Hi,
I have read the emany excellent replies on AAM re. this debate - I would very much welcome your views in relation to my own situation, outlined below.
I’am planning to change jobs in the coming weeks, to join a privately owned company. My current personal circumstances are : Married, with two kids (16 & 14), single income (salary 40K), no mortgage.
I have 24 years service with my current employer, who operates a Defined Benefit pension scheme. Under the rules of the scheme, on leaving this employment. my accrued retirement benefit with the current employer ( 24/60th x Salary at date of leaving employment x 24 (years service at time of leaving employment) ) the value of my benefit will be increased annually by 4% or the CPI, which ever is the lower, up until my normal retirement age. I also have an AVC fund , current value is 20K, under this pension scheme. I will reach normal retirement age in 2025 .
My new employer does not operate a Defined Benefit scheme, but is willing to contribute 10% of my salary (45K) either into a defined contribution pension scheme or PRSA, whichever is my preference .
Given the above , I would welcome your views re. the following :
Many thanks,
JP.
I have read the emany excellent replies on AAM re. this debate - I would very much welcome your views in relation to my own situation, outlined below.
I’am planning to change jobs in the coming weeks, to join a privately owned company. My current personal circumstances are : Married, with two kids (16 & 14), single income (salary 40K), no mortgage.
I have 24 years service with my current employer, who operates a Defined Benefit pension scheme. Under the rules of the scheme, on leaving this employment. my accrued retirement benefit with the current employer ( 24/60th x Salary at date of leaving employment x 24 (years service at time of leaving employment) ) the value of my benefit will be increased annually by 4% or the CPI, which ever is the lower, up until my normal retirement age. I also have an AVC fund , current value is 20K, under this pension scheme. I will reach normal retirement age in 2025 .
My new employer does not operate a Defined Benefit scheme, but is willing to contribute 10% of my salary (45K) either into a defined contribution pension scheme or PRSA, whichever is my preference .
Given the above , I would welcome your views re. the following :
- What is my best option to proceed with a PRSA or DC pension with the new employer ? I understand PRSAs offer more flexibility re. what one can do with the funds on reaching retirement age ?
- Hoping inflation does not erode the value of my accrued retirement benefit from my old employer's DB scheme (this is a concern) , whatever option I choose, it will be to try and breach the gap in what would have been my full pension entitlement under the old DB scheme, which amounts to a gap of 16/60th of final salary , if I had stayed with my current employer. I don’t expect that I will be able to create a fund value large enough to bridge this gap completely, but if I were to contribute 10% of salary + my new employers 10% for the next 18 years, what sort of fund value / pension income could I expect to generate from both options i.e. a PRSA or DC pension ?
- Whatever option I choose, when I add on the state pension, can I expect to have a reasonable income on reaching retirement age ?
Many thanks,
JP.