Irish Pension Information

What to do with your pension when changing jobs.

Moving Jobs & Your Pension

What to do with my pension when I change Jobs in Ireland is a question we are often asked. 

The answer will depend on your individual financial circumstances and your future goals.

Lets take a look at the options open to you and the pros and cons of each. This will make it easier to decide which options will work best for you.

Changing Employment

What to do with
your pension?

There are four options you should consider for your pension when you are changing jobs. 

1) You can leave your pension with your old employer.

2) You can transfer your pension to your new employer.

3) You can move your pension to a personal retirement bond.

4) If over 50 you can access some or all of your pension. 

Below we look at each of these options in more detail. 

Leaving Employment Pension Option 1

Leave Pension with
Old Employer

The first option is self explanatory. You simply leave your pension with your old employer. When you leave your pension behind in an old occupational (work) pension scheme you become a deferred member.

For many years it was not a requirement for pension providers to send deferred members an annual benefit statement. This will no longer be the case as the Irish Pensions Authority has stated that deferred members will be entitled to annual benefit statements from 2023/2024 onwards.

However, this highlights the point that deferred members are somewhat disregarded by their pension providers in our experience. The very fact that many pension providers did not send out annual benefit statements to deferred members for years speaks volumes. These members would not have known if their pensions were making or losing money. 

In some cases, we are led to believe that providers actually moved deferred members funds from the normal investment fund of the scheme into cash which guaranteed a loss for their deferred members due to inflation. 

 

 

Leaving Employment Pension Option 2

Move Pension to
New Employer

The next option is moving your pension to your new employer. There is one major consideration when bringing your pension with you to your new job and this is that you lock the retirement benefits away until you leave your new position. Completely removing your option to access the funds should you want/need to. 

 

Pension Access FAQ's

You Ask, We Answer

Get the answers to the questions we are asked most often about accessing your pension early. 

If you can’t find the answer to your question call our Free Pension Information Service on 01 255 2553 and a member of our team will be happy to help.

Cashing in your pension at 50 couple placing funds in jar with the word pension on it.

If you are 50 or over and no longer working for the same employer then you can access all or some of your pension while continuing to work. 

You can access your PRSA from 60 and continue working. Want access sooner? You can access your PRSA from 50 if you are not working and there have been employer or company contributions into your PRSA. 

Employer contributions are payments made into your pension fund directly from your employer. You may have had this arrangement if your employer did not have an occupational scheme set up.

Company contributions may have been made if you were a company director and the company made contributions to your pension before you took drawings from the company. 

You can find general information on PRSA’s here. If you would like to find out more about accessing your PRSA please review the remaining FAQ’s for the most relevant information.

You can cash in a defined benefit pension from age 50 once you are no longer working with the same company. There are special considerations which need to be applied when accessing Defined Benefit Pensions. We can connect you with an advisor that specialises in Defined Benefit pensions. Your advisor will simplify your options and easily guide you through the process of accessing your pension should you wish. 

There is no requirement to stop working while accessing some or all of your pension once the pension your are trying to access is not held with the company you are currently working with.

The only exception to this rule is that you cannot access a PRSA early from 50 while you are working.  You can return to work after you have accessed your PRSA. If you are 60 or over you do not need to be out of work to access a PRSA.

You don’t need a lot of information to access your pension. You simply need to complete a form with your name, date of birth, address and contact details. This can be completed online in a few seconds.

The form acts as a permission slip for your advisor to contact the pension provider and request the details of your pension. Once your advisor receives your pension details they can then put together a list of your options for you.

You can take 25% of your pension fund tax free. You can then invest the remainder of your fund or take it as a taxable lump sum.

Please note in some cases you may be able to access a higher tax free amount. This calculation will be run by your advisor once they have all of the details required. If you can access a higher tax free amount they will let you know when presenting your options. 

You can take 25% of your fund tax free up to a lifetime limit of €200,000.

If you take all your tax free lump sum but still want to take more from your pension then you will pay tax. 

If you are on the higher tax rate you will pay 40% tax on the funds you access over your tax free limit. 

If you are on the standard rate of tax you will pay 20% on the funds you access up to the normal limits. 

Example

Mary has €100k in her pension. Mary takes her tax free lump sum of €25k and has €75k left in the fund. 

Mary wants to take an additional lump sum of €50k from her fund and then invest the remaining 25k.

Mary is on the higher tax rate.

 

Tax Free Lum Sum = €25k

Taxable Lump Sum €50k @ 40% Tax = €30k 

(€20k Taken in Tax)

Amount Invested = €25k

You can lose a substantial amount of your fund if you decide to access the full fund while on the higher tax rate.

