What to do in addition to a DB pension for early retirement?

T

Thomas1

Registered User
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HI Everyone

What’s the best way for a person entitled to a decent (but not huge) DB pension at 65 to make a separate arrangement to retire before 65? I wouldn’t be interested in property and it seems bananas to pay 52% tax and leave the pension tax relief on the table to invest in funds outside of a pension scheme.

AVCs are the obvious one but not much use if they can’t be accessed before the DB scheme. For the purposes of the question, I’m assuming my employer won’t allow access to the DB scheme early even if I left the company.

Cheers
T
 
Thomas1 said:
For the purposes of the question, I’m assuming my employer won’t allow access to the DB scheme early even if I left the company
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That's a fairly fundamental assumption to the whole plan. Have you looked into this piece?
It's change your options completely if you could either take a transfer value, or an actuarial adjustment for early retirement, but obviously the number of years you want to retire early would impact on the value.
 
What do you mean "no" redonion?
Wouldnt a prsa be a viable option for the OP?
 
jim said:
What do you mean "no" redonion?
Wouldnt a prsa be a viable option for the OP?
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The poster is already a member of an occupational pension scheme. Their only option for a PRSA is an AVC PRSA. The AVC PRSA is linked to the main scheme rules. So the AVC cannot be accessed in advance of the main pension benefits, as covered in the last few days in the other thread.
 
Thanks for all your replies.

I like the idea of having certainty of income at 65 from the DB so if I could amass a fund in a separate account (ideally with tax relief) that I could encash early would be ideal. When I have enough then I can pay myself annually a sufficient amount to replace my salary for gap years between retirement and the DB kicking in.

From what people have said, once a person is in an occupational pension scheme, you can’t have a separate scheme with tax relief that you can use when you want once you are over the minimum government retirement age? So normal after tax savings/investments are my only options?

Cheers
T
 
Thomas1 said:
Thanks for all your replies.

I like the idea of having certainty of income at 65 from the DB so if I could amass a fund in a separate account (ideally with tax relief) that I could encash early would be ideal. When I have enough then I can pay myself annually a sufficient amount to replace my salary for gap years between retirement and the DB kicking in.

From what people have said, once a person is in an occupational pension scheme, you can’t have a separate scheme with tax relief that you can use when you want once you are over the minimum government retirement age? So normal after tax savings/investments are my only options?

Cheers
T
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Correct
 
Sarenco said:
Why not retire your DB pension/AVCs early?

It amounts to the same thing.
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True but I am at the mercy of my employer in that scenario. My own personal pension arrangement that I could access when I was ready or when it was large enough would ideally be my plan.
 
Sarenco said:
Why not retire your DB pension/AVCs early?

It amounts to the same thing.
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It is up to the trustees to allow a member to let a member draw down their pension early. There is never any issue for a DC arrangement but lots of DB arrangements don't allow members draw down even a reduced pension from an earlier age. Some then take a transfer value instead, which can cause liquidity issues for the scheme but the member is entitled to it.
 
SBarrett said:
It is up to the trustees to allow a member to let a member draw down their pension early. There is never any issue for a DC arrangement but lots of DB arrangements don't allow members draw down even a reduced pension from an earlier age. Some then take a transfer value instead, which can cause liquidity issues for the scheme but the member is entitled to it.
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I know from speaking with colleagues who took early retirement that the trustees really nailed them on the transfer value or the reduced pension. There was no uniform offer either so I’m loath to get into that type of negotiation when then the time comes. I want to have myself set up and not need to ask for anything outside what it contractually agreed.
 
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