If I was a financial adviser I would take my pension with me!
Once upon a time Irish people looked for a job for life. No longer! The average number of job changes in a career today is 8.
Let’s let play this out from a pension and a financial planning perspective for a moment.
Most of us leave our pensions behind us when we leave employment and move onto pastures new. If this happens once, twice, or eight times during your career you really should give some consideration to how your pension money is been dealt with while you are working in your new job.
Company pension schemes are managed by scheme trustees. The trustees are individuals or trustee companies who make decisions on behalf of the pension scheme members. They make decisions about investments and charges, retirement ages and providers. Lots of things that affect the value of your pension fund. If you leave service you are presented with choices however. One of those choices is to move your accumulated fund to a Personal Retirement Bond, sometimes known as a Buy-Out Bond and I like this option.
Retirement Bonds are provided by insurance companies and pension providers and they are treated the same as standard pensions, meaning that the fund grows tax-free and you have the same options at retirement that you’d get through your company pension scheme. All the same rules apply.
The difference is that the Retirement Bond is held in your own name and you’re fully in control of all of the various factors that determine your pension fund value rather than the company pension trustees. That means that you can make decisions such as what funds to invest in, the charges, the provider and the investment strategy. The bond is fully portable so you can transfer it between providers too if you wish too. So lots of good things, while eradicated the bad or the uncontrollable.
Of course not many of you wake up every day and think, I’d love to get more control of my pension fund granted, and hence I have a job.
Being honest I don’t wake up every day and think about it either, until I get to work of course. But we do know what we are doing and we know how to ensure that each of our clients has the control of their pension assets that they should really have.
And there is one more really important point. The pension’s landscape in Ireland is changing and there is a significant move to get rid of Buy-Out Bonds altogether and replace them with PRSA’s. Now if I got into the detail of this move here you’d all be asleep by the time you got half way through so I’ll summarise. This is a backward step in my opinion for various reasons. The change is however likely to happen and will probably happen in 2018.
So there is some urgency here.
If you have left a company or indeed left several companies please get in touch with us. I think it is important we consider your pension situation and help you to get full control of it again.
Waking up just once and thinking about your pension situation, just once, could make a significant difference to your retirement. As Nike say, just do it!
As always get in touch with me directly on firstname.lastname@example.org or call Kathy on 01 531 0571 to arrange a chat.