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Transferring Pension

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  • 04-02-2009 1:00pm
    #1
    pavb2
    Registered Users Posts: 2,987 ✭✭✭


    Hi All

    I am looking to secure a business loan with the bank for which I have to set up a pension backed mortgage for €2500 per month.

    I already have a pension worth €50K in another fund.

    Can I transfer this fund to the new fund therefore saving €2500 per month for approx 24 months?

    If so what are the down sides if any of doing this?

    Thanks for any help


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    #2
    [Deleted User]
    Posts: 281 ✭✭ [Deleted User]


    You should get the bank to include your existing fund in any funding calculation that they do. This would have the effect of reducing the required 'new' pension contribution.

    I doubt that they would allow you to defer the €2,500 for 2 years.

    It may not be necessary to transfer the existing fund, but if you do that then you should find out i) what the on-going charges are on the existing fund ii) if there are any transfer-out penalties iii) what the charges are on the 'new' pension and iv) if there is a % of fund charge on the €50K if you transfer it into the 'new' pension.


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    #3
    pavb2
    Registered Users Posts: 2,987 ✭✭✭pavb2


    Thanks for reply Gerard, so if i read this correctly I may not be able to suspend monthly payments but may be able to reduce the overall sum paid in over payback period.


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    #4
    [Deleted User]
    Posts: 281 ✭✭ [Deleted User]


    Yes.

    It would probably be at the discretion of the bank to decide how they would view the €50K accumulated already, so it's probably best to ask them. They may be flexible on it.

    If the loan was drawn down already and you were finding it difficult to maintain the regular pension contribution, they might be glad to hear that you had €50K accumulated elsewhere that you could use as part of the funding requirement. They might be more receptive to a deferral in this case.

    If you are taking out the new pension with the bank, just watch the charges. Ask for a full disclosure quote on the charges. Shop around.


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