# Optimising defined benefit pension for transfer value



## leavingDB (19 Apr 2007)

Hi, first post & a big question!

I'm in the situation where I've been offered to move jobs where I am currently on a DB pension. I haven't made any AVCs over that period and and have been making the mandatory contribution over the last 9 yrs, yes bad form I know. I'm 37 years old

There is no DB pension in the new co., afaik they have a DC pension like most others. Although nothing on pensions has been discussed so far I am expecting a transfer value calculation to be made.

My question is how I can skew this calculation in my favour between now & the proposed move in a 3 months? ACVs or some other method? I have some SSIA money that can be put to use for this

Also I might be interested in what I believe is a Buy out bond(?) what encashment options are there if I want to fund some much needed time out?

Thanks..great site


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## LDFerguson (20 Apr 2007)

When you leave your current employer, there's no obligation on you to transfer your DB benefits out of the scheme.  You can leave them alone and get a deferred pension when you retire.  Given the guaranteed nature of DB schemes, it's certainly worth considering.

You can investigate the possibility of buying back years in the DB scheme before you go.  This may or may not be permitted.  You should do this only to increase the guaranteed pension at retirement from the DB scheme as it's unlikely to improve the transfer value sufficiently in such a short space of time to make it worth while.  

With nine years in the scheme, there are no encashment options - regardless of what you do when you leave the current scheme, you can't access any of the funds until retirement.

Liam D. Ferguson
www.ferga.com


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## Guest126 (20 Apr 2007)

leavingDB said:


> I'm in the situation where I've been offered to move jobs where I am currently on a DB pension. I haven't made any AVCs over that period and and have been making the mandatory contribution over the last 9 yrs, yes bad form I know. I'm 37 years old


 
Not bad form - in DB that is usually enough.
Think seriously before moving from a job with a DB plan!!



leavingDB said:


> My question is how I can skew this calculation in my favour between now & the proposed move in a 3 months? ACVs or some other method? I have some SSIA money that can be put to use for this


 
If you are higher rate taxpayer best pay AVCs through payroll rather than from SSIA.
However, as Liam Ferguson said...no real advantage in doing this now just because you're going to leave employer - unless they allow you buy years (which they probably do not).



leavingDB said:


> Also I might be interested in what I believe is a Buy out bond(?) what encashment options are there if I want to fund some much needed time out?


 
You have > 2 years service so cannot encash, there may be an Early Retirement Option from age 50 onwards if that is any use!


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## leavingDB (21 Apr 2007)

thanks for the advice, makes sense.

however I'm asking HR pensions person(when they return from leave) to create a 20% salary AVC contribution on every paycheck on the off-chance...i'm on 50k

i am seriously considering not leaving! theres a 30% salary inducement and the carrying over of other benefits to make this move, the big stumbling block is the non-comparable pension

not sure about buying years, i'll have to pull out the booklet to see, proabably not i imagine


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## punter (22 Apr 2007)

leavingDB said:


> thanks for the advice, makes sense.
> 
> however I'm asking HR pensions person(when they return from leave) to create a 20% salary AVC contribution on every paycheck on the off-chance...i'm on 50k
> 
> ...


 
I left an employment some years back and considered transferring funds from my DB pension to a buy out bond. I did a lot of research and "worked the numbers". I shouldn't generalise, but to keep it simple, there are almost no circumstances in which it makes sense to move money from a DB scheme to either a buy out bond or a DC scheme. You will probably never again have the opportunity to join a DB scheme and you need to very seriously consider giving up the one you have.

A few points to consider:

Assuming that the DB scheme adheres to the norms you are probably entitled to a pension of 9/40 of (50K less state pension) when you reach 65. This will be preserved (increased by a few percent each year) until you retire. It will probably also be increased once payment commences. (The actual details are of course scheme dependent)
If you go to a buy out bond/transfer to a DC scheme, the transfer out value will be calculated as the cost of purchasing an annuity to pay the above pension when you reach retirement age. Built into this, and this is the fatal flaw, will be an assumption that the transfer out value will grow at 6% or 8% per annum between now and your retirement date. You will have to manage this fund, and you assume all liability for any shortfall caused by underperfoermance. Unless you consider yourself to be a worldbeating fund manager, I would suggest that your chances of 6% or 8% compound growth over a 28 year period are slim.
The only reason I found to consider moving is if you consider it likely that your current employer will raid the DB fund. This is possible but unlikely.


