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“What happens if . . .”

I am a member of a company pension plan and I leave the company?

Scenario 1: More than two years in the company pension plan

Should you leave your current employer after more than two years in the company pension plan, you will not be able to access your pension fund until you retire. However, you have a number of options in relation to the pension fund you have built up during your time in the company.

Your options once you leave the company pension plan with more the 2 years service:

  • You can usually leave the value of your pension fund in your previous employer's pension plan until you retire and then use it to get a retirement benefit. This is known as a deferred pension.
  • Alternatively you may be able to transfer your pension contributions to a new employer's company pension plan, if the new employer allows it.
  • If you do not join another company pension plan and you decide to set up a PRSA (Personal Retirement Savings Account) you can in certain circumstances transfer your contributions into it. You can then continue your saving for retirement.
  • The final option available is to take the pension contributions from your company plan when you leave and invest in what is known as a buy-out bond or Personal Retirement Bond (PRB) which is an individual lump sum investment. You cannot make any further contributions to the PRB.

Regardless of the option chosen, you will not have access to the funds until you retire. The above is subject to agreement by the trustees. For further information, contact the trustees of your plan or your pension plan adviser.

Scenario 2: Less than two years in the plan.

If you leave your employment with less than two years' service while a member of the company pension plan, you may or may not be entitled to the benefit of your employer's contributions. This will depend on the company pension plan rules.

The options as set out above in Scenario 1 apply to whatever benefit has been secured, whether it relates only to your own contributions or to both your contributions and those of your employer. However, you may also opt to receive the value of your own contributions immediately, less tax. If you opt for this, you forfeit the right to the benefit of your employer's contributions.

What happens if I can't work due to ill-health?

Ill-health cover and pension payment

If you are out of work due to ill-health, your employer may provide you with an ill-health benefit also known as income protection benefit. This is an insurance policy designed to replace your income if you are not able to work due to ill-health.

Where your employer offers this benefit the policy will provide salary cover if you are absent due to ill health for a certain period of time. If your employer has this type of policy, then you could receive up to 75% of your salary (including the State benefit). As an additional level of cover the policy may offer what is known as Premium Protection. Apart from covering your salary, the policy will also provide cover to continue the payment of your pension contributions should you be out of work due to ill-health.

Your 'Member Schedule' or 'Member Booklet' issued when you join the company pension plan, will give details of Ill-Health Benefit if it is provided by your employer.

Ill-health early retirement

Should you be forced to retire early on the grounds of ill-health your pension benefits will be made available to you at that stage (if the trustees agree).

What happens to my pension fund if I die before I retire?

If you die before you reach retirement age, your pension plan rules will determine what will be paid to your dependants. This benefit is known as Death in Service benefit and also known as Life Cover. The benefit for each company pension plan is different and may include one or all of the following:

  • A lump sum, often a multiple of your salary or pensionable salary
  • Payment of the value of your personal pension contributions, including any additional voluntary contributions (AVCs)
  • A spouse's or dependant's pension, payable for life
  • A child's or orphan's pension, normally ceasing at age 18 (later if in full-time education) subject to certain limits.

Your 'Member Schedule' or 'Member Booklet' will give details of Death-in-Service Benefits (or Life Cover) if it is provided by your employer.

What happens if I want to retire early?

Subject to agreement from your employer and trustees, you may be able to retire from age 50 onwards. However, this will mean that your pension will be much lower than if you had continued in employment and continued making contributions up to your expected retirement age, which is usually set at 65 years of age.

Your 'Member Schedule' or 'Member Booklet' will give details of the normal retirement age for your company pension plan.

WARNING: If you invest in this product you will not have any access to your money until your retirement date.

WARNING: The value of your investment may go down as well as up.

WARNING: The income you get from this investment may go down as well as up.

WARNING: The value of the fund may be affected by changes in currency exchange rates.

WARNING: If you invest in this product you may lose some or all of the money you invest.

Irish Life Assurance plc is regulated by the Central Bank of Ireland.

In the interest of customer service we may record and monitor calls. Irish Life Assurance plc, Registered in Ireland number 152576, Vat number 9F55923G.

Irish Life Assurance is part of the Irish Life and Permanent Group. Registered office is situated at Irish Life Centre, Lower Abbey Street, Dublin 1.

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