Can I transfer from an occupational pension into an investment fund.

My previous employers pension fund wound up about 6 months ago. I had hoped to buy a residential property via a self invested pension fund which I was told required revenue approval. However after almost six months the service provider has advised me that this has still not been approved and I have run out of patience.

I have seen some products where for example Merrion Capital and ORegan Financial (see below) put together syndicates to buy property in the UK / Germany etc buy office blocks or retail buildings. I would like to transfer €100k from the wound up fund into one of these syndicates.

My questions are a) would this require reveneue approval b) has anyone used either of these type of products. The attraction for me (I know others have reservations) is around the gearing perspective?

[broken link removed]

Any advice appreiciated.


Roy

Check out the existing threads on SSAPs (Small Self Administered Pensions) and BOBs (Buy Out Bonds) in case they are of use to you.

Thanks Clubman for the response,

On further investigation it looks like my options as as follows:
a) transfer to current employers fund - don't really want to do that though
b) take out a PRSA
c) take out a Buy out Bond

- Is there a cost for doing a) or b) and if so any ball park ideas (for say €100k
- After doing that can I then invest the proceeds in a geared syndicate?

Roy

There may be restrictions on transferring an occupational fund to a PRSA. Unless it's under a certain amount (a few grand I think) you need some sort of actuarial statement explaining why the transfer is in your best interests and it's difficult/expensive to get these. So (b) may not actually be an option in practice at least in terms of transferring the old occupational fund. There should not be any charges for transferring and some providers may even give you a more than 100% allocation rate. You need to shop around for the best deal suitable to your specific needs. Why do you not want to transfer into your current employer's scheme? If the charges are reasonable and the fund selection suits your needs then why not?

Thanks Clubman - sum involved is c.100k

ClubMan said:

... it's difficult/expensive to get these. So (b) may not actually be an option in practice at least in terms of transferring the old occupational fund.

Click to expand...

So maybe the buy out Bond is my only option?

ClubMan said:

Why do you not want to transfer into your current employer's scheme? If the charges are reasonable and the fund selection suits your needs then why not?

Click to expand...

Put simply - Maxwell ghost lives on, and there have been some other examples with large MNC companies changing their pension stuctures over more recent times. Also I would be somewhat risk oriented and like the idea of gearing.

If anyone else has done something similar I'd be keen to hear of their experiences.

Roy

onekeano said:

Thanks Clubman - sum involved is c.100k

So maybe the buy out Bond is my only option?

Click to expand...

I have a feeling that in practice a BOB or transfer into your employer's scheme are the only practical option. I am open to correction on this but believe that the sort of actuarial statement that I'm talking about above is required when transferring an occupational fund over a few grant (possibly c. €10K) into a PRSA and these are so expensive as to make it not worth it in most cases. Check out the Pensions Board website for more on this.

Put simply - Maxwell ghost lives on, and there have been some other examples with large MNC companies changing their pension stuctures over more recent times. Also I would be somewhat risk oriented and like the idea of gearing.

Click to expand...

Perhaps this fear is not grounded in reality? My understanding is that occupational pension funds are safely ring fenced such that the member's can never be ripped off.

If anyone else has done something similar I'd be keen to hear of their experiences.

Click to expand...

I recently transferred a paid up occupational fund to a BOB because (a) the company in question is most likely going to be wound up soon and the pension scheme with it thus forcing members to transfer to another scheme or a BOB (or a PRSA if applicable) and (b) I preferred to have a standalone pension policy that I own outright rather than having to chase trustees etc. in a few decades time. Transferring into my PRSA was not a practical option as far as I recall for the reasons previously outlined. I also have several other pension funds from over the years - including a PRSA which is active at the moment and accepting contributions personal, AVC and employer contributions - that I did not or could not consolidate into one place.

As ever - if in doubt get independent, professional advice. With a fund of c. €100K all the more reason to do this.

Thanks again Clubman - can I just ask if there were significant costs associated with your recent transfer to the BoB?

Roy

No - in fact I "made" money on it by getting a greater than 100% allocation rate which more than covered the charges applicable. In addition the only ongoing charge after than is the c. 1% annual management charge. Shop around especially with discount brokers (if you don't need advice - if you do then talk to an authorised advisor or multi-agency intermediary) to see what sort of offers they can do for you. My situation may have been unusual in that some of the broker's fees were waived as a quid pro quo barter for other work that I had donated in the past. However I believe that it should be common enough to get a deal which at least leaves your total fund intact and does not eat into it in terms of entry charges. Of course it is presumably also possible to pay a chunk of your fund in charges so shop around and only pay the charges that you deem reasonable.

Many thanks - much appreciated.

Roy