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## LDFerguson (23 Apr 2007)

Another possible argument in favour of transferring out of a DB scheme after you leave is if there's a risk that the scheme may become insolvent e.g. if the employer cannot afford to keep making the necessary contributions to keep it solvent.  Like all guarantees, the guaranteed benefits in a DB scheme are only as valuable as the company that's underwriting the guarantee.


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## asdfg (23 Apr 2007)

> you are probably entitled to a pension of 9/40 of (50K less state pension) when you reach 65.


 
I think the figures should be 9/60 (40/60 being the max) less 9/40 of the state pension (40/40 of the state pension being deducted in the case of a full DB pension.


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## aidan119 (23 Apr 2007)

If you transfer your funds into a new DC scheme you will pay annual charges on the value transferred ( maybe 1% pa). You may also lose on the initial investment of the transfer transfer lump sum into the new scheme.
If you stay as a deferred pensioner in the DB scheme you suffer none of this.

As mentioned, the risk of staying is whether the DB scheme employer is able to keep it funded. If you are with a major multinational I would not worry as much as if its a small local employer. Check the current solvency of the scheme for starters.
You need to balance this with the general risk of the DC scheme anyway.

Many schemes allow purchase of extra years service. If so it may be worthwhile to do AVC as you could buy extra pension rights cheaper than on the open market.
Eg. you have 30k avc. The actuary will project a future value based on the investment assumptions within the DB plan ( say 6~8%). Then he works back the current pension from this future value. So you effectively get a guaranteed return on your investment with a guaranteed pension amount. I plan to try this myself when I leave my current job. Not 100% sure it will work but worth a try. 

I would definetly stay in the DB scheme. In considering alternative employment without a DB scheme I think you need to value the current DB pension at about 20% of salary. Also consider what other benefits go with the DB scheme that may not be with the new DC scheme.- disability benefit,widows pension,death in service,possibility of increased pension in payment.


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## leavingDB (2 May 2007)

Hi, thought I'd check back into this for an update, the rules are as follows on my DC which in the meantime I've opted to make a 20% AVC contrib to. Looking at the conditions, I'd be cracked to leave this scheme voluntarily...it's kind of a hang-over from the Civil Service era

Long piece, sorry. I have to check if the normal retirement age is still 60, thought it was 65!!! 5 years is a huge difference to my mind

On your retirement, which can occur between 60 and 65, you will receive a pension of:
*1/80th x Net Pensionable Remuneration x Pensionable Service*
    In addition, you will receive a gratuity of:
*3/80ths x  Pensionable Remuneration x Pensionable Service*
    To meet part of the cost of the benefits of the scheme, you are required to contribute at the following rates:

*Main Scheme *3½% of Net Pensionable Remuneration, plus1½% of Pensionable Remuneration
*Spouses’* and *Children's Scheme*:1½% of Pensionable Remuneration

    The Company pays the balance of the cost of benefits as recommended by the Actuary.
    You may increase both your pension at retirement and your other benefits by paying Additional Voluntary Contributions
    (AVCs) to the defined contribution scheme.

    The total of your normal contributions and your AVCs qualify for tax relief up to certain limits as outlined below:
*Age   Limit*
    Up to 30  15% of taxable earnings
    30-40   20% of taxable earnings
    40-50   25% of taxable earnings
    50-55   30% of taxable earnings
    55-60   35% of taxable earnings
    Over 60   40% of taxable earnings


*Lump Sum on Death Before Retirement*
    If you die before your Normal Retirement Date while employed by myCorp, you are covered for a lump sum of:
*4 x Salary plus the value of your Personal Retirement Account*

    If you die while employed by myCorp, your beneficiary will be paid your death benefit.  You may nominate whom you wish to be your beneficiary by completing an Expression of Wishes form available from the Human Resources Department; however, the Trustee's of the plan of which you are a member have ultimate discretion in determining to whom to pay the benefit.

