Disadvantages of a lower NRD?

R

rob oyle

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I am a deferred member of a DC scheme with a former employer. While there, the NRD (normal retirement date) for people moving from the DC to a hybrid DC/DB scheme was raised from 60 to 65 but as I never moved schemes (which the vast majority of employees did), my NRD was retained. I'm now checking my records with the pension administrator and it appears that they have on file a NRD of 65 for me, so I've asked my former employer to correct it.

My question is: are there any disadvantages to having an earlier NRD? I'm more than 20 years from it anyway but can't see any major benefits in having the funds held from me for an extra 5 years.
 
As a deferred member of a DC scheme, it doesn't make a difference.

I have seen a few of employers with DC schemes set the NRA at 60 as a purely cost saving exercise. Very few people can afford to retire at age 60 but with the NRA at 60, they are not obligated to make pension contributions thereafter.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
As a deferred member of a DC scheme, it doesn't make a difference.
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Is it not advantageous Steven to be able to take your fund at 60, rather than waiting to 65 though? Given none of us know where we'll be in the future, access to your financial resources sooner is better?
 
If you are deferred Dc you could access it at 50 if you so wanted. It doesn't make a difference what the NRA is.
 
rob oyle said:
Is it not advantageous Steven to be able to take your fund at 60, rather than waiting to 65 though? Given none of us know where we'll be in the future, access to your financial resources sooner is better?
Click to expand...

As Donnie says, you can access it from 50 if you want. As the employer pays a fixed cost at the beginning, they won't care when you access the fund. It's no skin off their nose.

Where you have an issue is with DB schemes where the true cost to the employer is only known at the end. In that case, it is much more expensive for them to fund for an NRA of 60.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Having an NRA of 65 rather than 60 could give you a lower lump sum asnypu have left service before NRA.
 
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