# Retirement Benefits from Personal Pension & Occupational Pension



## boaber (2 Oct 2006)

Hi There

Do you know if you take into account the benefits available under a personal pension when calculating the revenue maximum benefits under an occupational DC scheme?

For Example, if a member's max tax free cash is say €30,000 under the occupational pension scheme and he used the balance to purchase an annuity; and he has a personal pension with a maturity value of €150,000, can he take 25% of this as tax free cash also?

i.e. can he take the maximum from his occupational pension scheme (€30,000) *and* the max from his personal pension (€37,500)

Many thanks


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## Guest126 (2 Oct 2006)

150% of final salary is the max (you cannot also take tax free money from personal pensions, prsas etc).


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## boaber (2 Oct 2006)

I have received some clarification on this:

If the lump sum is calculated on the strict n/80ths rule, rather than the uplifted scale, then the member can in fact claim the max 25% tax free cash under the paid up personal pension.

The annuity under the occupational pension must also then be calculated uninf the strict 60ths rule.


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## Guest126 (2 Oct 2006)

It depends on the size of N.

For example if N = 40, then there would be no tax-free cash allowed from personal pension - it is not possible to get more than 1.5 * Final Remuneration as tax-free lump sum.


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## boaber (2 Oct 2006)

I know, but 150% only come into play if you are using the uplifted scale.

Using the strict 80ths rule, then a member with 40 years would only get a max lump sum of 50% (40/80ths).  By using this method the member would also be entitled to take the max 25% from his personal pension.

You're right, if the uplifted scale was used, and he received 150% of salary as a lump sum, then he would not be entitled to a lump sum from the personal pension.


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## Guest126 (2 Oct 2006)

It is 3*Service - so 3 * 40 = 120 / 80 = 150%

That is the normal scale - NOT UPLIFTED.


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## boaber (3 Oct 2006)

Apologies, forgot about the 3*N part.

Don't think it matters though, the following is from the glossary of terms on the IAPF website, which is taken from the publication 'Understanding Pensions - The Friendly Guide to Pensions' by Paul Kenny, the Pensions Ombudsman.

*Strict 60ths/80ths*
Benefit scales of 1/60 and 3/80 of final remuneration per year of service for pension and cash respectively. Can usually be provided under Revenue rules without reference to retained benefits.


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## Guest126 (3 Oct 2006)

But you cannot take more than 150%...EVER!


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## boaber (3 Oct 2006)

I'm not disputing the fact that 150% of salary is the max you can take from a company pension plan.

What I'm saying is that, if you are using the *strict* 1/60ths or 3*N/80ths rule, then preserved benefits can be ignored, therefore the member can take 25% of the value of his paid up personal pension


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## Guest126 (3 Oct 2006)

And what I am saying is that if N=40, then (s)he cant!


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