*Spouse’s Pension on Death Before Retirement*
    In addition to the lump sum described above, if you are married, your spouse will be paid a pension equal to:
*50% x Your Prospective Retirement Pension*
    In this case, however, an offset of once rather than twice the State retirement pension is used to calculate the benefit.
    Dependants’ pensions increase in line with inflation to a maximum of 4% p.a.  The spouse’s pension ceases on remarriage or death.  Children’s pensions are also payable.

*Spouse’s Pension on Death After Retirement*
    Provided you are married before the date of your retirement, your spouse will be paid a pension from the date of your death, after retirement, equal to:
*50% x Your Pension*
    Again, an offset of once rather than twice the State retirement pension is used to calculate the benefit.  Dependants’ pensions increase in line with inflation to a maximum of 4% p.a.  The spouse’s pension ceases on remarriage or death. Children’s pensions are also payable

*INTRODUCTION*
We have pleasure in providing details of the myCorp Ireland Defined Contribution Pension Plan
for all members. The Plan was established with effect from 11 May 2001, but also caters for
those who had earlier been members of an XXX pension plan and who agreed to transfer their
funds to this Plan.
The Plan has been established to provide you and your dependants with financial security during
your working lifetime through the death-in-service benefits, and in retirement by pension payments.
This booklet has been prepared to explain to you, simply and concisely, the various benefits of the
Plan which the Company operates for your advantage. Please bear in mind that this booklet
cannot deal with exceptional circumstances, and also that it cannot override the terms of the
formal documents which may be inspected on request to the Company.
The benefits provided form a significant part of the overall benefits being provided for you by the
Company and you are encouraged to study this booklet, together with the personal benefit
statements produced annually.
As the Plan develops and governing legislation changes, this booklet will be amended. Please
keep this booklet safely for further reference.
If you have any queries about the plan or your benefit entitlements please contact:


*CONTRIBUTIONS*
How much do I pay ?
Your contributions to the Plan each year will be 5.3% of your Salary.
How much is the Company’s contribution on my behalf ?
The Company’s contribution is 9.7% of your Salary, resulting in a total contribution of 15% of
Salary being made on your behalf.
The Company is not obliged to contribute on behalf of AVC only members.
What about tax relief ?
Your regular contributions qualify for full tax and PRSI relief and this will be arranged by the
Company when you start to contribute to the Plan.
How can I increase my contributions for a larger pension benefit ?
Additional Voluntary Contributions (AVC’s) are extra contributions which you can make on an
entirely voluntary basis to further increase your retirement benefits or purchase additional life
cover. You can elect to make AVC’s in an annual single contribution or as an automatic deduction
form your payroll.
There are annual revenue limits on the amount of AVCs that can be made to a Pension Plan. The
limits below are age related and include your normal pension contributions (5.3%).
Age Limit
Up to 30 15% of Earnings
30-40 20% of Earnings
40-50 25% of Earnings
50+ 30% of Earnings
The attraction of making AVCs is the extent to which tax and PRSI relief is available. Please refer
to the Human Resources Department for more information.


* BENEFITS ON RETIREMENT*
When can I retire on pension ?
In normal circumstances you will retire on your 60th birthday (your Normal Retirement Date).
With the consent of the Company, you may retire earlier at any time on grounds of incapacity due
to ill-health or injury, or if you are over age 50. With the consent of the Company, you may be
allowed to defer your retirement beyond your Normal Retirement Date.
How is my pension at Normal Retirement Date worked out ?
Throughout your membership of the Plan you and the Company are building a retirement fund -
your Personal Retirement Account. Each month contributions are paid toward this retirement
account. The contributions are used to buy units in a fund or funds of your choice from a range of
funds available. Investment returns earned by the fund manager are reflected in changes in the
unit price.
The value of your Personal Retirement Account will be used to purchase a pension from the date
of your retirement, payable for the remainder of your life. The annual amount of the pension will
depend upon the options you elect at retirement, the amount of funds available, interest rates &
pension annuity rates at retirement.
The benefit statement issued to you will illustrate the pension you may possibly receive at 60,
assuming you continue to work for the Company, and taking account of an assumed rate of salary
increase, interest rate and investment performance. This illustration will be constantly monitored
in order to give you the best possible information.
Your choice of options at retirement will include:
• a lump sum, which is tax-free under current legislation
• a pension for life
• a pension for your spouse or dependants in the event of your death
• adding an escalation factor to the pension to protect against inflation.
You will be advised regularly as to the possible level of your benefits at age 60. You are
encouraged to monitor the progress of your fund at regular intervals.
Can I retire earlier ?
Yes, subject to the Company’s consent, and provided you are over age 50, you can retire before
your Normal Retirement Date and your pension can start immediately. You should be aware that
the amount of early-retirement pension will depend on the funds available, interest rates and
pension annuity rates, and is likely to be paid for a longer period than anticipated; thus, the
benefits available will be less than those at your Normal Retirement Date.
What if I retire later than Normal Retirement Date ?
If your retirement is deferred, your pension may also be deferred until the date you actually retire,
or it may commence on your Normal Retirement Date if you wish. Usually contributions cease and
the accumulated fund will remain invested until you actually retire.

