Leaving Job - What to do with pension(s)

higster

Hi,

I've just left my job after 12 years and have a question re pensions. I had...
1. defined benifit plan with a transfer value to another pension plan of ~€80k OR let it sit and have a €20k/year pension when I retire at 65 (27 years from now)
2. Defined Contribution plan with transfer value of #€44k.
3. AVC's with a transfer value of ~€13k

My new job has a defined benifit plan which I presume I could transfer the above to...but is this of any benifit really as I will end up with the same pension anyhow when I retire even if I don;t transfer the above...does this make sense...

Yours confused....

Chunkychops

Hi Higster
Not all pension plans allow this but THE BEST thing you can do is to join the defined benefit scheme in your new employment. Use your existing pension funds to buy "years of service" in the new scheme - if the trustee's of the scheme allow this.

Simply put, the defined benefit of your old scheme relates to your final salary in your old job which is, presumably far less than the expected final salary in your new jon at retirement age of 65.
Normal DB (defined benefit) schemes give you 1/60 of your final salary for each years of service. Therefore the more years in service to your credit the higher your pension is likely to be so instead of using your existing pension to take €20K per year at 65, you could end up buying several year of service instead. Your final salary at 65 could be €2m per annum (who knows) so even if your old pension just bought 5 yaesr service this would be worth 167K per annum at 65. I know my figures are hypothetical but the concept should be clear.
Regards
CC

higster

Cheers, makes good sense. New place does allow it by looks of things...only thing to figure out is the defined contribution one...

sofireland

You could leave the DC pension where it is, and leave it, or you could get a buy out bond, whereby you'd have control over what funds etc it was invested in.