Pension Consolidation Ireland

Clear advice on combining pensions from previous employment

If you have changed jobs during your career, you may have accumulated several pensions with different employers, schemes and pension providers.

Keeping track of multiple pensions can become difficult. You may not know what each pension is worth, where the money is invested, what charges you are paying or what income the pensions could provide when you retire.

Pension consolidation involves transferring some or all of your existing pension benefits into one retirement arrangement.

Combining pensions may make your retirement savings easier to manage, but it is not always the right decision. Existing benefits, guarantees, charges and transfer conditions must be examined before any pension is moved.

At Dooley Insurance Group, we review your existing pensions, explain your transfer options and help you understand whether consolidating, transferring or leaving each pension where it is may be more appropriate.

Arrange a Pension Consolidation Review

What is pension consolidation?

Pension consolidation is the process of bringing two or more pension arrangements together.

Depending on the type of pensions involved and your individual circumstances, benefits may be transferable into:

• A current occupational pension scheme
• A Personal Retirement Savings Account
• A Personal Retirement Bond
• Another suitable occupational pension scheme
• Another permitted pension arrangement

The Pensions Authority confirms that occupational pension benefits may be transferable to another occupational scheme, a PRSA, a Personal Retirement Bond or certain other approved arrangements. The rules and restrictions depend on the pensions involved and your circumstances.

Pension consolidation should only be considered after the existing and proposed arrangements have been compared properly.

Should I combine my pensions?

You may consider combining your pensions if you want a clearer view of your retirement savings or find it difficult to manage several arrangements.

Potential reasons for pension consolidation include:

• Keeping retirement savings in fewer places
• Receiving fewer pension statements
• Creating a clearer investment strategy
• Reviewing pension charges
• Reducing unnecessary duplication
• Making retirement planning easier
• Simplifying administration
• Bringing older pensions into an actively reviewed arrangement

However, convenience alone is not a sufficient reason to transfer a pension.

An older pension may include valuable guarantees, benefits or favourable terms that cannot be replaced. Any potential advantage must be weighed against what could be lost.

What pensions can be consolidated?

The pensions that may be transferable will depend on their structure, scheme rules and your personal circumstances.

Arrangements that may need to be reviewed include:

• Occupational pensions from previous employers
• Defined contribution pensions
• Personal Retirement Bonds
• Buyout bonds
• Personal pensions
• PRSAs
• Director pension arrangements
• Additional Voluntary Contributions
• Overseas pensions, where applicable

Not every pension can be transferred into every other pension arrangement.

Some transfers are restricted by pension legislation, Revenue rules, scheme conditions or the individual’s employment history. This is why the type of pension must be confirmed before any recommendation is made.

What happens to my pension when I leave a job?

When you leave an employment, the pension benefits built up through that employer do not simply disappear.

Depending on the scheme, your service, the value of the benefits and the applicable rules, you may be able to:

• Leave the pension in the existing scheme
• Transfer it to a new employer’s pension scheme
• Transfer it to a PRSA
• Transfer it to a Personal Retirement Bond
• Consider another permitted arrangement

Leaving the pension where it is may be suitable. Transferring it may also be suitable.

The correct decision depends on the benefits, costs, guarantees, investment options and access conditions attached to the existing scheme.

Benefits of pension consolidation

Combining pensions may offer several advantages where a transfer is suitable.

Easier pension management

Having fewer arrangements may make it easier to monitor contributions, investment performance, charges and projected retirement benefits.

A clearer retirement picture

Consolidation can provide a more complete view of how much you have saved and whether you are progressing towards your retirement income target.

A coordinated investment strategy

Older pensions may be invested in funds selected at different stages of your career. Consolidation may allow retirement savings to be managed under a more consistent investment strategy.

Simpler retirement planning

When retirement approaches, having fewer pension arrangements may make it easier to understand the benefits available and coordinate when they are accessed.

Ongoing pension reviews

Bringing older pensions into an actively managed arrangement may make it easier to review investment risk, performance, charges and retirement projections regularly.

These potential benefits must always be compared with the costs and benefits of retaining the existing pension.

Risks of pension consolidation

Pension consolidation is not automatically an improvement.

