# Transfer Personal Retirement Bond (PRB) Irish Life to my current pension with Zurich?



## candyman (2 Nov 2013)

Is it possible to transfer a Personal Retirement Bond (PRB for short, in my own name), currently held with Irish Life, to my current pension with Zurich?

I am considering consolidating previous pension pots into my current one with Zurich but am unsure whether a PRB is transferable? 

Many thanks.


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## ajapale (2 Nov 2013)

Title expanded.

aj


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## candyman (2 Nov 2013)

thanks aj.


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## LDFerguson (2 Nov 2013)

What type of pension contract is your Zurich Life one?  


Personal Pension?
PRSA?
Buy-Out Bond?
Occupational Pension Scheme aka Company Scheme?
You can't transfer from a Buy-Out Bond into the first two. You can, into the second two.  

There's also the question of whether or not you should.  See this post.


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## candyman (2 Nov 2013)

My Zurich pension is a company scheme so it looks like I can move my PRB (aka Buy-Out Bond) into this Zurich one.

Some good points in the "whether you should or not" thread also.

Thanks Liam.


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## LDFerguson (2 Nov 2013)

candyman said:


> My Zurich pension is a company scheme so it looks like I can move my PRB (aka Buy-Out Bond) into this Zurich one.



Yes you can. If your PRB is less than 5 years old, there might be early exit penalties.


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## candyman (4 Nov 2013)

Secondary question: Is it possible to transfer the value of one PRB into another one?

Situation is when you have one large value (~100k) PRB and a number of other (<10k) smaller value PRBs.


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## LDFerguson (4 Nov 2013)

It's possible to transfer from one PRB to another if, for example, you feel that the range of investment choices on the the new PRB is better, you want to buy a property or shares and your original PRB doesn't have self-directed functionality or that the charges on the second are lower.

However, if two PRBs arose from two different employments, they must remain in two distinct PRBs.  You can't amalganate two PRBs into one if they derived from two different employments.


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## candyman (4 Nov 2013)

LDFerguson said:


> However, if two PRBs arose from two different employments, they must remain in two distinct PRBs.  You can't amalganate two PRBs into one if they derived from two different employments.



Even though the PRBs are in your own name now Liam?

All of my PRBs stemmed from previous employments.


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## LDFerguson (4 Nov 2013)

candyman said:


> Even though the PRBs are in your own name now Liam?


 
I'm afraid so, yes.  We've done exercises for clients in the past where we have tidied up pensions from previous employments into PRBs with the same pension company, all in the same investment.  This can help to manage the investment side, but unfortunately Revenue does insist that they must be documented as individual PRBs.


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## ClearFinance (7 Nov 2013)

Be careful also if you transfer to the occupational scheme as when you can draw your benefits will vary on the prb vs the normal retirement age on the company scheme I.e all benefits under the scheme will have to be drawn at the same time..you will be given a new policy number with Zurich regardless so if you wanted to move it to keep in the one life office you could always do a prb with them as an option. In this instance you could access the seperate prb cash from age 50 and it would not be tied up in the scheme... not saying its a bad thing but something to consider

Regards
Clearfinance


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## Fisherman (5 Mar 2014)

*PRB & ARFs*

Liam,  I want to transfer my 3 PRBs to my current employers DC scheme to avail of the ARF option on retirement in 2 yrs time.  As they stand the PRBs don't qualify for ARF under current revenue rules. However, Revenue have told me in writing that I can transfer  the PRBs to my current employers scheme and avail of the ARF.  However, I'm worried that I might be screwed with transfer charges......... I suppose the only way to find out is to ask the question


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## LDFerguson (5 Mar 2014)

Fisherman said:


> Liam, I want to transfer my 3 PRBs to my current employers DC scheme to avail of the ARF option on retirement in 2 yrs time. As they stand the PRBs don't qualify for ARF under current revenue rules. However, Revenue have told me in writing that I can transfer the PRBs to my current employers scheme and avail of the ARF. However, I'm worried that I might be screwed with transfer charges......... I suppose the only way to find out is to ask the question


 
Typically, transfer charges would only apply to PRBs if they are less than 5 years old.  Are yours?  If they're 3 or 4 years old you could possibly avoid transfer charges by waiting to transfer them until they're out of the 5 year period.  

