# 65k to transfer



## legoland (6 Nov 2009)

I was made redundant last february and the company has since closed down its pension scheme. They have told us to move our money by mid december. Any ideas/suggestions what I can do with this lump sum ?
Also Im on a temp contract in a semi state atm and if I were to be made permanent would it be advisable to buy back years. Im 42 atm...


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## LDFerguson (8 Nov 2009)

If you had more than 15 years service in the scheme, your only option now is to transfer to a Buy Out Bond (a.k.a. Personal Retirement Bond).  This is a lump sum pension product of your choosing - your money is invested in a fund you choose.  When you retire (any time from age 50 onwards), the options are the same as they were in the original scheme.  Unless you were a director of the company, the options are tax-free lump sum and annuity (guaranteed fixed pension for life).  

If you have less than 15 years service in the scheme you can transfer to a Buy Out Bond or a PRSA.  The PRSA offers the ability to make further contributions and an additional option at retirement, i.e. the Approved Retirement Fund or ARF.  

You can choose any provider or fund(s) for your Buy Out Bond or PRSA - the choice of fund will be determined largely by your appetite for risk.  

As with any investment or pension product, be aware of charges, up-front and ongoing.  A transfer into a PRSA should attract no up-front charges and the annual fund management charge should be no more than 1% unless you have a specific requirement for a specialised fund.  If you shop around, you should also be able to purchase a Buy Out Bond with no up-front charges and an ongoing annual fund management charge of around 0.65% - 0.75%.  

I wrote a piece on some of these issues a few months back - see [broken link removed]. 

If your intention is to improve both your pension and lump sum from your Defined Benefit scheme (current employment) at retirement, buying back years is usually the better option as it's guaranteed, although it can be costly and there may be a limit on how many years you'll be allowed to buy back.  

Liam D. Ferguson


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## Starbuck (15 Nov 2009)

Hi Liam,
My partner took VR from her job in March 2007 and is now a full time mom. 
Her employer had a small 'Retirement & Death Benefits Plan' in place for employees. 
We've been clearing out old paperwork recently and I just found out she'd been in this scheme - she had forgotten all about it! We sought a current value for the plan and its worth about 22.5K.
The valuation included options for her to leave it and collect a deferred pension at 65 (tiny, no doubt), or transfer to another employers scheme (unlikely), or buy a PRB/PRSA. 
Elsewhere in the document it states that the PRSA is not in fact an option 'as the approved providors are not accepting such transfers because administrative charges are prohibitive'.
We are considering emigrating, and she would really like to be able to take the money as a cash lump sum to pay off the mortgage on her foreign property (she's from outside the EU).
Is there any way to facilitate this? She worked in the job for 11 years.


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## LDFerguson (15 Nov 2009)

Unless she's at least 50 or in serious ill-health, I'm afraid there's no way to access her pension fund now.


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## Anfear (15 Nov 2009)

Is it not at least 60 before you can access pension fund unless extenuating circumstances (health) or professional sports person, or can a VR person still be granted "early retirement" by ex-employer?


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## LDFerguson (15 Nov 2009)

Early retirement from an Occupational Pension Scheme is permitted from age 50 with the agreement of the trustees.  As it appears to be a DC scheme and she's no longer an employee I can't see any reason why the trustees wouldn't agree.  

Alternatively she can transfer to a Buy Out Bond in which case no trustee approval is needed to take early retirement from 50 onwards.


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## Starbuck (15 Nov 2009)

Liam, how do we calculate the maximum lump sum she'd be entitled to at 50?


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## LDFerguson (16 Nov 2009)

It's a function of how many months she was in the scheme and her salary when she left.  The scheme broker should be able to calculate it for you on request.


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## Starbuck (16 Nov 2009)

Thanks Liam.


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