Made redundant (60) - Pension option, Deferred v PRB

M

Madramor

New Member
Messages
7
I'll be 61 this year so haven't decided whether I'll bother working again (in a pensionable job) or retire. That leaves me with 2 options afaik. I have a relatively small pension pot of circa 250k and have been asked to choose what happens next so it's defer or bond I guess. Some pointers would be nice.
  1. What happens to the deferred pension regards investment ?
  2. Does it stay in a low risk scheme or just cash ?
  3. Will I still get 25% tax free anytime if I select the DB or how is it calculated ?
  4. Is the difference between the DB and PRB that it can be invested again (as oppose to 2 above) ?
 
Madramor said:
I have a relatively small pension pot of circa 250k
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What kind of pension?
Madramor said:
  1. What happens to the deferred pension regards investment ?
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Depends on the pension - the booklet or advisors should be able to clarify.
Madramor said:
  1. Does it stay in a low risk scheme or just cash ?
Click to expand...
Ditto.
Madramor said:
  1. Will I still get 25% tax free anytime if I select the DB or how is it calculated ?
Click to expand...
DB = deferred benefit? Normally DB = DEFINED benefit. You need to clarify.
Madramor said:
  1. Is the difference between the DB and PRB that it can be invested again (as oppose to 2 above) ?
Click to expand...
Ditto.
One advantage of a PRB is that it frees you from any dependency on third parties such as scheme trustees. Might not be so much of an issue so close to retirement. It may also offer better/lower charges, better investment options etc.

It's difficult to address all of your questions without more info.
 
if you leave it where it is, it will remain invested in the fund it is currently in.

If you transfer it to a PRB, you choose the fund that it is invested in. You get to pick the provider and the fund.

All other options at retirement are the same regardless. You can get 25% tax free lump sum, invest in an ARF. You can draw down the benefits at any time up to age 70. It doesn't matter what product you are in, they all do the same thing.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Sorry I meant deferred benefit when I used DB. It is an occupational pension - I thought it was clear given the mention of redundancy and my possibly not working again in a pensionable job.
If I leave it with the current plan can I still indicate the level of risk in the fund ? I believe I can but I'll ask them for clarification anyway. Thanks for the answers
 
You should also check what charges apply as, depending on what they are, it may make sense to transfer out to a PRB.
 
If you're transferring out just remember that the PRB could have early exit penalties in the first 4/5 years so that might be an issue if you wanted to mature the pension in the next 4/5 years.


Gerard

www.prsa.ie
 
If you decide not to continue working.

Do you have any income at present ?
If you don't and you defer your pension you will miss out on Income tax credits for the years without income. You could drawdown an amount of pension, income tax free, during these years.
You should sign on for Prsi class A credits.
If you take up employment for 13 weeks in any calender year at age 61, 62, 63, 64 or 65 (if your 65th birthday is over 13 weeks into that year) and have at least 39 A class Prsi contributions in the year of your 63 birthday (credits suffice) you will qualify for the 65s benefit ( 220 euro per week for 52 weeks). You only need to earn 38 euro per week to gain a class A contribution so a few hours per week is all that is needed.
 
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