T
Hi,
I will be leaving work just shy of my two year contract and am going to be getting my pension contributions back, just wondering does it get added to the last pay cheque or how does it work?
Thanks,
Tony
Are you sure? I thought that refund of personal/AVC contributions (where an occupational fund member has less than two years membership on leaving the job) were taxed at 20% so a high rate taxpayer "saves" 21% tax?Also as you received tax relief on your contributions, what you get will be less 41%/20%, depending on your higher tax rate[broken link removed]
The statutory vesting time for employer contributions is 2 years. In some cases employers may unilaterally reduce this. Double check that to see if you will lose them if you cash in OR if you leave the money in the scheme, transfer to another occupational scheme, transfer to a buy out bond etc.Thanks for the replies.
I am aware that i can transfer my benefits but I've been here less than two years, i think i loose the employee contributions anyway since i didn't fulfill my contract
I don't think that there is necessarily any rush. Normally you can opt for transfer to another scheme or buy out bond any time after leaving. Not sure if an encashment decision needs to be made sooner.My date of resignation is August 22nd and I'm leaving September 3rd so that doesn't give me a whole lot of time if theres paperwork to be completed.
Isn't it years of membership of the occupational scheme and not necessarily years of service that counts?When you leave a company you will be issued with leaving service options by the pension provider the norm is as follows:
Less than 2 years service
I was aware of the 20% 'exit' tax in these circumstances regardless of the marginal rate of tax, but why is this in place? Is it intentional (and if so, why) or just a loophole that was never dealt with?
It is a bit of a loophole
When a member's contributions to an exempt approved scheme are refunded in his lifetime or where his withdrawal benefit is a policy surrender value appropriate to his contributions, the administrator becomes liable to tax on the gross refund under Case IV of Schedule D at the standard rate of tax in force at the time of payment. The tax is chargeable on the amount paid (inclusive of any interest element) or, if the rules permit the administrator to deduct this tax before payment, on the amount before such deduction.
The refund may be transferred to a PRSA without a tax charge.
Question:
If you are in the pension for more than 2 years, can u still reclaim your money or does it have to be re-invested??
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