Redundancy and Tax Free Pension Lump Sum

[mollymc]

I'm in the process to be made redundant. For the redundancy payment I have been offered two options.

Option one: I will retain my right to receive a tax free lump sum from the pension scheme on retirement. If I choose to retain this right, the value of my increased exemption is reduced by an amount.

Option two: I will irrevocably waive my right to a tax free lump sum from the pension scheme on reaching retirement age in order to take a higher tax free exemption on my current ex-gratia termination payment.

Questions that I have:
a) Will this waiver only effect the pension scheme of that company that I have been made redundant by?
b) Is this waiver effecting a general right to a future tax free lump sum with a new pension?
c) If I waive the right and I want to combine this with another existing pension into one fund, what would be the result? Can this be combined or not ?
d) Anything else I should be aware of?

Thanks very much in advance, I have been round in circles trying to get some information from both employer and Mercer.

 

[dublin66]

I'm surprised you haven't been able to get an answer to these questions - all fairly straightforward if you do a lot of this type of work (as Mercer would)

a) Yes. If you have transferred pension funds from a previous employment to this would this will need to be taken into account. Waiver is in respect of current employment only.
b) No, this pension only.
c) No waiver is only for pension from this employment.
d) Obviously if you waive your entitlement now you are getting tax benefit now and not at retirement age. On a practical basis this would require that the wavier be kept on file and remembered at retirement age.

 

[mollymc]

Thank you so much for your reply. I really appreciate it. Mercer wouldn't deal with my queries as my company wasn't using them to process the redundancy. Your replies have been very helpful.