transfer the other 75% to an ARF.

If you don't want to mature it now, you can leave it where it is or else move to a PRSA or a PRB. The prices on the PRB are more competitive and you have the choice at maturing it at any time before 60 without having to retire. Once you reach 60, you can do what you want with any pension.


Steven
www.bluewaterfp.ie
Click to expand...
The government attempted to simplify it 20 years ago with the introduction of the PRSA, but they forgot to do away with the PRB/BOB and PPP.
 
Hi Folks,

It was good to read this thread as I am in a similar position. I moved jobs just over a year and after just turning 50 I started to look at my pensions. I have a decent pension with my current employer which I assumed is locked till I retire, but I was wondering what I do with my old pension pot. It was a defined contribution pension. I only found out yesterday what options I have are

1). Transfer Payment to your new Company’s Pension Plan
2). Deferred Retirement Benefit from the Plan
3). Transfer Payment to a Pension Transfer Bond (Buy-Out Bond)
4). Transfer Payment to a PRSA

In essence they are all pensions but now that I have reached 50 and have a new employer pension what is the best option. I assume from my limited option 3 gives me the best option as I can access 25% of the fund if anything occurs? If so where do I even start to look for a PRB and what is the process of transferring?

thanks
 
You could leave it where it is if it's doing okay and the charges are low ie. you could go the PRB route later.

If you want to go the PRB route now you'd be transferring it into your own name and the existing scheme would have no more to do with it.

You'd source a PRB from an intermediary. You can do it with advice or on an execution only basis and costs are reflected in the level of service you require. Complete a PRB application and submit it to the product provider (via the intermediary) so that the shell of it is set up to receive the transfer and you'd be give a policy number.

You'd then complete the options form that you have from the existing pension company asking them to transfer the fund to a PRB with XYZ Company.

The PRB provider would send a Willing & Able (to accept the transfer) Letter to the holding company with details of where the EFT fund value should be sent.

Once received, the PRB policy would be issued to you with opnline access to the account.

Gerard

www.prsa.ie
 
Thanks Gerard,

I know i could leave it and apart from the low charges what are the Pro's and Cons of leaving it where it is, over a PRB? The main worry is what happens if something unforseen happens and I need funds quickly?

just for info my fund lost money over the last two two years , my own fault as I has assumed it was all in equities but the company had us in a default pension choice of funds and one of the 4 funds in that tanked massively after covid. Rightly or wrongly I have since moved most the fund into equities.
 
Advantage of PRB is that you are no longer dependent on the trustees of your old company. There was a case here a while back where someone had reached retirement age but couldn't get the trustees from a previous company pension plan to release the money. I think it was an issue that the previous trustees had left the company and the company had not got around to appointing new trustees. Maybe this is no longer an issue with the new master trust approach. But I still think it's better not to be dependent on trustees from a previous employer.
 
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