If you change jobs and move to a new employer, you may be leaving a pension scheme with your previous employer. What you may not know is that upon leaving, you have a number of options regarding this pension, known as a retained benefit. The main ones are as follows:

 

Leave it as is

One option involves doing nothing and leaving your pension as is. It will continue to be invested in line with the scheme strategy and you may be able to take benefits from the age of 50 onwards (see below). However, there are a number of risks attached to this.

 

Refund of Contributions

If you have been a member of the scheme for less than two years you may be allowed take a refund of your (employee) contributions. If the amount you have paid in is very small this could be a worthwhile option.

 

Over Age 50

If you are aged more than 50 you may be able to mature your pension and take benefits immediately. This will depend on the scheme rules but is allowed in most instances.

 

Buy Out Bond / Personal Retirement Bond

This is an option for those who would like to have more control over their retirement benefits. If you would like to choose the provider and funds into which your pension fund is invested then this may be the option for you.

 

New Scheme

If you were to join a new employer who operated its own pension scheme for employees, then it may be possible to transfer the value of your existing pension scheme to the new employer scheme. This has its own potential advantages and disadvantages depending on your own situation.

 

PRSA

It is also possible to transfer to a PRSA provided you have not been a member of the pension scheme for more than 15 years.

 

Therefore, as you can see there is no one-size-fits-all answer to this question. As with almost all aspects of financial planning, I would highly recommend seeking independent financial advice before making any decision. Should you wish to discuss, you may contact me on 087 9308181 or gerard@proactivefinance.ie.

 

Gerard Ward

19th September 2017