# Transfer Pension to Executive Pension plan



## PrivateI (9 Oct 2006)

I recently set up an executive pension plan as I set up my own company. Up to the point when I set up the executive plan I had an existing pension which I contributed to for some years. What are the rules for transferring funds in a pension from one pension to another. I have asked a few brokers and they all seem to say different things. Are there any tax rules which prevent the transfer? There was an article in SBP this week which warned about leaving a pension frozen/paid up as over time charges and management fees would eventually erode the value of the pension


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## Guest126 (10 Oct 2006)

Hi there


You can transfer from your old plan IF your old plan was an occupational plan
If your old plan was a PERSONAL PENSION then you can NEVER transfer it to the executive plan (because one is under personal pension legislation and the other - your current one - is under occupational pensions legislation...you can never combine the two different types of pension)
Do you know what type of pension your "existing pension" is (it sounds to me like a personal pension hence you cannot transfer it)?


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## boaber (11 Oct 2006)

CapitalCCC said:


> If your old plan was a PERSONAL PENSION then you can NEVER transfer it to the executive plan


 
Do you think there is a loophole here? The member could transfer from a PERSONAL PENSION to a PRSA. Then they can transfer the PRSA into the EXECUTIVE PLAN? 

What do you think?


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## Guest126 (11 Oct 2006)

Sounds possible, the max transfer from occupational to a PRSA is €10k...does the same limit apply to transfer from PRSA to occupational (such as Executive Pension Plan)?

Also, how easy is it to transfer from Personal Pension to PRSA?


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## boaber (11 Oct 2006)

Not aware of any monetary limits on a transfer from PRSA to occupational.

I also think it's simple enough to transfer from a personal pension to a PRSA.

However, if someone transfers into an exec from a personal VIA a PRSA, they should be aware of any exit and entrance charges that may apply to each policy, so it may not be worth their while?


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## Guest126 (11 Oct 2006)

Would maybe need revenue approval to transfer from PRSA to Executive Pension Plan?


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## PrivateI (12 Oct 2006)

My executive pension provider emailed the following response yesterday: "Unfortunately it isn't possible to transfer a personal pension into an executive pension as the policies are set up under different revenue rules. Although it's true that charges still apply to the policy when it is paid up, some may be reduced. In this case the policy fee has reduced from EUR3.81 per month to EUR2.54 once the policy was made paid up. The only other charge that will apply is the Fund Management charge of 0.75% per annum. In this case the policy statement I sent takes into account policy charges when calculating the projected fund value. If the performance was well below the projected 6% growth charges would reduce the policy value"

If it is possible to transfer from PRSA to an executive plan I will convert my personal pension to a PRSA and then transfer the PRSA to my executive plan. I will revert with details when I get a reply form my pension provider. Thanks for the advice


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## ClubMan (12 Oct 2006)

CapitalCCC said:


> Sounds possible, the max transfer from occupational to a PRSA is €10k.


Just to be pedantic - as far as I know there is no technical limit but there is a practical limit of €10K or thereabouts due to the need for some actuarial report explaining why such a transfer is in the individual's best interests but nobody can do this right now or the cost is prohibitive in most cases. Is that correct?


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## PrivateI (12 Oct 2006)

I got the following reply from my pension provider to my questions:
Is it possible to transfer my personal pension to a PRSA? If so could I then transfer the PRSA to the executive plan? Would revenue approval be needed to carry out any of these conversions?
He replied as follows:
It is possible to transfer a personal pension to a PRSA and then transfer that PRSA to an executive pension. The only pension product that needs individual Revenue approval is an executive pension and is already revenue apporved in this case). In terms of the requirements to set up a PRSA one of our sales reps could advise you as to how best to go about this. I know XXXXXXXX set up your previous policies, if you wish I can forward him this correspondence and ask him to get in touch with you?

So you could say that the loophole mentioned earlier is indeed a valid way to transfer funds in my personal pension to my new executive pension.

Thanks again for all your advice.


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## Guest126 (12 Oct 2006)

Well done Private!

Yes Club the problem is getting that Actuarial Report.


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## DirtyH2O (23 Oct 2006)

I want to make AVC for 2005 PAYE earnings but am in the process of transferring my pension from my ex employer into a new executive pension. The broker felt that I would not be allowed to make contributions to the new executive pension in this way and would need to set up a PRSA as well. I would prefer to only have a single pension so my question is can i make contributions directly and, if not, can I close the PRSA at a later date and transfer the funds to the new pension.


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## ClubMan (23 Oct 2006)

DirtyH2O said:


> IThe broker felt that I would not be allowed to make contributions to the new executiuve pension in this way and would need to set up a PRSA as well.


Why?


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## DirtyH2O (23 Oct 2006)

ClubMan said:


> Why?


 
He thought that Revenue do not allow it as I would be claiming a refund of 2005 PAYE for contributions being made to an executive pension.


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## Guest126 (23 Oct 2006)

That should not be a problem.


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## ClubMan (23 Oct 2006)

Possibly ropey advice from your broker so? Maybe s/he has some vested interest in selling you another pension/_PRSA_?


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## DirtyH2O (23 Oct 2006)

ClubMan said:


> Possibly ropey advice from your broker so? Maybe s/he has some vested interest in selling you another pension/_PRSA_?


 
Thanks for the info.
I'm hoping he was just uncertain about the rules. It's for a Self Directed Eagle Star pension if you have any opinion about that.


