I recently met a client who is 51 and worked for a large financial institution for 25 years. We’ll call her Mary (not her real name). The Defined Benefit Pension Scheme that she was a member of had a very large deficit.
Mary had been thinking of transferring her benefit away from the main scheme for a number of years as she was not confident that the amount promised by her former employer was an achievable figure based on the deficit in the scheme. She was still 16 years away from retirement age and the age profile of the other members of the scheme were mostly older than her.
Mary’s transfer value had been steadily increasing every year that she had enquired and she felt that the value offered in late 2016 as a comparison to her promised benefit was a good trade off when she considered the possibility of her benefits being reduced. Mary was also confident that she could increase her fund value before and after retirement to a level that would be comparable with her Defined Benefit Scheme.
Mary also liked the idea of having a benefit to leave to her family on her death (hopefully a long time after retirement!)
Mary transferred her benefit to a Personal Retirement Bond with an Irish Pension Provider. She is safe in the knowledge that the fund value is going to be based on her decisions and that she can retire her pension when it suits her.
If you would like to find out if you are eligible to cash in your Defined Benefit pension, get in touch and get advice.