Combining old pension with new one?

F

feartheclaw

Registered User
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23
Hi all
I have an old executive pension from a previous employer with Standard Life which hasn't been paid into for a few years. It's held in cash currently but I am going to invest it (probably ETFs). I am now self employed (director of limited company) and want to start some kind of personal pension. Is it possible to combine the 2 rather than pay fees on 2 pensions or am I better off starting afresh with a new one? Any advice appreciated.
Thanks
 
You can't transfer an executive pension into a personal pension. But if you are a company director, why don't you start a new company paid scheme and get the company to pay the premiums, saving yourself PRSI and USC on the contributions. You can then transfer the old scheme across?

There may not be any savings on fees as they are usually deducted as a % of the fund.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 

Thanks Steven, think I may do this..
Are there any benefits in starting a brand new Personal Pension and keeping it separate?
 
I don't see any point in having a personal pension when you are a company director. Any contributions through a personal pension plan are liable to PRSI and USC. If you make them through your company, they are not. Income tax relief works out the same.

You can keep the two policies separate if you want different fund choices. Or if your old employer is part paying the annual management fee, it may be cheaper to keep the policy in the old scheme.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Thanks again Steven. My old employer is not paying any management fees. What if my situation was to change and I go back into regular employment which could well happen in a year or 2? Where would that leave me with the newly formed EP?
 
You're working daily rate? From my experience, most people on daily rate don't need all they get paid and have a surplus in their bank accounts (besides mobile phone, there's next to no expense). It makes more sense for the company to pay some of the extra money into a pension, within Revenue limits.

If you go back to employment in a few years, you can transfer the pension fund to the new employer scheme or leave it where it is. Remember, having it in your own name gives you complete control over the fund choice and provider.

It's no problem having a few pension policies, they are not that difficult to manage. If you have an old Standard Life policy with no offset of fees, you can most probably get cheaper now though, so it might be an idea to move.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Thanks Steven. Only getting around to this now - will there be penalties for moving?
 
That very much depends on the contract that the pension is set up on. A lot of contracts pay a commission to the adviser for setting up the policy. To enable the life company to recoup the money they have paid out, they impose penalties in the first 5 years if you transfer to another provider (which is fair enough really). There are some contracts with no such penalties in place. If you don't want a contract with early exit penalties, you should make this clear at the outset (some life companies don't have contracts with no early exits)


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
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