Retirement Benefits from Personal Pension & Occupational Pension

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boaber

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Hi There

Do you know if you take into account the benefits available under a personal pension when calculating the revenue maximum benefits under an occupational DC scheme?

For Example, if a member's max tax free cash is say €30,000 under the occupational pension scheme and he used the balance to purchase an annuity; and he has a personal pension with a maturity value of €150,000, can he take 25% of this as tax free cash also?

i.e. can he take the maximum from his occupational pension scheme (€30,000) and the max from his personal pension (€37,500)

Many thanks
 
150% of final salary is the max (you cannot also take tax free money from personal pensions, prsas etc).
 
I have received some clarification on this:

If the lump sum is calculated on the strict n/80ths rule, rather than the uplifted scale, then the member can in fact claim the max 25% tax free cash under the paid up personal pension.

The annuity under the occupational pension must also then be calculated uninf the strict 60ths rule.
 
It depends on the size of N.

For example if N = 40, then there would be no tax-free cash allowed from personal pension - it is not possible to get more than 1.5 * Final Remuneration as tax-free lump sum.
 
I know, but 150% only come into play if you are using the uplifted scale.

Using the strict 80ths rule, then a member with 40 years would only get a max lump sum of 50% (40/80ths). By using this method the member would also be entitled to take the max 25% from his personal pension.

You're right, if the uplifted scale was used, and he received 150% of salary as a lump sum, then he would not be entitled to a lump sum from the personal pension.
 
It is 3*Service - so 3 * 40 = 120 / 80 = 150%

That is the normal scale - NOT UPLIFTED.
 
Apologies, forgot about the 3*N part.

Don't think it matters though, the following is from the glossary of terms on the IAPF website, which is taken from the publication 'Understanding Pensions - The Friendly Guide to Pensions' by Paul Kenny, the Pensions Ombudsman.

Strict 60ths/80ths
Benefit scales of 1/60 and 3/80 of final remuneration per year of service for pension and cash respectively. Can usually be provided under Revenue rules without reference to retained benefits.
 
I'm not disputing the fact that 150% of salary is the max you can take from a company pension plan.

What I'm saying is that, if you are using the strict 1/60ths or 3*N/80ths rule, then preserved benefits can be ignored, therefore the member can take 25% of the value of his paid up personal pension
 
And what I am saying is that if N=40, then (s)he cant!
 
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