gnf_ireland
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I think you're missing 1 key advantage here. I could be completely wrong, but I understood that say for example you had 5 years with previous employer, and if your new employer allows you to transfer it into their pension, then you've already met their 2 year criteria to keep any employee contributions? So if you leave the new job after a year you keep the employer contribution?Option 3: Transfer Your Pension Into Your New Employers Pension Scheme
Advantages;
- You maintain full active control over your entire pension fund.
You don’t need to rush into a decision . You can leave it with the previous employer pension scheme until you investigate your options .
Your wife’s decision ultimately boils down to how much control she wants to have over her fund.
if she has left her employers scheme then she wouldn’t be able to make contributions into it again as a deferred member.
I posted this before but it’s relevant for those wondering what to do when they leave employment and wondering about downsides as you’ve mentioned.
What to do with your pension on leaving employment.
Option 1: Leave Your Pension Where It Is
Advantages;
Disadvantages;
- Charges are likely to be lower in a large group scheme
- Benefits can be accessed at 50 with permission from both the employer and scheme trustees.
- Any retirement options, including early retirement, are bound by scheme rules and require permission form the trustees.
- Large schemes have limited investment options since they’re built for groups of employees, not individuals.
- Trustees are not obliged to keep in contact with deferred members.
- If the scheme is closed you could lose your accumulated rights if you are transferred out to a PRSA instead of the current PRB option.
Option 2: Transfer Your Pension into a Personal Retirement Bond (PRB)
Advantages;
Disadvantages;
- Full cash value is held under one single premium contract that is owned by you personally.
- Your accumulated rights are preserved i.e. all salary and service details are recorded which maintains your rights to the ‘lump sum only’ option.
- You can access your benefits from a PRB from age 50.
- You have full control over your money and the investment decisions.
- You can design a personalised, risk tailored portfolio that suits your tolerances, risk profile and long term growth goals.
- The annual management charges tend to be higher depending on the funds and/or assets chosen.
Option 3: Transfer Your Pension Into Your New Employers Pension Scheme
Advantages;
Disadvantages;
- You maintain full active control over your entire pension fund.
- You could lose all the accumulated rights of salary and service built up in that scheme.
So what should you do?
In most cases the best option will be the Personal Retirement Bond (PRB) since it;
A Personal Retirement Bond allows you to assume ownership of your investment so you can manage it effectively, monitor how it's doing and make changes if required so it gives you complete control.
- Maintains all of your accumulated benefits related to your salary and service.
- Allows you to manage your investment strategy
- Gives you complete control over your asset.
Kevin
www.thepensionstore.ie
Kevin,
Let's face it - it's not surprising that you disagree?!
What do these two disadvantages precisely mean?
1. Any retirement options, including early retirement, are bound by scheme rules and require permission form the trustees
2. If the scheme is closed you could lose your accumulated rights if you are transferred out to a PRSA instead of the current PRB option
@kevhenry @elacsaplau Thanks for the commentary above. I am sure there is devil in the detail in 1% of cases which make things tricky or changes kick in later that make decisions more complex.
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