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Is it possible to freeze my pension payment?

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  • 04-06-2015 1:17pm
    #1
    kop-end
    Registered Users Posts: 227 ✭✭


    Hi All,

    I have a company pension and I am currently making a monthly contribution which I have been for the last 14 years.

    Is it possible to freeze my pension payments for an amount of time, i.e 12/24 months. I could really do with my contribution in my pocket at the moment.

    Any help/advice?

    Thanks


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    #2
    PaulM1977
    Banned (with Prison Access) Posts: 210 ✭✭PaulM1977


    Hi Kop-end,

    Yes, you should be able to freeze your pension payments if you want to, speak with your employer or with the company that looks after the company scheme to let them know your intentions and they should be able to allow you to stop payments in to the plan.

    PaulM


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    #3
    coylemj
    Registered Users Posts: 25,331 ✭✭✭✭coylemj


    PaulM1977 wrote: »
    Yes, you should be able to freeze your pension payments if you want to, speak with your employer or with the company that looks after the company scheme to let them know your intentions and they should be able to allow you to stop payments in to the plan.

    +1 But bear in mind that extra cash in your pocket is hard to give up and the contribution you stop paying could cost you a lot more than the extra dosh you see in your net salary, especially if your employer is matching your current contribution.

    Say you're contributing x% of your salary and your employer matches it, let's say that you contribute €200 per month your employer matches it. That €200 comes out of your salary before PAYE so if you are paying the top rate of tax (40%), it's only costing you a net €120. If you stop paying your contribution, so will your employer and while it will yield a net increase in monthly take-home pay of €120, it will cease a gross monthly payment of €400 to your pension fund, a net loss per month of €280. So in that example you will lose more then double what you gain.


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    #4
    kop-end
    Registered Users Posts: 227 ✭✭kop-end


    coylemj wrote: »
    +1 But bear in mind that extra cash in your pocket is hard to give up and the contribution you stop paying could cost you a lot more than the extra dosh you see in your net salary, especially if your employer is matching your current contribution.

    Say you're contributing x% of your salary and your employer matches it, let's say that you contribute €200 per month your employer matches it. That €200 comes out of your salary before PAYE so if you are paying the top rate of tax (40%), it's only costing you a net €120. If you stop paying your contribution, so will your employer and while it will yield a net increase in monthly take-home pay of €120, it will cease a gross monthly payment of €400 to your pension fund, a net loss per month of €280. So in that example you will lose more then double what you gain.

    Thank you both for your input guys, I understand that the benefit to me at the end of the month is nowhere near the benefit if I continue to pay as my employer does match my contribution.
    But, unfortunately, things are tight at the moment that an extra €100 in my pocket each month is a BIG help.

    I was just worried that it was not possible to freeze my contributions, I certainly do not want to terminate the pension I just need a breather.

    Thanks


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