# Will I cash in Pension



## stuck (9 Sep 2003)

I currently have a personal pension plan on which the annual management charge works out at approxiametly 3% on the fund per year and contribution charges are 5%. 

I have suspended contributions at the moment due to these high charges. If I leave the money where it is I can claim it when I reach 65. However as far as I can see the underlying fund needs to grow by inflation +3% say 8% for me just to stand still, anything worse than this and the fund is reducing in real terms.

I am told that I cannot transfer the current value to a PRSA even within the same provider.

It seems all that is on offer is the surrender value which is €2000 less than the current Value ("surrender value" possibly the only clear term when dealing with pensions)

Should I just cash it in ?


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## ClubMan (9 Sep 2003)

*I am told that I cannot transfer the current value to a PRSA even within the same provider.*

Are you sure about that? I thought that transfers of personal pension plan funds into a PRSA were possibly (or will be under imminent legislation)?

3% p.a. charges seem extremely high. Are you at liberty to say who the intermediary and/or underwriter are?


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## stuck (9 Sep 2003)

*cash pension*

I asked the IFRSA and they told me 

"there is no provision in the legislation that deals
with transferring from a personal pension to a PRSA, so it is up to the institution if they only give the surrender value."

Irish Life, about half the units are what they term intial units at 4.70% and the other half termed premium units which are at 0.65% management charge


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## ClubMan (9 Sep 2003)

*Re: cash pension*

Well, this is what the [broken link removed] says on this matter (an RAC is simply a personal pension plan):

_*Q. How do PRSAs interface with Retirement Annuity Contracts (RACs)?*

RACs will continue to be available for pension provision. Existing RAC policy holders will be permitted, by mutual agreement and subject to specified requirements (to be set out in Regulations), to transfer assets from a retirement annuity contract to a PRSA._


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## stuck (9 Sep 2003)

*cash in*

Irish life tell me they will only transfer the "surrender Value" i.e. it is the same as cashing it in


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## stuck (9 Sep 2003)

*cash-in*

I have emailed the Pensions Board - so we will see what they say


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## Alan Moore (9 Sep 2003)

*Transfers......*

You shouldn't have a problem transferring the "surrender value". However it still may not be the best thing to do.

Best to explain initials unit first. Initial Units (which are becoming less common) are a mechanism of effectively front loading charges. They will have two values

(a) Present Value - Assumes that future charges have not come out yet

(B) Surrender Value - Value net of future charges that the company would have recouped had the policy run to term.

So, if you transfer the insurance company recoups its costs and if you go they also recoup the costs.

I'm not sure what your circumstances are but my advice would be to pay a fee and take advice. Could and probably will save you thousands if you are serious about your pension.

One last point, you seem to mention encashment once or twice. Encashment and transferring are two seperate things. Encashmen ( where you receive the proceeds ) is not allowed until you are of retirement age ( 60 -70 ).


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## Stuck (10 Sep 2003)

*transfer*

Encashment is not allowed, - Are you saying that I cannot stop this pension and tell them to send me the cheque for the surrender value !!


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## Alan Moore (10 Sep 2003)

*Answer: Yep*

If encashment was allowed we'd all be putting as much money as we can into personal pensions getting the tax relief and cashing them in the following day.


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## Stuck (10 Sep 2003)

*Pension*

Can I not take the surrender value subject to tax, it would surely be better than a 3% man charge on the fund every year.


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## rainyday (10 Sep 2003)

*Re: Pension*



> Can I not take the surrender value subject to tax, it would surely be better than a 3% man charge on the fund every year.


No - it is your pension - it is for your retirement.
You may be able to transfer it into a lower-charging pension, but it will still be a pension & you won't get your hands on it until you retire.


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## Stuck (10 Sep 2003)

*Pension*

Balls


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## ClubMan (10 Sep 2003)

*Re: Pension*

*you won't get your hands on it until you retire

Balls*

No - I think _Rainyday_ meant your pension. :lol


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