In company pension scheme, what happens if she leaves? whatabout AVC's

[contractor]

Hi,

Regarding my wife's pension.

She has a company pension and also contributes to an AVC.

My concern is that she has no intentions of staying with this company. As soon as things pick up she'll be moving on, maybe even sooner.

My concern is what will happen to her pension? Can she transfer it and if she does is it equivalent to cashing it in, so in the current climate it would mean a heavy loss?

And regarding her AVC, would it make sense to open up a separate PRSA instead?

Thanks.

 

[finno14]

I was a member of a company group pension scheme and contributed AVC's. I left the company 2 years ago.

Effectively what happens is that after you wife leaves, the scheme administrators will send her a letter telling her what her pension fund is worth and will ask what she wants to do with it.

They will hold on to the company contributions, you can't get your hands on these. Once she hits 65 (or retirement age) she'll get paid the value of the pension fund at that time.

The AVC's are included in the value of the pension and are locked into your pension. You can withdraw these but will get hit for tax on the full amount, note normally this is only allowed if she's been in the scheme less than 2 years.

You can't transfer the pension to a PRSA. When I left my company I had to set up my own PRSA and I enquired as to whether I could transfer my existing pension to my new PRSA. Was told that I'd need to get an actuary to value my pension etc and that would cost a fortune.

Basically they hold on to your pension until retirement.

 

[JoeRoberts]

You don't specify but I assume she is in a DC scheme.

If she is in scheme less than 2 yrs she can cash it in but may lose the value of the company contributions depending on what the deed says about vesting period.

If she is in it more than 2 yrs she cannot cash it in but is entitled to the value of the company contributions. They are hers after 2 yrs.

She can transfer it to a PRSA without an actuarial valuation if the value of the fund is less than a certain amount, I think 15k but stand to be corrected.

Even if she cannot transfer to a PRSA she can transfer to a buyout bond.