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Is it possible to cash in pension ?

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  • 08-02-2011 12:28pm
    #1
    Humblepie
    Registered Users Posts: 94 ✭✭


    Hi, taking VR with my employer and have been paying pension contributions for the last 8 years. I've been told that under Pension Law I can not cash in the pension until I reach age 50 which is 18 years away. Is this true ? I understood there was a get out clause if it was required but you pay high rate of tax ?? (Not considering doing this, just wondering is it possible or not ?)


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    #2
    hmmm
    Registered Users Posts: 11,205 ✭✭✭✭hmmm


    I'm afraid not. I believe Revenue have allowed some people to cash-in in extraordinary circumstances but not in this case.


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    #3
    Humblepie
    Registered Users Posts: 94 ✭✭Humblepie


    hmmm wrote: »
    I'm afraid not. I believe Revenue have allowed some people to cash-in in extraordinary circumstances but not in this case.

    Right, any examples of what these extraordinary circumstances might be hmmm ?


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    #4
    Kennie1
    Registered Users Posts: 302 ✭✭Kennie1


    You will not be able to claim any part of your Occ pension before your normal retirement age as set down by the scheme, however you may request to transfer your benefits to a "Pension Buyout Bond" if you are in a "defined contribution scheme" then you will be able to draw down benefits at age 50. You may also do this for a "defined benefit scheme" also but this in the main is a very bad idea! as these types of pension are the best and you will not get good value by transfering to a buyout bond. If you were in a PRSA you will not be able to claim benefits before 60 and a buyout bond is not available on PRSA's

    There is only two way you can claim a pension early, first being that you are serious ill and will not be able to return to work and the second being that you are terminaly ill, otherwise you will have to wait until NRA.

    As you are taking VR you can waive your right to a taxfree lumpsum if you are in a Occ pension, this would be done to maximise your tax free cash on your redundancy payment, but the full balance of your pension must buy an annuity pension when you draw your pension benefits.


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    #5
    hmmm
    Registered Users Posts: 11,205 ✭✭✭✭hmmm


    Humblepie wrote: »
    Right, any examples of what these extraordinary circumstances might be hmmm ?
    I've heard of cases involving terminally ill people but that's it.


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