Can I Cash in my CWPS Pension

Help Cashing In Your CWPS Pension

Yes, it is possible to cash in your CWPS pension starting at age 50. However, not all scheme members will be eligible once they reach 50, as there are further restrictions.

 

In this guide, we will explain the rules for cashing in your CWPS pension. By the end of this detailed article, you should have a good understanding of whether or not you can cash in your CWPS pension.

 

If you prefer to skip the reading, you can use our early pension access tool to get an instant online indication. Visit “Can I cash in my pension fund early?” to use the free interactive tool.

 

At A Glance

CWPS Pension Overview

Two Men reviewing a CWPS pension document on a construction site wearing hard hats and high visibility clothing.

The Construction Workers Pension Scheme (CWPS) is the most popular pension fund for construction workers in Ireland.

 

It was established to help construction companies assist their employees in saving for their pensions.

 

Many construction companies, both large and small, are currently enrolled in the scheme.

CWPS Fund Performance

The CWPS offers a number of investment funds. Members are automatically moved to different funds based on their age, with the risk level of these funds decreasing as they near retirement.

 

This approach helps ensure that as you get closer to retirement, you are not invested in high-risk options that could result in significant losses you might not have time to recover.

 

In 2021, the scheme’s performance for members under 44 was outstanding, with a return of 14.40%. This was followed by a small loss of 0.3% in 2022.

 

Overall, members in this fund have seen a healthy average annual return of 6% over the last five years.

 

If you would like to see the historical performance of your fund, you can view the details of each fund’s performance on the CWPS website here

 

The CWPS also offers active members several additional benefits. Active members are those whose employer is currently paying into the scheme on their behalf.

 

CWPS Sick Pay Benefit

Many CWPS scheme members are unaware that being an active member entitles them to sick pay.

 

If you are out of work for more than 2 days, you can claim sick pay from the scheme at a rate of €50.00 per day starting from your 3rd day out of work.

 

You can claim a maximum of 50 sick days in any calendar year. You can find more information about sick pay on CWPS website here.

CWPS Death In Service Benefit

The CWPS also offers a death-in-service benefit to active members of their scheme. In the event of your death while in service, a payment of €100,000 is made to your next of kin.

 

Additionally, there is a payment of €5,000 for each child you have. This payment is also made to your next of kin. For more information on this benefit, see Death in Service Guidelines.

Retirement Age of the CWPS Scheme

The normal retirement age for the CWPS scheme is 65. However, in some cases, you can access your CWPS pension from age 50.

 

There are two methods to access your CWPS pension early. The first is directly through the CWPS, and the second is with the help of a financial advisor.

 

The option you choose will depend on your circumstances.

Cashing in Your Pension Early Through the CWPS

If you are over 50, have not contributed to the CWPS scheme in the last five years, and want to access your entire pension, the most efficient way is to contact the CWPS directly.

 

If you plan to partially access your fund, such as taking just your tax-free lump sum now and reinvesting the remaining funds, speaking with an independent financial advisor is a wise move.

 

For those who have contributed to their CWPS pension fund in the last five years, you may still be able to access your CWPS pension early. Keep reading to find out how.

Cashing in Your CWPS Pension Early With An Independent Financial Advisor

Construction Worker holding White Hard Hat

If you have spoken to the CWPS and they have advised that access to your pension is not possible, an independent financial advisor may be able to help.

 

There is a method, often referred to as a “loophole,” that allows you to remove the retirement age restrictions set by the CWPS.

 

This process is commonly used by qualified financial advisors to grant all their clients early access to employer pension funds from age 50 throughout Ireland not just CWPS members.

 

Essentially, the advisor transfers your pension from the CWPS to a Personal Retirement Bond (PRB) in your name. Once your funds are transferred to your new PRB, the old CWPS scheme rules no longer apply.

 

This enables you to access your pension fund without restrictions from age 50. You can cash out as much or as little of your fund as you wish, and you will be entitled to a tax-free pension lump sum at 50.

 

If you decide to cash out additional funds over your tax-free limit, these funds will be taxable. For more details, see tax on early pension withdrawal.

 

Recently, the CWPS has updated their scheme rules regarding transfers.

 

This is important because, in order to use this method to gain access to your funds, you need to be able to transfer your fund away from the CWPS.

New CWPS Pension Transfer Restrictions

With most employer pension schemes you become eligible to transfer your pension benefits once you leave your employment.

You can then transfer your pension fund to your new employer or to a PRB, where you can control the fund.

However, the CWPS has recently added new restrictions that prevent members from transferring their funds immediately.

To transfer your pension fund from the CWPS, you must now wait a full calendar year after the last year you made your final contribution.

