Leaving Service Options
Options on Leaving pensionable service / employment
Preservation is a term defined in the Pensions Act to refer to a requirement for occupational pension schemes to maintain benefits for members after they leave. The same principle applies in relation to personal pensions and PRSAs.
Membership of an occupational pension scheme ceases when you leave that employment. If you have more than two years’ qualifying service, which normally means two years in the scheme as a member for pension purposes, you will be able to leave your benefit in the scheme until you retire (known as a deferred or preserved benefit), or move or transfer the value of your pension benefits to another pension arrangement.
If you stop paying into a personal pension or Personal Retirement Savings Account, your benefits will be held for you until you retire or you can transfer them to another arrangement.
Transfers of Benefit
Pension arrangements generally allow you to transfer your pension benefits from one arrangement to another. The transfer rules depend on the arrangement you are transferring from and the arrangement you are transferring to.
- Benefits from a retirement annuity contract can be transferred to another RAC or to a PRSA.
- Benefits from a PRSA can be transferred to another PRSA, to an occupational pension scheme or to an overseas arrangement.
- Benefits from an occupational scheme can be transferred to another occupational scheme, a PRSA, a buy-out bond (or personal retirement bond) with an insurance company, or an overseas pension arrangement. Certain Restrictions May Apply depending on service and value of fund. The rules and restrictions that apply depend on the circumstances.
Refund of member contributions
In certain circumstances, you may be eligible to take a refund of contributions paid into a pension arrangement. Your entitlement to a refund of contributions depends on the type of pension arrangement you have and the rules attaching to refunds of contributions.
If you are a member of a pension scheme, you may be obliged, if you have less than 2 years’ qualifying service (broadly service as a member of the scheme) when you leave service to take a refund of the value of your own contributions less tax at the basic rate.
Some schemes may permit you to leave your contributions in the scheme, even though they are not required to do so by law. AVCs are treated in the same way as the main scheme benefits.
Even if you are not obliged to take a refund of contributions and you have less than two years’ qualifying service, you may still choose to do so.
PRSA providers can pay a refund if you haven’t contributed for two years and have a PRSA worth less than €650 and were given three months’ written notice to terminate the PRSA.
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