# Lump sum early retirement from Defined Benefit scheme



## asdfg (19 Oct 2007)

At Normal Retirement Age (65) most defined benefits schemes allow you to take 1.5 times salary as a tax free lump sum. 

Can someone still take the lump sum payment as 1.5 times salary if they opt for early retirement at say 55 or is it reduced in some way and if so how is it calculated.

Any links to revenue. pensions board etc would be appreciated


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## MMilken (19 Oct 2007)

*Re: Lump Sum Early Retirement from Defined Benefits scheme*

Your first reference point should be the Scheme/Plan Trust Deed and Rules.

Your second reference is the Revenue Pensions Manual.

The Pensions Board have absolutely no input on Pension Scheme Rules, they simply ensure compliance with Rules as set-out in the Act.


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## cormacol (21 Oct 2007)

THe Revenue limits specify that if you retire before your NRA then your tax free cash amount is reduced. THe one thing to note that it isn't 1.5 times your final salary but 1.5 times your final remuneration (salary + allowance for fluctuating elements)

Also if you have other pension arrangments then your total tax free cash accross all arrangements is limited to 1.5 times final earnings


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## asdfg (22 Oct 2007)

> THe Revenue limits specify that if you retire before your NRA then your tax free cash amount is reduced


 
Anyone any idea how the reduction is calc


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## boaber (22 Oct 2007)

The Revenue Pensions Manual sets out the calculations

www.revenue.ie/index.htm?/pensions_manual/pensionmanual.htm


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## hlm (22 Oct 2007)

Very broadly the lump sum on early retirement is the maximum at normal retirement reduced pro-rata by your service to early retirement and your service to normal retirement. However, it depends on other factors as well incl any benefits you have from other pension schemes, and different salary definitions between the scheme and the revenue maximum. Why don't you ask your pension provider to prepare some estimates for you in confidence.


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