So what does this actually mean? If you made a contribution in January 2023, you’ll have to wait until 2025 to transfer your pension for the purpose of early pension access.

 

Confusion Over Early Access to CWPS Pensions

Photo shows young man that is confused.

There seems to be a lot of confusion surrounding CWPS pensions and early access.

 

 

In a nutshell, if you are 50 or over and haven’t contributed in over five years, you should be able to access your pension directly through the CWPS.

 

 

If you have contributed in the last five years, transferring your funds to a PRB will enable you to access your funds early.

 

 

If you intend to access your full fund, you should contact the CWPS directly and ask if they can facilitate early access for you by transferring your fund into a PRB before seeking help from an advisor.

 

 

If you plan to access your entire fund, a financial advisor will need to charge you to set up the PRB. Therefore, you should only pursue this route if the CWPS confirms they cannot facilitate access for you directly.

When Is It A Good Idea To Speak To An Advisor

In some cases, speaking with a financial advisor will be worthwhile.

 

Below, we have listed some of these scenarios and explained why using a financial advisor is beneficial.

Denied Early Pension Access

If you are 50 or over and have been refused access directly through the CWPS, you should speak to a financial advisor.

 

The only exception is if you have made a contribution in the last two years.

 

In these cases, you should wait until the appropriate time has passed and then contact the CWPS directly again to see if they can provide early access.

 

If the CWPS is unable to provide you with access after the transfer period (one calendar year after the year you made your final contribution), an independent financial advisor can help process early access for you by using a PRB.

 

If you are accessing your full fund, there will be a fee for using a financial advisor to set up the PRB. Therefore, you should only approach an advisor if the CWPS cannot provide you with access directly after the transfer restriction period has ended.

 

Partially Accessing Your Fund

If you plan to access only a portion of your pension now, you should speak to a financial advisor regardless of whether the CWPS can provide access directly.

 

Why?

If you only want to take part of your pension now, you will need to reinvest the remaining funds to access at a later date.

 

An independent financial advisor can search the market for you and recommend a fund that suits your needs. They will compare several companies such as Aviva, Zurich, Irish Life, etc., to get you the best value investment.

 

If you deal with a pension provider directly, they only have to provide you with their best product. This means there might be a more suitable product out there for you, but the provider is not obliged to tell you about it.

There usually won't be a fee.

As you are making an investment, the financial advisor will receive a commission from the pension provider, which covers the advisor’s fee.

 

Pension providers pay all advisors a commission. For providers, it is the cost of acquiring a new client.

 

Think of it this way: if a provider wants to get new clients directly, they pay for advertising. If they want new clients from brokers, they pay a commission. Either way, there is a cost to acquiring new clients.

 

Essentially, this allows you to get free financial advice, free PRB set up where needed, and free investment advice, all paid for by your new pension provider.

Help Cashing In Your CWPS Pension

If you would like to cash in your full CWPS pension, you should contact the CWPS directly first.

 

If they can facilitate access directly, you won’t need to pay a fee. As you are accessing your full fund, you don’t need reinvestment advice.

 

You should contact them first to see if you can avoid using a financial advisor, as there is little benefit to using one when accessing your full CWPS pension.

 

If you are 50 or over and have not made a contribution in the last two years, but the CWPS cannot provide you with early access, you can request a free, no-obligation review with one of our broker partners to see if they can help.

 

The early pension access tool will check if you meet the eligibility requirements, and if you do, you will be able to request your free review.

 

If you plan to partially access your CWPS pension, such as taking your tax-free lump sum now and leaving the remaining funds to access at a later date, you should seek the help of an independent financial advisor.

 

Your advisor will process early access for you and optimize the performance of your remaining funds. In most cases, there will be no fee for this service.

 

A fee would normally only be charged if the commission your advisor receives is less than the fee needed to cover the work completed.

 

In these cases, your advisor will explain how much the fee is and why it is required. You can then decide whether or not this option is suitable for you. However, these cases are rare.

 

You can find out more about an early pension access review by checking out “How a free early pension access review works.”

Final Notes & Reminders

We hope you have found this article straightforward and helpful.

 

 

We aim to be completely transparent so you can easily see when using one of our broker partners will be beneficial or when the cost (if there is one) of using an advisor may outweigh the benefits.

 

 

For those wishing to access their full pension, the next step is to contact the CWPS directly to try and avoid a fee.

 

 

We can send you a text with a link to this page so you can easily come back and get help if needed.

 

Simply complete your details below, and we will send you a text with a link to return to this page.

 

If you only plan to access some of your pension now, the next step is to find out how to get your options prepared by an independent financial advisor for free, with no obligation to proceed with early access, by having an Early Pension Access Review.