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## ClubMan (23 Oct 2006)

DirtyH2O said:


> I'm hoping he was just uncertain about the rules.


No excuse in my opinion if he's doing this for a living and you're paying him!


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## DirtyH2O (23 Oct 2006)

ClubMan said:


> No excuse in my opinion if he's doing this for a living and you're paying him!


 
I'm not paying him, it's a favour to reduce\eliminate the initial contribution charges etc. on transferring a lump sum from my ex employer and his business is predominantly mortgages so I can accept gaps in his knowledge of the rules and regulations so long as he tells me when he is uncertain.
I intended to call Revenue to confirm this later today.


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## ClubMan (23 Oct 2006)

DirtyH2O said:


> I can accept gaps in his knowledge of the rules and regulations so long as he tells me when he is uncertain.


But what if he is certain that he was correct but he is simply wrong?


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## Guest126 (23 Oct 2006)

DirtyH2O said:


> I'm not paying him, it's a favour to reduce\eliminate the initial contribution charges etc. on transferring a lump sum from my ex employer and his business is predominantly mortgages


 
Another broker who does not charge.

I wonder what are those "initial contribution charges"?

God those brokers are soo nice


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## DirtyH2O (23 Oct 2006)

ClubMan said:


> But what if he is certain that he was correct but he is simply wrong?


 
Then I wouldn't be asking the question here  instead I'd be stuck in a mess down the line  . He expressed his opinion but admitted he wasn't certain. I was in a company scheme but am not certain if all company schemes are occupational scheme - I owned the pension from day one, there was no qualifying period before I could take it with me.


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## DirtyH2O (27 Oct 2006)

DirtyH2O said:


> He thought that Revenue do not allow it as I would be claiming a refund of 2005 PAYE for contributions being made to an executive pension.


 

I'm working with a large Insurance and Pension company and I've asked a number of people here about this issue - brokers, actuaries, misc staff and they think I won't be able to make these contributions to my director's pension and will need to open a personal pension as well. I am thoroughly confused now.


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## Guest126 (27 Oct 2006)

This Director's Pension - is it related to an employment in your own company, an employment which involves a salary of €0?

If that is the case (i.e. salary of €0) then that would explain the problem?


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## DirtyH2O (27 Oct 2006)

CapitalCCC said:


> This Director's Pension - is it related to an employment in your own company, an employment which involves a salary of €0?
> 
> If that is the case (i.e. salary of €0) then that would explain the problem?


 
Thanks for the reply.
Yes it's my own company, salary isn't €0 but I'm trying to make an AVC to new director's pension and then reclaim tax I paid last year when I was PAYE worker against these contributions and also I was in that employer's occupational pension scheme at the time (2005) which people think might be a problem.


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## jfitzer (27 Oct 2006)

IMO you can transfer personal pensions into a prsa written under personal rules but the only prsa that can be transfered into an executive pension is a FSAVC PRSA which is written under occupational rules.


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## Guest126 (27 Oct 2006)

If you did not have earnings from your company in 2005, then I do not see how you can out an AVC to THAT plan for 2005, if you have two SEPARATE employments there is absolutely no problem with having two SEPARATE pension schemes.


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## DirtyH2O (27 Oct 2006)

CapitalCCC said:


> If you did not have earnings from your company in 2005, then I do not see how you can out an AVC to THAT plan for 2005, if you have two SEPARATE employments there is absolutely no problem with having two SEPARATE pension schemes.


 
OK that makes sense, I understand what you're saying. But as my old pension is closed for contributions since I left the company, I currently have nowhere to make AVCs to. So I need a third pension (PRSA\Personal) just to make this AVC for 2005?
Or I needed to make AVC before I left the job?


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## Guest126 (27 Oct 2006)

Well you can't do the latter!

Yea PRSA might be the best place...or start making conts from company to the EPP now or even start making AVCs now for 2006?


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## DirtyH2O (27 Oct 2006)

CapitalCCC said:


> Well you can't do the latter!
> 
> Yea PRSA might be the best place...or start making conts from company to the EPP now or even start making AVCs now for 2006?


 
Thanks for the clarification, I think I have the consensus opinion that I must open two pensions alright. I have spare cash so I thought it would make sense to bring myself up to the x% of 2005 salary allowed for my age band as each 1000 put in would only cost me c. 500 after rebate and I like the idea of loading up my pension at an earlier age. Provided I live to spend it of course.

I wanted to push my initial lump into EPP up to avail of enhanced allocation premium banding to the max, I'm about 3000 - 4000 short of the maximum. It's only 0.5% more I suppose but still. 

really appreciate all the info you've provided. Hope business is good and busy as deadline approaches.


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## Guest126 (27 Oct 2006)

Thanks good luck with it...I hope that is a nil commission PRSA (and EPP)


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## DirtyH2O (27 Oct 2006)

CapitalCCC said:


> Thanks good luck with it...I hope that is a nil commission PRSA (and EPP)


 
107.5 alloc rate pre bid\offer apparently. Special offer this month at ES. No commission or flat rate as it's a favour but I'm sure broker's getting something somewhere but nothing I can see. He should get something for his time anyway.
I'm not doing a PRSA as mngt. fee was higher than a regular pension 1% vs 0.75% with less fund choices available.


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## Guest126 (27 Oct 2006)

"He should get something for his time anyway"

If only everyone on AAM was so fair minded!!!


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