If you have been recently made redundant and have questions about what happens to your pension, contact one of Sheridan Insurances’ expert Financial Advisors today. Depending on the type of pension you have there will be a number of options available to you. One of our recent cases involved a client, Sam*, who had been made redundant from his employment of 20 years. He was a member of his company pension scheme and had accumulated a total pension fund of €150,000.
I went through all of Sam’s options and in line with his own personal circumstances, was able to recommend the most suitable plan of action for him.
He had a few options:
Leave the pension with his former employer
While Sam liked the idea that he could access these funds from age 50, This had a number of disadvantages including the fact that the employer was the trustee of the scheme. This would mean that when the time came for Sam to access these benefits, he would have to make contact with the old employer and track down the trustee to sign off on the retirement claim. As well as this, his pension was invested in a default strategy and Sam had very little control over his investment options.
Move the pension to his new employer’s scheme
Sam is also a member of his new employer’s pension scheme and he could move the pension from his old job into this scheme.
If he did so, he would be forfeiting the option of accessing his funds at age 50 (provided he is still working with the new employer).
The funds would be amalgamated which would limit his options down the line. Under pension legislation, you must take all pensions linked to the same employment, at the same time, and in the same manner. By keeping them separate and linked to two different employments, Sam was keeping his option open.
Transfer to a Personal Retirement Bond
In the end, I recommended that Sam transfer his pension to a Personal Retirment Bond (also known as a Buy Out Bond). This is a pension plan that is personally owned by Sam so there will be no need to track down trustees at retirement.
Sam is also now in complete control of the investment plan of his pension, he can decide exactly what mix of investment funds he’d like and can switch funds any time.
Sam can also access these retirement benefits anytime from age 50.
If you need help with your pension options, contact Sheridan Insurances today.
*Sam is not the client’s real name.