Important risks include:

Losing guaranteed benefits

An older pension may provide guaranteed investment returns, guaranteed annuity rates or other valuable benefits that would be lost following a transfer.

Losing defined benefits

A defined benefit pension may provide an income based on salary and service rather than the value of an individual investment fund.

Transferring a defined benefit pension can mean giving up a promised retirement income and taking on investment and longevity risk personally. Specialist advice is essential before considering this type of transfer.

Higher charges

The proposed pension may have higher management fees, contribution charges, adviser charges or other costs.

Giving up favourable scheme terms

Some occupational pension schemes provide favourable retirement, death or ill health benefits that may not be available under the proposed arrangement.

Changing investment risk

A transfer may move retirement savings into a different investment structure. The value may rise or fall depending on investment performance.

Losing flexibility

Keeping pensions separate may sometimes provide more options around retirement dates, benefit access or tax planning.

Every pension should be assessed individually before deciding whether consolidation is suitable.

Our pension consolidation review

A pension consolidation review begins by identifying every pension you hold and gathering the available information on each arrangement.

We review:

• The type of pension
• Current pension value
• Scheme rules
• Transfer value
• Existing guarantees
• Investment funds
• Investment performance
• Level of risk
• Annual management charges
• Other policy charges
• Retirement age
• Retirement benefits
• Death benefits
• Early retirement provisions
• Transfer penalties
• Available transfer destinations

We then compare the existing benefits with the arrangement into which the pension could be transferred.

The purpose of this review is to establish whether consolidation provides a genuine benefit rather than simply reducing the number of pension statements you receive.

Finding pensions from previous employment

It is common for people to lose track of an older workplace pension, particularly where the employer has closed, changed ownership or appointed a different pension administrator.

If you are trying to locate an old pension, useful information can include:

• The name of the former employer
• Your dates of employment
• Old payslips
• Previous pension statements
• The pension provider
• The pension scheme name
• Membership or policy numbers
• Contact details for former colleagues
• Information from the employer’s current HR department

Once the arrangement has been located, the administrator or provider can confirm the available information and whether a transfer value can be requested.

Transferring an old workplace pension

A pension from a previous employer may be transferable, but the destination will depend on the pension type and your circumstances.

Before transferring an old workplace pension, we consider:

• Whether the pension contains guarantees
• The value of the existing benefits
• The charges under both arrangements
• The available investment funds
• The retirement age
• Early retirement options
• Death benefits
• Your current employment status
• Your other pension arrangements
• Your expected retirement date

A transfer should only proceed where the reasons are clear and the benefits and risks have been explained.

Pension consolidation into a PRSA

Certain pension benefits may be transferable into a PRSA, subject to pension rules and individual circumstances.

A PRSA remains in your name and may offer flexibility if you change employment. It may also provide a range of investment funds and contribution options.

However, transferring into a PRSA may involve different charges, investment risks and retirement conditions.

The existing pension and proposed PRSA must be compared before proceeding.

Pension consolidation into a Personal Retirement Bond

A Personal Retirement Bond, also known as a buyout bond, may be used to receive pension benefits transferred from a previous occupational pension scheme.

The transferred value is invested in your name under a separate pension arrangement.

A Personal Retirement Bond may provide greater control over fund selection and ongoing pension management, but charges, investment risk and retirement options must be considered.

The bond remains connected to the employment from which the original pension benefits arose and is subject to the relevant pension rules.

Should I move my pension to my new employer?

A new employer may allow pension benefits from a previous scheme to be transferred into its occupational pension arrangement.

This can make pension administration easier, but the existing and new schemes should be compared carefully.

Important questions include:

• What charges apply?
• What funds are available?
• Are employer contributions affected?
• What retirement age applies?
• Are there valuable benefits in the former scheme?
• What happens if I leave the new employer?
• What death or ill health benefits apply?
• Will the transfer improve my retirement position?

The fact that a transfer is available does not mean it is automatically suitable.

Pension consolidation for company directors

Company directors may have pension benefits from previous employment, personal pension arrangements and pensions connected to their current company.

