Transfer value from a defined benefit scheme
Are you a member of a defined benefit scheme and have the option to take a transfer value?
Option 1 Leave the preserved pension in the DB scheme.
Option 2 Take a transfer value.
What next? Before you make any decision the key items of information include:
What will be your secure sources of income in retirement (State Pension, Property, Investments, Dividends, etc)
What are your current deferred entitlement?
Is the current transfer value being offered less than the 100% Minimum Funding Standard (MFS)?
Is the transfer value an enhanced transfer value - there will normally be a time limit.
Copy of latest actuarial valuation report. Is scheme failing to meet funding standard?
What is the likelihood of a Section 50 reduction in benefits? The trustees could reduce the pension in payment via a Section 50 order.
Is there a plan to ultimately wind up the scheme. Some interesting metrics include how many people are employed in the organisation ? how many in payment? deferred? current active members?
Consider options in the event of untimely death or serious illness
Reasons NOT to take transfer value.
Belief that the pension promise from your employer will be honoured.
Transfer value being offered will not generate income required OR that available from your DB scheme
Potential for a higher transfer value if remain - some actuaries estimate that transfer value should increase 5-6% per annum. This is NOT guaranteed and value may fall.
Reasons to take the transfer value.
Belief that if you remain in the scheme you will not get the pension promised.
Solvency position of the scheme may deteriorate
Fear that bond yields will increase, this would have impact of reducing the transfer value offered (all things being equal)
An enhanced transfer value may not be offered again
Access to Approved Retirement Fund options
Early access to benefits, from age 50 onwards.
Investment choice and option to buy property.
Want to know more? We are available to discuss your options, and we look forward to hearing from you.
Our job is to help you choose a product and structure that will help you meet your goals.
telephone | 091441188 and/or email | office@nelsonlife.ie
RETIREMENT & PENSIONS | INVESTMENTS | FINANCIAL PLANNING | LIFE INSURANCE
Nelson Life Limited trading as Nelson Life is regulated by the Central Bank of Ireland.
WARNING: Past performance is not a reliable guide to future performance. WARNING: The value of your investment may go down as well as up. WARNING: You may lose some or all of the money you invest. WARNING: These funds may be affected by changes in currency exchange rates. WARNING: If you invest into this product you will have access until you retire (Pension Products). WARNING: The above content does not constitute investment advice, as it does not take into account the investment objectives, knowledge and experience of financial situation of any particular person. Prospective investors are advised to make their own assessment of the information contained herein and to obtain professional advice suitable to their own individual circumstances. WARNING: The information contained in this document is based on our understanding of current tax legislation and the current Revenue Commissioners interpretation thereof and is subject to change including retrospectively without notice. This is intended as a general guide only and is not a substitute for professional tax, legal and investment advice.