PRB & DC Pension

S

Slippers

Registered User
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Hi,

I am 38 with a PRB from past employment. I also have a DC pension with my current employer. Both are administrated by Irish Life and I can see both when I log onto the Irish Life pension portal.

I presume I can transfer the PRB into my DC pension if I wished? If so, is that good practice or am I missing an opportunity with having a PRB separate to my DC pension?
 
Last edited:
Slippers said:
Hi,

I am 38 with a PRB from past employment. I also have a DC pension with my current employer. Both are administrated by Irish Life and I can see both when I log onto the Irish Life pension portal.

I presume I can transfer the PRB into my DC pension if I wished? If so, is that good practice or am I missing an opportunity with having a PRB separate to my DC pension?
Click to expand...

You can usually transfer your PRB fund into your DC scheme. The rules of the DC scheme must accept transfers but it's very rare that they wouldn't.

Things to consider: -

  • Make sure the charges on the DC scheme are the same if not lower than the PRB.
  • Make sure that you have the same fund choices. Some DC schemes restrict fund choices.
  • Transferring a PRB fund into a DC scheme also transfers the service from the previous scheme. So, for example, if you leave the DC scheme with less than 2 years' service you can get a refund of your contributions. If you transfer the PRB fund in and the combined service is over 2 years, then you wouldn't qualify for such a refund.
  • Check that there's no charges or penalties for transferring the PRB fund.
  • Check also that the PRB fund doesn't have any loyalty bonuses for staying.
  • Be aware that you have full control of your PRB at present, i.e. you can choose to move it to another PRB provider, you don't need any trustee signature to withdraw funds from it when you retire etc. If you move this fund to a DC scheme, you are putting it under the trusteeship of whoever the DC scheme trustees are. So in the future, the trustees could decide to move the entire scheme away from Irish Life and when you want to retire, you'll need to get the trustee to sign off the retirement papers, even if you have left the employment years previously.
I'd say the biggest consideration is flexibility. At present your PRB and your DC scheme fund are entirely separate. So, for example, you could choose to "retire" your PRB and start drawing benefits from age 50 onwards, even if you are still working and in the DC scheme. Or you might decide to retire from the current employer a year or two early, draw the benefits from the PRB to fund you until you later draw the DC scheme benefits. If you amalgamate the two, you can only retire on a single day.

I wrote a piece about this a while ago [broken link removed].

Regards,

Liam
www.ferga.com
 
LDFerguson said:
You can usually transfer your PRB fund into your DC scheme. The rules of the DC scheme must accept transfers but it's very rare that they wouldn't.

Things to consider: -

  • Make sure the charges on the DC scheme are the same if not lower than the PRB.
  • Make sure that you have the same fund choices. Some DC schemes restrict fund choices.
  • Transferring a PRB fund into a DC scheme also transfers the service from the previous scheme. So, for example, if you leave the DC scheme with less than 2 years' service you can get a refund of your contributions. If you transfer the PRB fund in and the combined service is over 2 years, then you wouldn't qualify for such a refund.
  • Check that there's no charges or penalties for transferring the PRB fund.
  • Check also that the PRB fund doesn't have any loyalty bonuses for staying.
  • Be aware that you have full control of your PRB at present, i.e. you can choose to move it to another PRB provider, you don't need any trustee signature to withdraw funds from it when you retire etc. If you move this fund to a DC scheme, you are putting it under the trusteeship of whoever the DC scheme trustees are. So in the future, the trustees could decide to move the entire scheme away from Irish Life and when you want to retire, you'll need to get the trustee to sign off the retirement papers, even if you have left the employment years previously.
I'd say the biggest consideration is flexibility. At present your PRB and your DC scheme fund are entirely separate. So, for example, you could choose to "retire" your PRB and start drawing benefits from age 50 onwards, even if you are still working and in the DC scheme. Or you might decide to retire from the current employer a year or two early, draw the benefits from the PRB to fund you until you later draw the DC scheme benefits. If you amalgamate the two, you can only retire on a single day.

I wrote a piece about this a while ago [broken link removed].

Regards,

Liam
www.ferga.com
Click to expand...

Great, thanks for that. Very helpful.
 
Great info LD,

Adding:
in a lot of cases, there are applicable PRB early exit penalties, these vary in duration, but up to 5 years, is not that unusual. Its effectively payback, for the extra 1% or more, added to original sum t/f to a PRB, one would have got as a carrot, for signing up to an early exit penalty.
 
fayf said:
Great info LD,

Adding:
in a lot of cases, there are applicable PRB early exit penalties, these vary in duration, but up to 5 years, is not that unusual. Its effectively payback, for the extra 1% or more, added to original sum t/f to a PRB, one would have got as a carrot, for signing up to an early exit penalty.
Click to expand...

Thanks fayf. Yes, that was what I was getting at in the fourth point on my list above.
 
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