This is why many access their tax free lump sum now and then invest the remainder to take in the future when they will pay less tax. 

In retirement you will still pay tax on your pension income. However as you won’t be working, you will be able to take  €40k or less from your pension pot each year at the standard rate of tax. 

Your advisor can help make your decision easier by completing the calculations for you. You can then compare the different options and choose the one most suited to you. 

No, normally there are no penalties for accessing your pension early. 

There are some exceptions to the rule for example when you have transferred your pension into a Personal Retirement Bond and have invested it for a specific period of time.

If you try to access your fund during the investment period normally 5 years there may be a penalty. Your financial advisor will take into account any penalty (and notify you of it) when providing your options to you.

 

Before you decide whether or not you want to access your pension, you first need to get all your options. Once you have these you can then review each one and decide which options suit you.

If you decide that none of the options offered are suitable for you or if you simply change your mind there is no fee whatsoever. Your advisor will simply close the enquiry for you.

If you have instructed your advisor to access your pension but access is not granted for any reason then you will not be charged. 

No, accessing your pension will not affect your access to your contributory state pension. This is because you are entitled to your contributory pension no matter what your earnings or financial means.

If you have not made enough PRSI contributions (stamps) throughout your working life you may wish to apply for the non-contributory state pension. This pension is means tested so you will only receive it if you have no other meaningful income. 

If you plan to apply for the non-contributory state pension (you know that you have not made enough PRSI contributions) sometimes it is in your interest to access your pension early. This is so your non-contributory state pension is not reduced to allow for your pension income in retirement. 

Your Financial Advisor can review your state pension entitlements and will tailor the advice offered to allow you to maximise your entitlements in retirement.

If you decide to access some of your pension for example you only take your 25% Tax Free Lump Sum then in most cases there is no fee

The remaining 75% of your fund is invested for you to take later in life. Your advisor will receive a commission from the investment company (Aviva, Irish Life, Zurich etc.) for putting the investment with them and this normally covers the cost meaning you are not charged.

If you decide to access your full pension there is normally a fee. The fee charged will depend on the amount of work required to allow you to access your pension.

Any fees will be outlined to you in writing prior to your financial advisor commencing work on your case. These fees can be taken from your fund so you do not have to pay these fees upfront. 

You will be required to sign a fee agreement to confirm you are happy to pay any fee due prior to your advisor starting work on accessing your pension for you. This ensures you are aware of the fee due before you start the process. 

It can take approx. 12 to 24 weeks to complete your pension access request. In some cases you may receive your funds sooner but it is best to use this time frame if making plans which require you to have received your funds. 

We know safety is paramount when dealing with your pension. That is why we will only connect you with advisors who meet both of the following criteria.

The Central Bank of Ireland

Your Advisor’s firm will be registered and regulated by the Central Bank. Each authorised firm is provided with a registration number from the Central Bank of Ireland. This number allows you to independently verify that your advisor’s firm is authorised by the Central Bank.

  • The Advisor we connect you with will provide you with their Central Bank Registration Number. You can contact the Central Bank to confirm this number is authentic.
  • They will call you from the phone number listed for their firm on the Central Bank’s website.
 

Brokers Ireland

Many Financial Brokers are members of Brokers Ireland. Brokers Ireland is the representative body for brokers in Ireland. Your advisor’s firm will also be a member of Brokers Ireland. You can also verify this independently by contacting Brokers Ireland.

All the advisors we work with are authorised by the Central Bank of Ireland and are also members of Brokers Ireland.

Our Advisors Offer

Free Pension Access Reviews

1

complete the Access Your Pension Assessment

When you complete our online assessment you will find out instantly whether access is possible. 

2

We'll connect you with the right advisor

We will connect you with an experienced advisor who will review your pension in detail and present you with all the options open to you for FREE

3

Decide whether or not access is for you

Once you have all your options you can decide what suits you best. If you don’t like any of the options and don’t want to access there is no fee.

Our happy clients

We’ve helped thousands of people with their pension

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Age 60

5/5

“The first person I spoke to who actually made sense of pensions for me. No jargon or big words just the information I needed.”

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Age 51

5/5

“I wanted to access my pension because my mortgage payment had gone up and then gone up again. I accessed my pension and paid off the mortgage.

Ronan

Age 54

5/5

“I thought getting the pension out would be full of grief. I signed a few forms, the advisor did the rest and the money arrived in my bank account. Brilliant!”

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