Pension Transfers

It does not always have to be that way

What happens to my company pension if I change jobs?

If you are leaving your current employer, you need to think about what happens to your company pension. There are a number of options available. You can:

  • Make your pension plan ‘paid up’ (leave the money in your pension plan);
  • Take a refund of your own contributions to the plan (if possible), or
  • Take a transfer value

Refunding contributions

You are entitled to a refund of your own (not your employer’s) contributions if you have been in the company pension less than two years, and there are no transfers in.

This refund is only based on the fund built up by your contributions and is taxed at the standard tax rate which applies on that date. In this case, we return the fund built up by the company’s contributions to the company and this is liable for corporation tax. This option is not available to 20% directors.

Transfer value

You may be able to transfer the value to another pension scheme, subject to certain restrictions. For example; the pension plan of a new employer, a PRSA (subject to certain restrictions) or a personal retirement bond. A personal retirement bond, is used by the trustees of a pension scheme to buy retirement benefits for former members of their pension scheme. A PRB is a personal policy in the name of the policy holder. (It switches from the Employer to the individual so the individual has complete control)