These pensions need to be considered alongside:

• Current company contributions
• Personal contributions
• Planned retirement age
• Business exit strategy
• Existing director pension arrangements
• Personal savings and investments
• Retirement income requirements
• Succession planning

Consolidating certain pensions may provide greater clarity, but the company structure, Revenue rules and existing pension benefits must be considered before making changes.

Pension consolidation for self employed people

Someone who becomes self employed may still have pension benefits from previous employment.

These existing benefits can form an important part of a wider retirement plan.

We help self employed clients understand what pensions they have, whether contributions can continue, what transfer options may be available and how older pensions should be considered alongside a personal pension or PRSA.

Is pension consolidation worth it?

Pension consolidation may be worthwhile where it genuinely improves how your retirement savings are managed, reduces unnecessary charges or creates a clearer retirement strategy.

It may not be worthwhile where valuable guarantees or benefits would be lost, charges would increase or the new arrangement does not provide a clear advantage.

The decision should be based on a comparison of the existing and proposed pensions rather than convenience alone.

Why choose Dooley Insurance Group?

Dooley Insurance Group has supported individuals, families and Irish businesses since 1957.

Our financial services team provides advice across pension consolidation, pension transfers, PRSAs, retirement planning and investments.

Our financial services team includes Conor Swan, QFA, RPA and SIA, Director, and David Renwick, Senior Financial Consultant.

With offices in Naas, County Kildare and Edenderry, County Offaly, we help clients locally and throughout Ireland review pensions from previous employment and understand their consolidation options.

Pension consolidation questions

Can I combine all my pensions into one?

It may be possible to combine several pensions, but not every pension can be transferred into every type of arrangement. The available options depend on the pension type, scheme rules and your circumstances.

Is it better to combine pensions?

Combining pensions can simplify management, but it may not be better if valuable guarantees, benefits or favourable charges would be lost.

Can I transfer a pension from a previous employer?

Many occupational pension benefits may be transferable to another occupational scheme, a PRSA, a Personal Retirement Bond or another permitted arrangement.

What is a Personal Retirement Bond?

A Personal Retirement Bond is an individual pension arrangement that can receive benefits transferred from a previous occupational pension scheme. It is also commonly called a buyout bond.

Can I transfer an old pension into a PRSA?

Certain pension benefits may be transferred into a PRSA, subject to eligibility, pension rules and the circumstances of the transfer.

Will I pay tax when transferring a pension?

An approved pension transfer will not normally create an immediate tax charge where it is completed in accordance with applicable pension and Revenue rules. Individual circumstances should be checked before proceeding.

Are there charges for transferring a pension?

Transfer charges or penalties may apply under the existing arrangement. The proposed pension may also have setup, management and adviser charges.

How long does a pension transfer take?

The timeframe depends on the existing scheme, provider, receiving arrangement, information required and complexity of the transfer.

Can I transfer a defined benefit pension?

A defined benefit transfer may be possible in certain circumstances, but it can involve giving up valuable guaranteed retirement income. Specialist advice is essential.

Should I transfer my pension when changing jobs?

Changing jobs is a good time to review your pension, but a transfer is not always necessary. Leaving the pension in the former employer’s scheme may remain suitable.

What happens if I do not transfer an old pension?

The pension will generally remain within the existing arrangement, subject to its rules. Its value, benefits, charges and investment performance should still be reviewed.

Can Dooleys find all my old pensions?

We can help you identify the information needed and review arrangements once the relevant pension provider or administrator has been located.

Arrange a pension consolidation review

If you have pensions from previous jobs or several arrangements with different providers, a pension consolidation review can help you understand where you stand.

We will examine the available information, compare the benefits and explain whether transferring, consolidating or retaining each pension may be more appropriate.

Contact Dooley Insurance Group to arrange your pension consolidation review.

The information on this page is general and does not constitute personal financial, legal or tax advice. Pension rules, transfer options, tax treatment and product availability may change. Recommendations can only be provided following an assessment of your individual circumstances and the products available through our agency appointments.

Dooley Insurances Ltd t/a Dooley Insurance & Mortgage Brokers and Dooley Insurance Group is regulated by the Central Bank of Ireland.