Unlock Your Pension Early

I am a deferred/former member of an Occupational Pension Scheme- can I unlock my pension benefits

In June 2016, The Minister for Finance amended the legislation governing occupational pension schemes and extended the access of more flexible retirement options to members & former members of occupational pension schemes. This means the Approved Retirement Fund, more commonly known as the ARF option has been applied to all individuals with Personal Retirement Bonds/Buy out Bonds.

In simple terms, what does the Approved Retirement Fund (ARF) option mean

If you have already transferred out of a previous defined benefit pension scheme, or you are currently considering taking a transfer value, you will have increased options on how you can draw down these benefits. You will have both

  • the option of taking your benefits based on your years’ service and final salary
  • or the new ARF option which allows you to take 25% of the fund as tax free cash and reinvest the balance subject to certain restrictions.

What does the Introduction of this new option mean for former members of defined benefit Schemes

The introduction of these new flexible options means that former members of occupational pension schemes can

  • Access their benefits from age 50 onwards (provided the previous scheme rules allowed or were amended to allow this option)
  • Take 25% of the value of the accumulated fund as tax free cash (up to a lifetime limit of €200K) & then transfer the residual amount to an Approved Minimum Retirement Fund & Approved Retirement Fund (see AMRF/ARF).

Should I transfer my Defined Benefit Pension Scheme to a Personal Retirement Bond

This is a personal decision which needs to be made by each individual according to their individual circumstances. However, we strongly recommend that you speak to one of our qualified advisors before making such a major financial decision. There are numerous factors to consider and you need to clearly understand the full implications of both options before making a decision. Our Pension Specialists have many years’ experience in these matters and we commit to delivering you with free, independent advice, delivered to you in easy to understand plain English.

The reasons/advantages to transfer your Defined Benefit Pension to a Personal Retirement Bond

Defined benefit pension schemes used to be regarded as the ‘Rolls Royce’’ of pensions. In recent years however, such schemes are under increasing pressure to deliver the promised level of benefits to their members. There are a number of factors which have contributed to this downfall;

  • People are living longer – which means its more expensive for the employer to provide ongoing benefits to scheme members.
  • Bond Yields have decreased dramatically in recent years due to a number of factors- global economic uncertainty, Brexit, & the slow recovery from the Financial Crash of 2008.
  • A large majority of Defined benefit schemes are still struggling to meet their liabilities and still carry large deficits


The advantages of transferring your Defined Benefit Pension to a Personal Retirement Bond

  • Many schemes are offering former members enhanced transfer values in order to reduce their future liabilities i.e. providing pensions for individuals into the future
  • The 25% tax free cash & AMRF/ARF option may provide a higher tax-free lump sum for individuals which they would not receive if they remain in the scheme
  • The ARF options allows each individual to gain control of their own Fund and invest it according to their attitude to risk
  • The ARF option allows for the preservation of wealth in retirement/death- with the value of the Pension Fund transferring to the surviving spouse as opposed to receiving an annuity payment if you remain in the scheme
  • Benefits may be accessed from age 50 onwards (depending on scheme rules)

What are the next steps if I want enquire about my Transfer Options

If you would like to get a transfer value and receive some impartial advice in relation to your transfer options you can contact one of our transfer specialists by telephone, email, live chat or by filling out the get help form on the right hand side of this page. With your permission, we will be happy to contact your pension provider and arrange the relevant information you need free of charge.

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