Hi Gordon thanks I was in the pension scheme for 10 years, worked there for 14 and finished in 2008.Hi Hilda2021,
How long were you with that previous employer?
It might be possible to get access to a tax-free lump sum again.
Gordon
Hi Gordan,That’s great Hilda2021.
On that basis, and subject to you paying around €1,200 for what’s called a “Certificate of Benefit Comparison”, you could transfer your pension from the DC scheme to a PRSA.
That would ‘wipe the slate clean’ so to speak in terms of you previously waiving your right to a tax-free lump sum. On that basis, you could withdraw the following;
- €22,500 tax-free (your 25% lump sum)
- €63,500 would go into the AMRF, from which you could withdraw 4%, i.e. €2,540; given that we’re almost in October and these things take a few weeks to get over the line, you could get around €2,500 this side of Christmas and the same again in January. This should be pretty tax-efficient as it sounds like your income is relatively low anyway
- €4,000 into the ARF which you could take out immediately (subject to tax); as above, my sense is that your tax liability should be low enough
Regards,
Gordon
I think so, yes. There are some decent brokers who contribute to this site, for example Steven Barrett. I don’t know them, but I like the cut of their jib.Hi Gordan,
I appreciate your detailed reply it will be of great use to me, I had no idea I could do that, it will make a huge difference to me. Will I need a broker to do all this for me?
Thank you so much for all your advice and help. I will look into it sooner than later, this will make a massive difference especially the COBC which I wasn't aware of at all. Many thanks againI think so, yes. There are some decent brokers who contribute to this site, for example Steven Barrett. I don’t know them, but I like the cut of their jib.
Delighted to help.
PS, if paying the €1,200(ish) upfront is an issue, some actuaries will wait for payment for the Certificate of Benefit Comparison (COBC) until after you get your pension money. I have also seen some actuaries getting paid from the pension pot.
The COBC process is a complete racket but a necessary evil as things stand for anyone looking to move from a scheme that isn’t winding-up to a PRSA.
It’s rumoured to be for the chop in the next Budget/Finance Act. That may or may not happen though, plus the PRSA jiggery-pokery that I’ve set-out above might also get canned in the next Budget, and that’s of more importance to you right now. So personally I’d be inclined to kick-on if I was you.
This is wildly inaccurate and has no technical basis at all.This shows the importance of getting good financial advise. When you take a redundancy payment you irrevocably your rights to tax free cash .By transferring to be a prsa you are entitled to 25% tax free but potentially you are exposing yourself to revenue reviewing the taxation of redundancy payment and clawing back tax relief and imposing penalties . A lot of people will say this is not happening in practice but I personally would not take risk . Interested to hear advise of financial brokers however
Thank you Clubman I had to move from the old company Scheme as it was closing.If you left employment in 2008 why would any 5 year early encashment charge be relevant at all?
Ah brilliant thanks you so much, that's a great relief, thank you.@Hilda2021
The 5%/4%/3%/2%/1% applies if you moved the total fund to another provider in years1/2/3/4/5.
The 5% (etc.) does not apply to drawdown.
Gerard
www.prsa.ie
Thanks Gordon, yes I had read it on another post you had posted on, thats a welcome change too, thanks again.Apologies if it’s already been mentioned, but the AMRF requirement is obviously gone since I posted the guidance earlier in the thread.
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