Some funds e.g. With-Profit funds and some property funds have penalties for exiting early.  If your PRBs invest in such a fund you might be hit.  

Some PRBs don't have transfer charges.  A quick phonecall to the PRB companies to ask them what the nominal value and what the transfer value is will clear that up for you.  

Check also that you won't be charged by the DC scheme for accepting a transfer.  

One final check before you sign the paperwork is what the estimated tax-free lump sums from each of the PRBs are, at retirement.  The PRB providers should be able to calculate that for you.  It might turn out that the tax-free lump sum available from one or more of the PRBs could be greater than the fund value, in which case you could withdraw the lot tax-free at retirement.  That would be better than an ARF.  

Remember that by transferring the PRBs into your current DC scheme and availing of the ARF options when you retire, you're giving up your entitlement to a tax-free lump sum from each of the PRBs.  This may or may not sway you, depending on the figures involved.


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## Fisherman (5 Mar 2014)

*PRBs & ARFs*

Thanks a miln for that Liam . The PRB are over 5 yrs old. It's the transfer in charges  I'm worried about.  But will ck the Tax free values first as you suggest. thanks again.


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## Steven Barrett (6 Mar 2014)

Are you in a one man executive pension contract or part of a large Occupational Pension Scheme? The charging structures tend to be different under both. 

As you only have 2 years to retirement, you aren't an attractive client to a life company, so the contract terms won't be as good for say a 40 year old. 

You want to make sure you have 100% of the transfer money invested with zero early exit penalties so you can draw down your benefits in 2 years without any deductions. 

I'm not sure what kind of remuneration your advisor will get, it would depend on a lot of things. Any advisor worth his salt will tell you anyway. If he doesn't ask him.

Steven
www.bluewaterfp.ie


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## Fisherman (6 Mar 2014)

..........Just when I thought things were looking up !    Anyway, thanks for the good points Steven.
 I just can't fathom what Revenue have against older PRBs being available for ARF. 
 My PRBs originate from schemes in companies who no longer exist... people who retired from those companies at closure didn't have the ARF option as it wasn't available, but they retired with annuities at 8%+ and indexed linked...  plus the value of my PRBs have shrunk in recent years.... one of them is down 50% since 2007  .....
 infuriating..  my current scheme is company DC  (not director)


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## Steven Barrett (7 Mar 2014)

It's an argument plenty in the industry are having with the Revenue, with Standard Life leading the charge. 

There should be no reason why the scheme broker can't negotiate that you have 100% of your money transferred into the scheme on your behalf, with no early exit penalties. You may have to pay him a fee for the work done but if you get the ARF option out of it, wouldn't it be worth it?

Steven
www.bluewaterfp.ie


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## Fisherman (7 Mar 2014)

Folks, Have a look at the following. the final para is interesting... ie Dept finance seem to be open to considering a change.

 "*DÁIL QUESTION* addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Simon Harris

*REPLY.*
By way of background, Approved Retirement Funds (ARFs) were introduced by Finance Act 1999 to provide control, flexibility and choice to holders of personal pensions and to proprietary director members of occupational pension schemes in relation to the drawing down of benefits from their pension plans. Prior to that Act, any person taking a pension from a Defined Contribution (DC) scheme or a Retirement Annuity Contract had no choice but to purchase an annuity with their remaining pension pot after drawing down the permissible tax-free retirement lump sum. The ARF arrangement extended the options at retirement so that, in addition to the annuity option, the balance of a pension fund could be taken in cash (subject to tax, as appropriate) or be invested in an ARF, subject to certain conditions. 

