Company Pensions: 2 Must-know Access Options


Many people with pensions in their company do not understand the options they have with their pension. They may not know how to access it, or they may not know what to do with it when they do. This can be a huge source of stress for people who are retired or coming up to retirement age. We’ve been receiving a number of queries around how you can access the funds that were built up in pensions at retirement as well as the best option regarding how to maximise what they have built up and what they can draw down.


In Ireland there are two options that you can avail of. One is based on their salary and service history and the other is a tax-free lump sum and investment into an approved retirement fund RAF.


Option One: Salary & Service

The salary and service history option allows you to opt to draw down a regular pension income based on the salary and service you had built up throughout your career. This will be calculated by taking into account your age, the number of years of service and salaries you have earned over that period.

Pros of option one:

– Lifetime pension income

– Regular and guaranteed payments

Cons of option one:

– Potentially Lower lump sum payment

– Residual funds are not passed to Next of Kin on your death



Option Two: Tax Free Lump Sum and Investment into an Approved Retirement Fund RAF

The second option is to take a tax-free lump sum and then invest the surplus pension funds into an Approved Retirement Fund (ARF). This option allows you access greater control over how your money is invested and the flexibility to adjust investment strategies in line with your changing needs.


Pros of option two:

– Potentially Higher lump sum payment

– Greater flexibility in terms of investments strategies

– Possibility to adjust investment strategy according to changing needs

– Can ensure residual funds are passed to Next of Kin

Cons of option two:

– No guaranteed payments

– There is a risk of some capital loss with selected investment strategy

Whichever option you decide to go for should be carefully considered and tailored to your own specific needs and circumstances. It is important that you speak with a financial advisor who can provide tailored advice for your individual situation and discuss the pros and cons of each option in more detail. Finally, it is important to remember that pensions are designed as long-term investments and should not be touched before retirement age unless absolutely necessary. If you do plan to access the funds in your pension, it is best to seek expert advice first


The information provided is intended as a general guide only and does not constitute personalised financial or taxation advice. You should seek professional advice before taking any action in relation to the matters dealt with in this article. If you would like to discuss your options in more detail, please get in contact with Riordan Financial today. Our team can provide tailored advice for your individual situation and help you decide which pension option is right for you.