* How will my pension be paid ?*
Your pension will be paid by monthly instalments in advance starting when you retire, guaranteed
for life.
* May I take cash instead of pension ?*
At the date of retirement you may, if you wish, use part of your fund to provide a lump sum, which
is tax-free under current legislation. The maximum lump sum allowed by the Revenue
Commissioners (inclusive of any other pension entitlements) at Normal Retirement Date, provided
you have at least 20 years’ service, is
1 1/2 x final salary
If you apply to exercise this option, you will be advised of the impact on your remaining annual
pension benefit.
* What are my AVC Options at Retirement?*
Approved Retirement Fund (ARF)
If you have made AVCs, that part of your Personal Retirement Account representing your AVCs
can be applied, along with the balance of your Personal Retirement Account, to provide benefits
at the time of retirement as described above. An alternative is to leave your AVC fund invested
after you retire.
If you prefer to leave your AVCs invested after retirement, this can be done by transferring your
AVC fund at retirement to a special type of investment fund called an “Approved Retirement Fund”
(ARF). ARFs are offered by a number of “qualifying fund managers”. The choice of investments
within an ARF can range from bank accounts to unit-linked funds.
There is no tax payable on transferring your AVC fund to an ARF. In addition, the investment return
on an ARF is exempt from tax for as long as it remains within the fund. Any withdrawals made
from your ARF, however, are subject to income tax and PRSI deductions at your marginal rate.
These taxes will be deducted at source by the fund manager.
You may invest all of your AVC fund in an ARF as long as your total annual income including Plan
Pension and State pension is at least €12,700 per annum. If your total pension is less than
€12,700 per annum, some restrictions apply. In this situation, you must set aside the first
€63,500 of your AVC fund (or the total value of your AVC fund less any tax-free lump sum taken,
if less) in a special type of ARF called an “Approved Minimum Retirement Fund” (AMRF). You
cannot make withdrawals of your original capital from an AMRF until you reach age 75. If your
AVC fund after taking any tax-free lump sum exceeds €63,500 the excess can be put into an
ordinary ARF from which withdrawals can be made at any time.
Your ARF/AMRF can be left as an inheritance on your death.
Please note that the ARF / AMRF options only apply to that part of your Personal Retirement
Account relating to AVCs, and are not available in respect that part of your Personal Retirement
Account relating to normal plan contributions.
The flow chart on the next page summarises your AVC options:

* Summary of AVC Options at Retirement*
The following is a graphical summary of your options at retirement in respect of that part of your
accumulated fund at retirement that relates to AVCs:
Plan Registration
Details of the Plan have been forwarded to the Pensions Board. The Plan’s registration number is
PB 129302. If in the future you should wish to contact the Pensions Board (for example, if you
leave and lose touch with the Company), you can write to:
The Registrar of Pension Schemes
The Pensions Board
Verschoyle House
28/30 Upper Mount Street
Dublin 2
quoting the registration number above.

