# Pension Factors for Redundancy Lump Sum Payment



## CD16575 (15 Aug 2008)

I will shortly be made redundant. I have 11 years service with the company. I have been contributing to the company pension for the past 7 years. I will be using the Standard Capital Superannuation Benefit method for calculating the taxable amount. I have been told that my pension lump sum present day value is 7100 euro. Should I use the full 10000 allowance and give up my pension lump sum. I am 37 years old.


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## ClubMan (15 Aug 2008)

Moved from .


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## Don_08 (15 Aug 2008)

It depends on your figures really.  I think you actually mean the Increased Exemption as you refer to 10000 not the SCSB.

If you take the full increased exemption without deducting the 7,100 how much tax will you end up paying compared to the figure when it is deducted?

And how much you need the extra cash now?

By waiving your right to take your tax free sum at retirement ( and effectively taking it now) - you are only waiving the option to take a tax free cash.  So you are not losing any value.  Eg   At retirement you would have had choice of pension of €5,000 p.a.  or tax free cash of €7,500 and pension of €4,300 p.a..   These are the same value, but if you waive your right, you will only have option 1.

You are only 37, and you will still have the right to take the tax free cash from any pension you build up in the future.


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