If you previously worked for a company which is winding up it’s pension scheme and you have an entitlement in the scheme, you may receive a letter informing you that you must transfer your pension out of the scheme. The letter will usually give you the following options;
- Transfer your fund to the default Personal Retirement Bond chosen by the Trustees
- Transfer your fund to a Personal Retirement Bond of your own choice
- Transfer your fund to a Personal Retirement Savings Account
- Transfer your fund to your new employers scheme
Decisions regarding your pension entitlements are of critical importance in your overall retirement planning so you should take advice before selecting which option you are going to avail of. This decision is right up there with big financial decisions such as buying a house. If you do nothing your pension will automatically be transferred to the default PRB chosen by the Trustees of the scheme. There are pros and cons to each of the options however.
For example many people give serious consideration to transferring their entitlement to their current employer. Depending on your circumstances this may not be a good idea. Your pension is subject to the rules of the existing scheme. Transferring it in to your current employers scheme may restrict your options for maturing it down the line. As it stands you may be able to mature your pension under early retirement from age 50 (because you have left the employment), however if you move it to a new employer and you are still working with that new employer when you turn 50, you would not be able to mature it under early retirement.
If you would like to discuss retirement planning, contact us on 01 546 1100, by using the Contact Us or Book a Call buttons on this page, or by email to firstname.lastname@example.org.
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© Eoghan Gavigan (originally published 15 December 2016)