* Want to keep some or all of your AVC fund invested after retirement?*
Use AVC fund to provide extra retirement
benefits within Revenue limits and/or a
taxable cash sum.
Annual income greater than €12,700 p.a.?
AVC fund greater Than €63,500
yes
no
no
Approved Retirement Fund (ARF):
Grows tax-free. Cash withdrawals can
be made at any time, subject to tax
Approved Minimum Retirement Fund (AMRF):
Grows tax-free. No withdrawals of original capital allowed before age 75, unless used
to purchase an annuity. After age 75, the fund automatically becomes an ARF.
yes
yes
no
Excess over
€63,500
Excess over
€63,500

* BENEFITS ON DEATH*
What benefit is paid if I die ?
If you die in service, before your Normal Retirement Date, you are covered for a lump sum of:
2 x Salary plus the value of your Personal Retirement Account
This benefit will be paid by the Trustees to one or more of your Beneficiaries or your estate as
they shall decide. You may, if you wish, indicate on the attached Nomination Form the person or
persons you would like to benefit. Your wishes will not be binding on the Trustees but they will be
taken into account.
AVC only members shall only have an entitlement to the value of their member’s account on death.
Can I increase my life cover ?
Yes, it is possible to increase the maximum amount of your cover from twice salary to four times
salary at the renewal date without providing medical eveidence. Changes may also be made
during the year if there is a life event e.g. marraige, baby.
Please note that the maximum lump sum permitted by the Revenue is four times salary plus the value
of your personal retirement account.
This additional cover is paid for by an ongoing payroll deduction. Please contact Human
Resources for further information.
Will my Dependants be paid a Pension if I die in service?
If you are married, your spouse will be paid a pension equal to:
25% x Salary
In the event of both parents death, a Children’s Pension is also payable for each eligible child.
Do my Dependants’ Pensions Increase?
Your dependants’ pensions will also increase in the course of payment by 3%
*NOTE*
In exceptional circumstances, the Insurers may, following medical examination, limit the
incremental amounts of any increase in your death-in-service benefits. You will be notified if this
applies in your case.

*BENEFITS ON LEAVING*
What happens if I leave service before Normal Retirement Date ?
If you leave service before Normal Retirement Date for any reason, you cease to be covered for
your death benefits. You have the following options regarding your pension rights:
A. If you have less than 2 years’ Qualifying Service, a refund of the value of
your own contributions (subject to 20% tax)
or
B. A deferred benefit based on the value of your Personal Retirement Account
or
C. Transfer your Personal Retirement Account to your new employer’s
pension plan, or to a Personal Retirement Bond/Personal Retirement
Savings Account (PRSA) policy
These options are explained in more detail below.
May I always have the option to take a refund of my contributions ?
No. The 1990 Pensions Act states that if you have in excess of 2 years’ Qualifying Service, you
cease to have the option to take a refund of contributions.
Can I transfer my pension entitlements ?
Yes, your Personal Retirement Account may be transferred to:
(a) an exempt approved pension arrangement of another employer, or
(b) an individual assurance policy approved by the Trustees for such purpose.
(c) a PRSA policy
Will there be any deductions made from my refund of contributions ?
If you are entitled to take a refund of the value of your contributions, a deduction will be made
equal to the tax for which the Trustees must account to the tax authorities. The current tax
rate is 20% of the refund.

