# 13 mo at company; Have paid €1885 into pension; only refunded €555; is this a con?



## Intercourse (23 Oct 2006)

Hi folks,
I have just completed a 13 month stay at a company and paid in 145 euros a month to its pension scheme for each month I was there.

I requested a pension statement from them as I wish to transfer these contributions to my current company pension. They told me I had only 550euros available in contributions to transfer.  I have actually paid in about 1885 euros to their scheme over the 13 months. 

I have been waiting for a reply from them since Friday but thought I'd seek your knowledge here as a precaution.

Where did the rest of the money go? Can anybody elighten me as to what is going on here and what my rights are? 
Thanks!
Intercourse.


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## ClubMan (23 Oct 2006)

*Re: Am I being conned?*

You really need to get more detailed information such as the statement that you have requested in order for people to comment meaningfully.

What pension provider was the money with and what specific fund(s)?


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## ajapale (23 Oct 2006)

*Re: Am I being conned?*

Have you retained your payslips showing the cumulative amount deducted over the 13 month period?


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## boaber (23 Oct 2006)

*Re: Am I being conned?*

Could depend on the type of product that the company scheme is in.  Believe it or not, there are a lot of companies whose pension schemes are still in "initial unit contracts". These are older contracts where the life assurance compnay would bear the brunt of the initial set up charges at the start of the policy and then recoup them over the term of the policy.  If the policy is surrendered before the maturity date, then you may see a relatively low surrender value as the life assurance co would not have recouped all the charges.

Also, check the rules of the scheme to see what they say, especially in the case of a refund of contributions.

I mention this because the rules of some schemes state that the amount that can be refunded to an employee will be the *higher* of contributions paid or the surrender value of these contributions.

I know you were thinking of a transfer, but a member can actually transfer their refund of contributions to a PRSA, without incurring the 20% tax deduction.


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## CCOVICH (23 Oct 2006)

*Re: Am I being conned?*



boaber said:


> I know you were thinking of a transfer, but a member can actually transfer their refund of contributions to a PRSA, without incurring the 20% tax deduction.


 

Really? Is this specific to PRSAs?

I was taxed at 20% when I received a refund from 12 months contributions when I left a previous job (I had been paying tax at 42%).


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## boaber (23 Oct 2006)

*Re: Am I being conned?*

Only available if you transfer your refund to a PRSA

This is a quote from the Revenue's website:

Refunds of contributions from Occupational Pension Schemes are taxed at the standard rate of tax, currently 20%. However, the refund may be transferred to a PRSA without this tax charge.


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## Guest126 (23 Oct 2006)

*Re: Am I being conned?*

There is always no tax on transfers to another pension.


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## CCOVICH (23 Oct 2006)

*Re: Am I being conned?*

Sorry I misread the statement as 'there is no tax if you receive a refund of PRSA contributions'.


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## boaber (23 Oct 2006)

*Re: Am I being conned?*



CapitalCCC said:


> There is always no tax on transfers to another pension.


 
I know.  What I was trying to suggest (poorly) was that the rules of the scheme *may* only allow a transfer of the surrender value whereas if the member elects a refund of contributions, the scheme may allow the higher of contributions paid, or the value of to be refunded.  The person could choose the refund of contributions option, but transfer it to a PRSA, therefore (possibly) gettnig the higher value.


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## Guest126 (23 Oct 2006)

Point taken - however that was quite an old rule that I have only ever seen applying to DB Pension arrangements and this one certainly sounds like a DC arrangement in which case I would be quite sure that the transfer/refund/whatever would be strictly based on the fund value rather than the amount of contributions.


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## Intercourse (23 Oct 2006)

folks,
I have never had any real specific info on the pension scheme itself. I requested this from the contact in the early days but never got anything. I knew from early on that I would be leaving this company ASAP.

I found this blurb on my contract:
Pension Arrangements: Subject to any necessary evidence of health, you will become a member of the Company's Pension Plan and will contribute 5% of your plan salary, meaning your basic salary less a deduction in respect of the State single person's retirement pension. The balance of the cost of the plan will be borne by the Company. Benefits provided by the Plan will be determined by the Coompany but will include retirement pension at age 65 based on Company service, disability pension, spouse's pension and lump sum for death in service.

I have been paying into this scheme since day 1. My payslip shows this too. I'll update with more info if/when I get it. The contact is based in the UK and not very good at communicating. 

UPDATE
I have found a mail that says it' s an Irish Life pension. 
I have requested the coordinator send me a Leaving Service Options Letter.


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## Guest126 (23 Oct 2006)

Sounds like a DB Arrangement so!


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