Transfer value

[passatt]

I was made redundant in 2004 the company operated a defined benefir pension scheme. i recently enquired about the transfer value as i am thinking of transferring it to a prsa. They have advised that the actuarial value is €121,255 however they have also advised as folows

" the transfer value of your deferred benefit without an allowance for post retirement pension increases is €95,790. Based on an update of the funding standard position at 30 June 2009 the assetts after allowing for certain priority liabilities are sufficient to cover approx 47% of liabilities of the scheme without pension increases in respect of active and deferred members. This means the reduced transfer value available is €45,021"

This is a ridiculously low amount and i am unsure what i should do, i am 50 years old, should i leave it until i retire and hope that neither the company nor the fund will be wound up or should i take the transfer value and try to make it work as part of my new PRSA.

 

[Don_08]

I was made redundant in 2004 the company operated a defined benefir pension scheme. i recently enquired about the transfer value as i am thinking of transferring it to a prsa. They have advised that the actuarial value is €121,255 however they have also advised as folows

" the transfer value of your deferred benefit without an allowance for post retirement pension increases is €95,790. Based on an update of the funding standard position at 30 June 2009 the assetts after allowing for certain priority liabilities are sufficient to cover approx 47% of liabilities of the scheme without pension increases in respect of active and deferred members. This means the reduced transfer value available is €45,021"

This is a ridiculously low amount and i am unsure what i should do, i am 50 years old, should i leave it until i retire and hope that neither the company nor the fund will be wound up or should i take the transfer value and try to make it work as part of my new PRSA.

Leave it where it is - the scheme should be signed up to a funding proposal to get it back to 100% within a certain timeframe. Unless you have knowledge that the company is going to go bust, or they are going to windup their scheme. Also when you reach normal retirment age in the scheme you will be able to access the full pension you are entitled to all going well - and it will be a guaranteed amount per annum. Very unlikely you will be able to replicate that pension through a PRSA - even if you had managed to get the full 121k tv.

 

[passatt]

Thanks for the reply Don - Company appears to be pretty stable although you never can be sure -if it is wound up would i still be entitled to the reduced amount or would the rules change?

 

[Don_08]

Depends on whether money is injected in at that stage or not, and on how markets have performed. There is currently no obligation on a company to make good any deficit if they do decide to wind up.