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Employer contributions when transferring pension

  • 07-01-2020 3:03pm
    #1
    maki
    Registered Users, Registered Users 2 Posts: 772 ✭✭✭


    I'm a member of a defined contribution scheme with my employer of about 6 months. I know that if I leave this scheme with less than 2 years of being a member, I will lose all employer contributions.

    However my understanding is that if I transfer my previous pension with about 3 years worth of contributions into my new one, this counts as part of the qualifying period and I will be able to retain my current employers contributions regardless of when I leave.

    Is this correct? Is so, is there a limit to how often this can be done? Assuming I keep transferring previous pensions into the newest one, does this mean I will always be able to hang on to employer contributions regardless of how long I stay at any given employer?


Comments

  • #2
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,737 Mod ✭✭✭✭Henry Ford III


    No it doesn't.

    Scheme service is what counts here, and if yours is less than 2 years you may lose the value of the employer contributions.


  • #3
    maki
    Registered Users, Registered Users 2 Posts: 772 ✭✭✭maki


    This document from Irish Life seems to confirm what I said though, unless "preserved benefits" are something else.

    Page 5: If member had more than 2 years service with the old employer then he immediately qualifies for preserved benefits in respect of the new employer’s scheme and no refund option is available

    Also here: https://www.bluewaterfp.ie/pensions-2/when-are-you-entitled-to-your-employers-pension-contributions/


  • #4
    Diziet
    Registered Users, Registered Users 2 Posts: 831 ✭✭✭Diziet


    I know I retained my employer contributions when I was made redundant from a previous job, because I had transferred my previous pension.


  • #5
    dotsman
    Registered Users, Registered Users 2 Posts: 3,636 ✭✭✭dotsman


    Henry Ford III wrote: »
    No it doesn't.

    Scheme service is what counts here, and if yours is less than 2 years you may lose the value of the employer contributions.

    Don't think that is correct.

    Not an expert myself, but a quick bit of token research would suggest the OP is correct in their understanding...

    https://www.bluewaterfp.ie/pensions-2/when-are-you-entitled-to-your-employers-pension-contributions/

    Whole article is relevant, but second last section is key to the topic.


    Also...


    https://www.irishtimes.com/business/personal-finance/help-i-ve-changed-jobs-what-will-i-do-with-my-pension-1.3995119 (see DC Scheme, option 2 paragraphs 5 & 6)


  • #6
    The J Stands for Jay
    Registered Users, Registered Users 2 Posts: 5,786 ✭✭✭The J Stands for Jay


    maki wrote: »
    I'm a member of a defined contribution scheme with my employer of about 6 months. I know that if I leave this scheme with less than 2 years of being a member, I will lose all employer contributions.

    However my understanding is that if I transfer my previous pension with about 3 years worth of contributions into my new one, this counts as part of the qualifying period and I will be able to retain my current employers contributions regardless of when I leave.

    Is this correct? Is so, is there a limit to how often this can be done? Assuming I keep transferring previous pensions into the newest one, does this mean I will always be able to hang on to employer contributions regardless of how long I stay at any given employer?

    You are correct, transferred in service counts towards keeping the employer contributions.


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  • #7
    Michellenman
    Registered Users, Registered Users 2 Posts: 11,195 ✭✭✭✭Michellenman


    maki wrote: »
    I'm a member of a defined contribution scheme with my employer of about 6 months. I know that if I leave this scheme with less than 2 years of being a member, I will lose all employer contributions.

    However my understanding is that if I transfer my previous pension with about 3 years worth of contributions into my new one, this counts as part of the qualifying period and I will be able to retain my current employers contributions regardless of when I leave.

    Is this correct? Is so, is there a limit to how often this can be done? Assuming I keep transferring previous pensions into the newest one, does this mean I will always be able to hang on to employer contributions regardless of how long I stay at any given employer?

    It will depend on the rules of the current scheme. In general, yes, your understanding is correct. However it’s not unusual for there to be scheme specific rules around this. It will also depend on the type of plan you are transferring in to your current pension. For example, PRSAs don’t carry service when transferring and so if you transfer a PRSA to your current plan it won’t count towards the two year vesting period. Your best bet is to contact the administrators of the current pension and they’ll be able to tell you on the spot.


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