* INVESTMENT INFORMATION*
Member Investment Choice
Member Investment Choice allows you to select your investment options from a range of Pension
Funds selected by the Trustees. This enables you to adopt an investment strategy for your
Individual Retirement Account, tailored to your own investment philosophy,
There are six fund choices open to you, four funds operated by Bank of Ireland Asset Management
(BIAM) and two funds operated by Irish Life Investment Managers (ILIM), namely:-
BIAM All Equity Fund (High Risk Option)
BIAM Managed Fund (Medium Risk Option)
BIAM Fixed Interest Fund (Pension Protection Option)
BIAM Cash Fund (Capital Protection Option)
ILIM Indexed Global Equity Fund (High Risk Option)
ILIM Consensus Managed Fund (Medium Risk Option)
Details of these funds are given in this document.
You need to decide how your Individual Retirement Account is invested by selecting any one or
more of the funds described, in such proportions as you decide. E.g you may decided to invest 50%
of your contributions in the BIAM All Equity Fund and 50% in the ILIM Consensus Managed Fund.
Once you have decided on an investment fund or a mix of funds, you will have the opportunity to
re-select or to vary your choice at various stages. To do this you will need to submit an
Investment Switch Form (see Appendix 1).
To facilitate you in making informed choices, presentations from each of the Fund Manager will
take place during the year and regular investment updates will be made available to you.
If you do not indicate an investment preference you fund will be defaulted as outlined below.
Contributions
The default fund will be the ILIM Consensus Managed Fund for all contributions. This will only
apply where you do not make an investment choice. This can be changed at any time in the future.
Please read the attached summaries carefully and make sure you obtain as much information as
you need to make an informed decision.
Choice of Investment Funds
As previously mentioned, , there will be six fund choices open to you, four funds operated by
Bank of Ireland Asset Management (BIAM) and two funds operated by Irish Life Investment
Managers (ILIM).
These funds will enable you select from a range of investments which best suit your own personal
needs. The funds range from a conservative investment option, which minimizes the risk of short
term fluctuations in the value of the investment to a more aggressive fund which is volatile but
offers the prospect of the highest returns.
13
Investment Philosophy
Your own investment philosophy and risk tolerance will ultimately determine the investment
strategy and investment funds you choose for your Individual Retirement Account. In deciding
upon this matter you should consider the following very carefully:
• Do you wish to actively manage your Individual Retirement Account from year to year?
• Would you like to pursue potential above average investment returns and invest in the BIAM
All Equity Fund (High Risk Option) and/or BIAM Managed Fund (Medium Risk Option) and/or
Irish Life Indexed Global Equity Fund (High Risk Option)?
• Would you be more comfortable participating in the default option which attempts to reduce
the risk of using an under performing Investment Manager.
• Would you like to combine these approaches?
• Will your pension be your only or principal source of income when you retire?
• How long into the future is it before you need your pension?
These considerations will help you to decide the degree you want to invest in the more aggressive
versus the more cautious funds. Remember, that the choice is yours, so give it due consideration.
Whilst changes can be made to alter your choices, without switching costs, withdrawing your
money. It is difficult to out-guess the market, so we would advise you to be cautious about
making short term decisions.
It is imperative that the investment strategy you adopt recognizes the long term nature of
investing in a Pension Fund, avoids the pitfalls of short term investment switches and provides
you with the opportunity to achieve real, positive investment returns over the long term.
14
Funds Available
BIAM All Equity Fund
BIAM’s All Equity Fund invests fully in company shares throughout the world. It is, therefore, fully
exposed to the severe fluctuations that can take place in world stock markets and, as such, it
represents the highest degree of risk potential among the funds on offer, but also the prospect of
the highest level of returns. Before deciding to invest in the All Equity Fund, you should be fully
aware of the risks and the likely fluctuations that will take place over time. There are no
guarantees attaching to investing in this fund and unit prices may fall as well as rise.
There are no entry costs on this fund and the only charges associated with investing in this fund
are a 0.75% annual management fee.
The Investments Manager Bank of Ireland Asset Management.
Fund Type All Equity Fund.
Risk Level High Risk Option.
Goal To achieve top quartile equity fund returns.
What the fund invests in 100% invested in international equities. At least
half of the fund will be invested in European
Company Shares.
Who should invest Somebody who does not need to use the portion
of their retirement fund in the near future
(10yrs.+) and who is not dependent on this fund
exclusively for their retirement income.
Somebody who is willing to ride out stock
market volatility in an effort to maximize longterm
returns from equities.
Somebody who can afford to take the risks
associated with investments in equities.
BIAM Managed Fund
This fund is designed to provide balanced growth through investment opportunity while controlling
risk through diversity. At any time the fund will hold a broad spectrum of asset types, including
equities (stocks and shares), fixed interest securities, cash and property holdings. The investment
manager regularly vary’s the asset mix in line with market conditions and the outlook. Returns
depend on the value of the underlying assets which are subject to market forces and can
fluctuate. There are no guarantees attaching to investing in this fund and unit prices may fall as
well as rise.
There are no entry costs on this fund and the only charges associated with investing in this fund
are a 0.75% annual management fee.

* The Investment Manager Bank of Ireland Asset Management.*
Fund Type Managed Fund
Risk Level Medium Risk Option
Goal To provide a real rate of return above inflation
over the long term. Investment returns to be
above the average managed fund in Ireland.
What the fund invests in Primarily (60-80%) in company shares. The
remainder of the fund will be invested in a
combination of government bonds, cash and
property. The exact mix of the fund at any time
will be decided by BIAM.
Who should invest Somebody who does not need to use the portion
of their retirement fund in the near future (5-10
years).
Somebody who is willing to ride out stock
market volatility in an effort to maximise longterm
returns from a managed fund.
Somebody who can afford to take the risks
associated with an actively managed fund,
which is invested largely in equities.

