Advice needed re combining pensions

[thedaddyman]

In the midst of a pension review at the moment as I have 3 company pension pots and also worked in the UK for a number of years. I have maximised everything on the UK state pension front, paid my backdated payments to buy additional years so this thread focuses on the company pensions

I previously worked for a couple of years with a company that is currently exiting Ireland and as part of that process, they are buying out their staff/ex staffs defined DC pensions and providing an uplift as an incentive for people to agree to the buy out. In my case, I had approx. €50k in their pension scheme and they added €15k to that pot and it is now in an Irish Life Personal Retirement bond. The documentation states that I can transfer that bond to another pension plan in due course.

I also have a UK company pension pot worth approx €80k and which I can take at 63

My current Irish employer's pension pot is currently €207k so combined, all 3 are currently worth in and around €350k

My questions are this

• Are there any tax benefits or issues in regards transferring my Irish life bond into my company pension or anything I need to be aware of?
• Secondly, were I to do the same with my UK company pension, is there anything there from a tax perspective etc that I need to watch out for?

I can see the benefits on the "don't put all your eggs in one basket" rule around not combining but from an admin perspective, it is easier to have just the one.

Am I also correct in saying that the 25% taxfree lump sum rule would only apply to one of my pots when the time comes, so combining the 3 together has a logic from that perspective?

 

[ClubMan]

Bear in mind that having your pension "fragmented" can be beneficial from the point of view of giving additional flexibility with regard to allowing staged/staggered retirement of pension pots rather than it being a once off/all or nothing decision.

I would be more inclined to keep things separate, under your own control (e.g. buy out bond rather than leaving money in an occupational scheme where you might have to chase trustees down the road), with competitive charges and invested in appropriate assets which should almost certainly be mainly or solely equities if you have some time to go to retirement or even if you are closer to retirement but are likely to have a good life expectancy into retirement.

The 25% tax free lump sum (subject to the usual €200k limit at the moment) applies to your total pension cover and not just one account so you are not at any disadvantage on that front by having "fragmented" pension cover. The pension providers will calculate things on this front as needed at the time of retirement.

My own pension is fragmented into about half a dozen separate accounts for various reasons, including explicit choice, in order to allow flexibility with staged/staggered retirement.

 

[Fortune]

As it stands, you can access your PRB from age 50 and the UK pension from age 55. If you transfer them into your current pension, you can only take benefits when you've left that employment and are over 50 (or at the retirement age for that employment).

There are further restrictions on UK pensions moved to Ireland that would then apply to your other pensions of they were combined. I suspect some Irish pension providers won't allow UK pension transfers to be combined with other pension for that reason.

 

[AJAM]

The benefit of having multiple pots is flexibility on timing as Clubman pointed out.
But in my opinion, the primary driver for this decision should be fees.
A difference of 0.7% over 20 years will cost you 15,845 Euro, per 100,000. So whatever benefits you get from the flexibility of having multiple pots would need to be worth more than cost to you due to fee difference, to make sense.