Leaving Company, less than 2 years service. - Refund of member contributions

[johnfenit]

hello,

I understand you are entitled to get a refund of your personal contribution (but not employer's contribution) back less tax. Are you entitled to the fund growth on your personal contribution?

thanks

john

 

[LDFerguson]

While it's common in practice that schemes do give the value of the employee contributions, that's not an obligation. A refund of just the employee contributions themselves without interest is also permissible. Check the rules of the particular scheme.

 

[cremeegg]

It would be much more beneficial if you were allowed to keep the pension. It is worth asking if this is possible.

 

[fayf]

Just in relation to the 2 years service.
It is 2 years “Pensionable Service“, Not the employment service, which can make a difference, as some employer schemes only allow you to commence paying into the employer scheme after a specified period, which can be up to 6 months, after your start date, or more in some cases.

if you move to another employment, you can bring this pensionable service with you, and by transferring the pension balance into the new employment, it comes with, the attached pensionable service of the previous employment.

eg leave job 1 with 18months pensionable service, transfer the employee pension-amount into pension scheme of job 2, then, after 6 months of pensionable service in job 2, you have a combined pensionable service of 24 months, so at that stage, you could keep the employer contributions of job 2 On leaving job 2, even though you may have left before 2 years

 

[Steveee]

In some cases you can get the employer contibution if you transfer another pension in to that pension. They will count the service from the other pension which will bring you over the 2 years. I did this before and got to keep the full value

 

[fayf]

In some cases you can get the employer contibution if you transfer another pension in to that pension. They will count the service from the other pension which will bring you over the 2 years. I did this before and got to keep the full value

I had the exact same experience, but had to find out this myself, no one will tell you, about transferring pensionable service

 

[fungie]

I've never heard of this and it sounds interesting.

As another example: if I had 2 years pensionable service in job 1, then leave that job and start in job 2 that pays employer contributions from the start. If I transfer pension from job 1 into job 2 pension scheme and I leave job 2 before 2 years, can I keep employer contributions from job 2?

 

[fayf]

I've never heard of this and it sounds interesting.

As another example: if I had 2 years pensionable service in job 1, then leave that job and start in job 2 that pays employer contributions from the start. If I transfer pension from job 1 into job 2 pension scheme and I leave job 2 before 2 years, can I keep employer contributions from job 2?

Yes, you can, so long as that transfer from Job 1, is executed, and, the pensionable service is noted, as part of the transfer,
eg the job 2 pension scheme, receive the record of the pensionable service, when the funds transfer is made.

When i dug into this, the idea, is that the 2 year restriction on keeping employer contributions, should (in theory at least) be limited to 2 years Max, for the working lifetime of an individual.
It is there, to prevent employees who change jobs regularly, (which is not uncommon), from being effectively discriminated from keeping employer contributions, as a result of changing employments regularly, which is common in many types of employment.

The key caveat is, for this to work, people in these situations, should waste no time in transferring their funds to their current employer, and that pensionable service, is recorded correctly.

In my experience, some life& pensions organisations can be quite slow to complete this task, and its exacerbated by the fact that there are two parties, a sender and receiver. In one example i experienced, the transferring party did their job quickly, and the receiving company had the funds for more than a month, before crediting my Pension fund account, even though i had made several phone calls and emails, well in advance of the transfer date and again after it had happened.

 

[fungie]

Yes, you can, so long as that transfer from Job 1, is executed, and, the pensionable service is noted, as part of the transfer,
eg the job 2 pension scheme, receive the record of the pensionable service, when the funds transfer is made.

When i dug into this, the idea, is that the 2 year restriction on keeping employer contributions, should (in theory at least) be limited to 2 years Max, for the working lifetime of an individual.
It is there, to prevent employees who change jobs regularly, (which is not uncommon), from being effectively discriminated from keeping employer contributions, as a result of changing employments regularly, which is common in many types of employment.

The key caveat is, for this to work, people in these situations, should waste no time in transferring their funds to their current employer, and that pensionable service, is recorded correctly.

That's very interesting and not often mentioned. Do you have any links to revenue/government documents which state this?

 

[fayf]

I did find something about it online last year when i was doing a transfer, and i did search for it, to try and get a link, but can’t seem to find it now.