* BIAM Eurozone Government Bond Fund – Fixed Interest Fund*
This fund is an actively managed fixed interest fund primarily investing in government bonds. The
fund aims to protect the pension purchasing power (rather than the capital value) of your
Individual Retirement Account. There are no guarantees attaching to investing in this fund and unit
prices may fall as well as rise.
There are no entry costs on this fund and the only charges associated with investing in this fund
are a 0.30% annual management fee.

* The Investment Manager Bank of Ireland Asset Management*
Fund Type Fixed Interest Fund
Risk Level Pension Protection Option
Goal To provide protection for members as they
approach retirement in terms of the pension
purchasing power of their assets.
What the fund invests in Eurozone Government Bonds
Who should invest: Somebody who will need to use this portion of
her/his fund soon for retirement income and
who needs the purchasing power of her/his fund
to remain relatively stable.

* BIAM Cash Fund*
This fund invests in a portfolio of short term cash deposits, aims to protect the capital value of
your Individual Retirement Account and aims to provide investment returns in line with prevailing
interest rates. There are no guarantees attaching to investing in this fund and unit prices may fall
as well as rise.
There are no entry costs on this fund and the only charges associated with investing in this fund
are a 0.30% annual management fee.
The Investment Manager Bank of Ireland Asset Management
Fund Type Cash Fund
Risk Level Capital Protection Option
Goal To provide a high degree of capital security with
returns in line with euro wholesale deposit rates.
What the fund invests in Cash Deposits
Who should invest: Somebody who will need to use this portion of
her/his fund soon who needs the value of her/his
fund to stay stable. Also those who are risk averse.

* ILIM Indexed Global Equity Fund*
This is an equity fund, investing in the same type of assets as the BIAM All Equity Fund. However,
the objective is to match as closely as possible the average return achieved among the general
population of equity funds in the Irish market. As such this fund represents a high degree of risk
potential but also the prospect of a high level of return. There are no guarantees attaching to
investing in this fund and unit prices may fall as well as rise.
There are no entry costs on this fund and the only charges associated with investing in this fund
are a 0.40% annual management fee.
The Investment Manager Irish Life Investment Managers
Fund Type Indexed Global Equity Fund.
Risk Level High Risk Option
Goal To achieve average equity fund returns on a
consistent basis.
What the fund invests in The total fund is invested in international
equities, replicating the weighting that each
stock represents within the relevant market
index.
Who should invest Somebody who does not need to use the portion
of their retirement fund in the near future
(10yrs.+) and who is not dependent on this fund
exclusively for their retirement income.
Somebody who is willing to ride out stock
market volatility in an effort to maximize longterm
returns from equities.
Somebody who can afford to take the risks
associated with investments in equities

* Irish Life Consensus Fund*
This is a managed fund, investing in the same type of assets as the BIAM Managed Fund.
However, the objective is to match as closely as possible the average return achieved among the
general population of managed funds in the Irish market. To do this, the fund managers track the
average asset mix among all of the other fund managers on a quarterly basis rather than making
their own investment choices. The Consensus Fund is as exposed to market forces as any other
managed fund but should, over time, be able to reflect broadly “middle of the road” returns having
regard to the average managed fund. There are no guarantees attaching to investing in this fund
and unit prices may fall as well as rise.
There are no entry costs on this fund and the only charges associated with investing in this fund
are a 0.20% annual management fee.

* The Investment Manager Irish Life Investment Managers Fund Type Consensus Fund*
Risk Level Medium Risk Option
Goal To provide an investment return in line with the
long term market average for Managed Funds
in Ireland.
What the fund invests in Primarily (60-80%) in company shares. The
remainder of the fund will be invested in a
combination of government bonds, cash and
property. The exact mix of the fund at any time
will be in line with the average Irish managed
fund thus reflecting the collective wisdom of the
Irish managers.
Who should invest Somebody who does not need to use the
portion of their retirement fund in the near
future (5-10 years).
Somebody who is willing to ride out stock
market volatility in an effort to maximise longterm
returns from a managed fund.
Somebody who accepts the volatility associated
with equity based investments and who wishes
to achieve average managed fund returns.
Note: The Consensus Fund will be default fund for new members.

