Many Irish residents that worked for over a 5 year period in a foreign country in a full time position leave behind a sizeable pension in that country. Legislation changes over the past few years have meant that a large number of these pensions can now be transferred with their owners in one lump sum once they leave this employment. Many of these companies have recently started offering enhanced Transfer values on ex-employee pensions in order to get these individuals to transfer their pension money out of the company’s pension scheme and into their own name.
If you are someone who has worked abroad and have not yet transferred your pension, it may be worth your while to look into this in greater detail. It is however very important that you do your homework before any decision is made as it may or may not be the best decision for you. It mainly depends on the transfer value that your ex employer is offering you versus the pension they are projecting at your normal retirement age. This differs from company to company.
The main benefits of transferring you pension back to Ireland are;
- The possibility of getting an Enhanced Transfer Value on your pension
- This pension money can be transferred in one lump sum
- It may also be possible for the you to get access to this pension money once its transferred if the correct criteria are met
- It reduces currency risk once it is transferred into Euro. This is especially relevant for people who worked in the UK due to the uncertainty around Brexit and the impact it will have on the British pound verses the Euro.
- The individual has full control over this money once its transferred. The individual can invest this wherever he/she wants within revenue rules. Its even possible to use this money to buy property or invest in a company etc.
- Before transferring your pension out of your ex employers pension scheme, the commitment to pay you this deferred pension to you in the future is entirely down to the goodwill of the company to honour it. They can change the arrangements at any time. For instance, If the Company pension fund is underfunded, they have the authority to change the pension amount they are projecting, the normal retirement age or change from a defined benefit to a defined contribution scheme etc. There are many examples of this occurring over the past few years.
- The main benefit of transferring your pension is that upon death, your full pension value is left as inheritance to your loved ones. This is not necessarily the case if the pension is left where it is.
Money Maximising Advisors have years of experience in helping people make the correct decision on whether or not they should transfer their pension back to Ireland. If you would like to locate your pension and/or request a transfer value from your ex employer, we can help you assess the best option for you. If you would like more information, please fill in the form below and we will send you more information. Alternatively you can contact us on the details below.