Old Company Pension options?

K

kevgaa

Registered User
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Hi,

I moved Jobs a number of years ago and and have an old company pension thats made up of

1). An old DB pension currently at just over 6k P.A and will increase annually as its revalued to a max of 4% per annum
2). A DC pension in the old company scheme

I currently have a pension with my current employer where I am maxing out my contributions.

I have some expenses coming up so I am just looking to see what options I have to fund them..

1). Borrow but I would have to reduce my pension contributions to cover it
2). Look at releasing some funds from my old company pension ( I just turned 50)

for option 2 above I would like to know what options I have. Based on my limited knowledge they are as follows

1). Leave them be. That means they are locked into the old company pension till I'm 65. Pension retruns are only ok but very low fees

2). Move the pensions to a new bond. This will give me the option to access some of the funds up to 25% of bond if I need them in the near future.
The next questions is would you just move the DC pension?
I assume to get a bond i just approach a pension advisor and they will recommend the one paying them the biggest commission ( Sync in me)
Any recommendations of bonds to review
Any drawback to doing this?

3). What would you do with the DB pension, Leave as it is or move it?

thanks in advance.
 
If the DB and DC schemes relate to the same employment, you can't draw down one without drawing down the other simultaneously. The scheme trustees may or may not allow you to take early retirement now. Only way of knowing is to ask them. Ask for your early retirement options in relation to both the DB and DC schemes and also the transfer value of the DB scheme.

It sounds like you could do with professional advice to help you to evaluate if taking the transfer value on the DB scheme would be a good idea, considering the promise of a pension you're giving up. Or if taking a lump sum out of the DB pension would be a good idea, considering the promise of a pension you're giving up. But if you feel that all a pension advisor (like me) will do is to recommend a product that pays us the most commission, then I guess you'll have to do the research and evaluation yourself.
 
Thanks LDFerguson,

I do agree I need professional advise and apologies for the comment on advisors pushing high commission products rather than the right product, it was very generic and I appreciate not everyone does that, just burnt once by that so will do my research going forward before committing..

The truth of the matter was I didn't realise I had a separate DB pension from my old employer. When I left the options received from my old employer pension trustees only mentioned the DC element of my pension and the options were

TransferPayment to new Company’s Plan
Deferred Retirement Benefits
Transfer Payment to Pension Transfer Bond
Transfer Payment to a PRSA

There is no mention of the DB pension at all in the options. They are treated as two separate products on the pension portal..
 
If the DC and DB benefits both accumulated during the same employment, it's odd (and wrong) that the administrator would send you options on one without reference to the other. Is it possible that at some point in the past the DB scheme was wound up, converted into a DC fund and transferred into the DC scheme? Are you sure that you have both now and not just the DC?
 
Thanks, Yeah the DC and DB funds are both from the same employment. My early days were DB and it "closed to future accural" in 2013. Everything after that was DC. Like you I had suspected that the DB had transferred to the DC but it dosent seem to be the case. I logged onto the pension portal and it seems the DB was always reported separately hidden at the end of the yearly statements, it just stated what my annual pension was based on what I had accumulated till 2013. I know get separate statements for the DC and DB pensions.

Wording on DB statement..

"In lieu of the deferred pension above, a Total Transfer Value equal to the cash equivalent of these preserved benefits may be paid on your behalf to another approved pension arrangement. The actual Transfer Value, which is calculated on the advice of the Scheme Actuary, must be calculated at the time you decide to transfer your benefits."
 
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What are the cons to cashing out an old pension early apart from fund size of course?

ones i know is at 61 you need to take 4% of the bond annually, not good if you are still working as you will pay full tax on it.

anything else?

regards
 
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