Preservation of benefits PRSA transfer to Occupational Pension

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APoster

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Hi,

I had a PRSA for 5 years with contributions from both myself and my employer. I moved to a company with an occupational pension and did a transfer in of my PRSA to the occupational scheme. I left that employment before 2 years and the scheme has now clawed back the employer contributions. I was under the impression that as I transferred in, my previous contributions to the PRSA would count towards the 2 years. The pension provider says not so with a PRSA, is that the case? At no point was this outlined to me when I did the transfer.

Thanks
 
APoster said:
I was under the impression that as I transferred in, my previous contributions to the PRSA would count towards the 2 years. The pension provider says not so with a PRSA, is that the case? At no point was this outlined to me when I did the transfer.
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What does the documentation (your schemes rules) say regarding transfers in?
 
It's not specific, it just says that if I transferred benefits in from a previous employment to this plan then it would be taken into account, however, they're now saying that a PRSA is not a pension so it doesn't qualify. The other thing that complicates this is I did have a pension many years ago that would definitely qualify but I transferred that in to the PRSA when I moved to an employer that only provided a PRSA.
 
I was in the same boat as you. Joined company and it's occupational DC pension scheme. Transferred PRSA from previous employer into the pension scheme. I had 15 months' worth of contributions in that PRSA. Left the new company after 15 months. The pension provider also told me that I wasn't entitled to keep the employer's contributions as PRSA contributions didn't count towards the total.

As I understand it, It's nothing to do with the rules of the company scheme. It's the law as to your options (and your employers options to recoup their contributions) when you leave an employment. If less than 2 years service, employer can recoup their contributions. And you can recoup your contributions. AFAIK, you have to pay 20% tax on the contributions that you get back. But since you may have got 40% tax relief, you could make a profit on it. Not sure about how they treat the PRSA contributions though. It doesn't count towards the two years. But at the same time, I don't think they'd let you take the money back.
 
I think the issue here is that a PRSA is not an occupational pension scheme, regardless of whether or not your employer had contributed to it.

Vesting and the preservation of benefits is covered by the Pensions Act. To become entitled to the ER contributions you would need to have 2 year’s qualifying service in the occupational scheme.
It is correct that any other scheme service that is transferred in counts toward this 2 years however a PRSA is not an occupational scheme and no service records are recorded for PRSAs (similar to the salary & service records for occupational schemes for the calculation of retirement benefits).
 
Persius said:
As I understand it, It's nothing to do with the rules of the company scheme. It's the law as to your options (and your employers options to recoup their contributions) when you leave an employment. If less than 2 years service, employer can recoup their contributions.
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Hi Persius,

Just a small correction. The law is the minimum requirement. It could be, admittedly rarely, that an OPS gives its members entitlements to the employer's contributions upon leaving service with less than 2 years. Such entitlements would be recorded in the rules of the scheme.
 
Smoneen said:
I think the issue here is that a PRSA is not an occupational pension scheme, regardless of whether or not your employer had contributed to it.

Vesting and the preservation of benefits is covered by the Pensions Act. To become entitled to the ER contributions you would need to have 2 year’s qualifying service in the occupational scheme.
It is correct that any other scheme service that is transferred in counts toward this 2 years however a PRSA is not an occupational scheme and no service records are recorded for PRSAs (similar to the salary & service records for occupational schemes for the calculation of retirement benefits).
Click to expand...
This is the answer. You didn't transfer qualifying service.
 
Ok thanks for the responses. Does this allow me to take back my employee contributions @20% tax as mentioned by Persius above? What about any gains?

For what it's worth, they gave me leaving service documentation with the employer contribution included, when I say "now" I mean that I'm exercising one of the options to transfer to a different provider and I presume someone spotted an issue, it's been more than a year since I left employment there.
 
I had the same issue. The leaving service options letter was incorrect, and when I transferred to my new occupational scheme I spotted that the employer's contributions were missing. If you haven't yet transferred, ask for an updated leaving service letter. It should give you your correct options based on less than 2 years contributions..
 
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