Dáil Éireann Debate, Wednesday - 27 June 2007
268 Deputy Paul Kehoe asked the Minister for Social and Family Affairs if it is possible for a person who was part of a company pension scheme and then left the company to bring their contributions to a new pension scheme; and if he will make a statement on the matter. [17965/07]
View answerPart III of the Pensions Act 1990 is designed to protect the pension entitlements built up by employees in a company pension scheme in the event of the person leaving his or her employment. The Act provides for the preservation of benefits accrued in an occupational pension scheme and the option for transferring such benefits to another pension scheme. All occupational pension schemes, except certain public sector schemes, are required under the Pensions Act to provide for preservation of benefits. Public sector schemes are exempt from these requirements subject to the condition that the benefits they provide for early leavers are no less favourable than those required by the Pensions Act. The way in which preserved benefit is calculated depends on whether the scheme is a defined benefit scheme or a defined contribution scheme. This preserved benefit is a proportion of the long service benefit to which the member would have been entitled if he or she had remained in relevant employment until reaching normal pensionable age and is calculated on an actuarial basis. The Pensions Act also provides for the annual revaluation of such preserved benefits in relation to defined benefit schemes.
Instead of availing of a preserved benefit in the scheme of the employment they are leaving, early leavers have a right to opt for a transfer payment to another scheme of which they are becoming a member or to an approved insurance policy or contract providing retirement benefits. In addition a person may transfer to a Personal Retirement Savings Account provided they have not been a member of the pension scheme from which they are transferring for more than 15 years. A transfer payment is the current cash equivalent, as calculated by the scheme actuary, of the preserved benefit to which the member would otherwise have been entitled. The transfer value payable in respect of any preserved benefit from a defined benefit scheme may be reduced by the trustees of the scheme on the advice of the scheme actuary, if the scheme does not satisfy the Funding Standard under the Pensions Act. This is designed to protect the viability of the scheme from which the person is transferring. In a defined contribution scheme the transfer payment is the accumulated value of the appropriate contributions paid in respect of the member. If an early leaver opts for a transfer payment to his or her new scheme, the trustees of that scheme must accept such payment and provide benefits equal in value to the amount of the transfer payment. A person who is leaving a pension scheme should always seek advice on which option is the best for him or her. The Pensions Board provide information booklets on the various aspects of the Pensions Act and they are available on the Board's website, www.pensionsboard.ie.