The ARF option was extended, in Finance Act 2000, to the part of an employees occupational pension fund built up from Additional Voluntary Contributions (AVCs) and most recently, in Finance Act 2011, it was further extended to cover an employees entire pension fund where the fund is a defined contribution (DC) occupational pension scheme. The 2011 extension which applied with effect from 6 February 2011 (the date of passing of the Act), was in respect of DC schemes approved by the Revenue Commissioners, on or after that date, under Chapter 1 of Part 30 of the Taxes Consolidation Act 1997. Where DC occupational pension schemes had been approved by Revenue prior to that date, the legislation (section 19(7)(f) of Finance Act 2011) provided that the extension of the ARF option in such cases was conditional on the scheme rules being amended to allow a scheme member exercise the option. The 2011 Finance Act, did not, however, extend the ARF option to the main scheme benefits of defined benefit (DB) occupational schemes. 

I am advised by the Revenue Commissioners, that pension retirement bonds, otherwise known as Buy-out-Bonds (BoBs), are single premium insurance policies effected by the trustees of an occupational pension scheme on behalf of a scheme member, as an alternative to providing a preserved retirement benefit under the scheme for that member. They are used in circumstances where a scheme member is leaving service and opts for a transfer value, on the wind-up of a scheme or where pension splitting arises in the context of a Pension Adjustment Order. BoBs are approved by the Commissioners on a generic, rather than individual, basis in the form of a standard bond policy document, under Chapter 1 of Part 30 of the TCA 1997 as DC products. However, in the view of the Commissioners, BoBs are not occupational pension savings vehicles in the normally accepted sense   for example, an individual with a BoB cannot make contributions to the BoB. Rather, they are a specialist pension vehicle to deal with the specific situations described above. 

I am further advised by the Commissioners that it has always been a condition of approval of generic BoB policies that the benefits to be provided to an individual under such policies be subject to the same restrictions and conditions that applied to the occupational pension scheme from which the transfer to the BoB originated. This includes access to the ARF option. The entitlement to the ARF option, in effect, travels with the transfer value paid into the bond and the fact that the BoB is considered a DC pension product does not, of itself, give entitlement to the ARF option from the BoB as of right. Thus, prior to the Finance Act 2011 changes, the ARF option only applied to benefits under a BoB where the bond holder could have availed of the option under the originating occupational pension scheme, e.g. that the bond holder was a proprietary director before leaving service or that part of the originating transfer represented AVCs. There was no alteration in this position following the Finance Act 2011 changes. 

Thus, transfers to BoBs from DB schemes generally, do not have access to the ARF option and transfers from DC schemes that took place either prior to the change in the law in Finance Act 2011 or prior to the required change in the DC scheme rules to permit the ARF option, do not qualify for the option.

In this regard, the question of ARF access from BoBs was specifically considered, in the context of the National Pensions Framework published by the previous Government, by the Implementation Steering Group tasked with progressing the Framework s proposals in relation to flexible options in retirement. In recommending the extension of the ARF option to DC main scheme benefits, the Implementation Steering Group endorsed the then existing position in relation to BoBs i.e. of linking ARF access to the underlying occupational pension scheme from which the transfer value came. In the context of BoBs originating from DB schemes in particular, endorsement of this restrictive stance reflected broader policy concerns about the possible impact that accessing the ARF option by the  back door  through BoBs might have on DB schemes generally.

Notwithstanding the foregoing, the issue of permitting BoB access to the ARF option continues to be raised with my Department and the Revenue Commissioners by representative bodies in the pensions sector. Following a recent meeting in that regard with Insurance Ireland, officials of my Department and the Revenue Commissioners have, without prejudice, undertaken to examine the issue further in conjunction with the Department of Social Protection and the Pensions Board who also have an interest in the broad policy in this area. I will consider any recommendations that may arise from that examination."


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