* Investment Charges*
All investment managers charge a fee for managing funds. Some fees may consist of a differential
between the buying and selling cost of units (called the bid/offer charge) and a charge for the
ongoing management of the funds known as the Investment Management Fee. The Trustees of
the myCorp Defined Contribution Pension Fund have negotiated no entry charges and
significantly reduced Annual Investment Charges on the funds.
Full details of the charges applicable to the funds on offer may be obtained at the information
sessions hosted during the year or during the ongoing Pensions Awareness Sessions.
How to decide your investment strategy.
A Conservative Portfolio?
The conservative portfolio aims to preserve the value of the pension fund by having the majority
of its investments in cash and Fixed Interest. Because much of the fund will be invested in cash
and Fixed Interest, the expected returns are lower than those associated with a more aggressive
portfolio. To develop a conservative portfolio you should allocate weight to your investment
heavily in the Cash and Fixed Interest Fund, with the balance in Consensus or Managed Funds.
Some Characteristics of a typical Conservative Portfolio
You will have less than 5 years to retirement
You are uncomfortable with a potential decrease in the value of your investment, even on a
short-term basis.
Wish to preserve the capital value of your fund.

Objective Preservation of Capital
Objective Growth of Capital
Imminent Closeness to Retirement Distance
Imminent Distance
Cash Fixed Interest Consensus Pension Managed Indexed Global Equity Fund All Equity
A Moderate Portfolio?
The moderate portfolio will invest in a combination of the Managed and Consensus Funds.
Investing in the Consensus fund will guarantee you the average investment return of the pension
managed funds in Ireland without exposing you to the performance of any one investment
manager. The balance of your fund can be invested in the Managed fund.
Some Characteristics of a typical Moderate Portfolio
You will have more than 5 years but less than 15 years to retirement
You are comfortable taking some risks with your retirement fund and want a more balanced
approach and wish to spread some of the investment risk.
An Aggressive Portfolio?
This portfolio will be invested largely in company shares-using the Global Indexed Equity Fund or
the All Equity Fund, with the balance of the fund spread across a range of investments using the
Managed Fund and/or Consensus Fund.
Some Characteristics of a typical Aggressive portfolio
You will have more than 15 years to retirement
You will not be depending totally on the proceeds of the DC Plan/AVC Plan for your retirement
income, i.e. you are comfortable with an element of investment risk;
You are comfortable with the wide fluctuations of the stock market returns.

* FURTHER CONDITIONS*
How will my benefits be taxed ?
Pensions, including spouse’s pensions, are taxed in the same way as salary under the PAYE
system and qualify for the same tax reliefs. Cash sums taken instead of pension are currently taxfree,
while lump sums payable on death are tax-free if paid to a spouse, but may be subject to
Inheritance Tax if paid to other beneficiaries. Payment drawn down from an Approved Retirement
Fund is taxed as income under the PAYE system
Can my benefits under the Plan be used to obtain a loan ?
You must neither use your benefits for this purpose nor assign them to a third party. If you
attempt to do so, you may lose your right to benefits.
How is the Plan constituted ?
The Plan is effectively a trust fund which is designed to be treated by the tax authorities as an
“exempt approved scheme” under Chapter I, Part 30 of the Taxes Consolidation Act, 1997. It is
established under irrevocable trust and its assets are quite separate from the Company’s
assets. A copy of the Trust Deed and Rules are available for inspection from the Human
Resources Department.
If there is, at any time, any difference between the provisions of this booklet and the provisions of
the formal documents governing the Plan (the Trust Deed and Rules), the latter documents will
take precedence.
Can the Plan be changed or discontinued ?
Future conditions cannot be foreseen and while the Company has every intention of maintaining
its contributions to the Plan, it must reserve the right to change or discontinue the Plan at any
time. In such an eventuality, your rights to secured retirement benefits up to the date of change
are protected and the value of your Personal Retirement Account will be available to provide
benefits as outlined herein.
The Plan must be operated in accordance with the Family Law and Divorce Acts which may
overrule the allocation of benefits in certain circumstances. Specifically, in the event of judicial
separation or divorce, a court application may be made for a pensions adjustment order relating
to retirement or contingent benefits in respect of a married member. Further information
regarding this matter is available from the Pensions Board.


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