Left a job? Don’t forget your pension!

If you’ve come across this, then chances are that, like many others, you’re questioning the implications of your pension plan if you ever decide to leave your job. Or perhaps you have already left and want more information on what options are available for retirement planning?

How does my pension plan change when I leave my job? This is a question we hear quite often.

Our world is ever-evolving, and people now change jobs or even careers more often than before. As a result, many are leaving Pension savings behind with past employers. When shifting from one position to another there are countless things that must be taken into account – your Pension being an exceptionally crucial one! 

Choosing to leave your Pension behind may be tempting but it could harm your Retirement Planning if not included into an all-encompassing, long-term plan. You should consult with a Financial Advisor about how you are achieving or can enhance your Retirement objectives. When leaving employment in County Cork, there is the chance to evaluate what happens next with regards to pensions and related matters – making sure that this decision does not detrimentally impact future retirement goals.


When it comes to determining the available options for your pension plan, it all depends on whether you have a Defined Contribution (DC) or a Defined Benefits (DB). If you work in a private company, chances are that your pension plan is DC. However, if you are employed by civil and public services then DB plans tend to be more common. The options available will depend on which pension you are in.


Leaving Service Options: Defined Contribution Pension

When you end your employment, it’s crucial to understand that the trustees of the scheme legally own and manage your pension benefits. As a result, when you depart from the organization your legal status will shift from an ‘Active’ member to a ‘Deferred’ one. Let’s dive into what staying as a ‘Deferred’ entails shortly


When you leave work, make sure that you receive both documents – known as ‘Leaving Service Options letter’, and ‘Pension Benefits Options Statement’. These two papers are essential in understanding all aspects of how this transition affects your retirement funds.


This statement provides all the vital information you need to know when making your pension decisions. It includes noteworthy points such as: the date of joining and leaving the scheme, a value assessment of your Pension, and an extensive account of available options for each particular circumstance upon departure. As this is essential in mapping out potential paths forward, it’s advisable that you request this document from the trustees immediately!


There are three major options to consider for your pension.


 1: Leave it in the Pension scheme (in other words do nothing)


Preserved Benefits, as outlined in the Pensions Act, provide assurance that any pensions benefits gained from a certain type of employment remain within the scheme after leaving. While this offers potential advantages, there are also some drawbacks to be aware of. To ensure you make an informed decision about your pension plan and future security, it is best to speak with one of our knowledgeable advisors before proceeding further.


Doing nothing and leaving your Pension with the scheme may seem like an easy option, however it is not recommended. When you leave behind a Pension in this manner, you are essentially operating in the dark as the scheme will have no obligation to remain in contact with or provide updates on how they manage and invest your pension funds. This leaves you without any freedom to make investment decisions based on those reports.


By transferring your pension funds out of investments and into cash, you’re curtailing its potential for growth. Not only will this impede the ability to outpace inflation, it could also hinder when meeting retirement goals and objectives. To avoid incurring unnecessary charges or delays in achieving financial independence, evaluate the feasibility of keeping your pension fund invested with a reputable firm that can provide returns over time.


If you are considering leaving or have left already, and are looking to review your options, we would implore you to answer the following questions:


  • Are the charges fair and transparent?

  • Is the Pension Provider responsive?

  • Has your Pension performed well?

If your answers to the above questions did not give you confidence, it would be wise to consider taking your Pension with you.




As a deferred member, you still have the option to receive your pension at retirement. This includes the ability to take out a tax-free lump sum, transfer funds into an Annuity, or elect for an Approved Retirement Fund (ARF).



 As a Trustee of the scheme, you are not required to keep in contact with its members and provide regular updates.

  • Moreover, your Retirement options are determined by the rules established within the system. Additionally, since most schemes focus on catering for a large number of employees at once, there is usually only limited Investment opportunities available which could lead to underperformance in some cases.

  • Furthermore, after leaving their employer no access to Financial Advice is granted making it difficult for individuals’ retirement plans moving forward. Finally if someone passes away before they can retire then this may create complications amongst their dependents as well.


2: Transfer your pension to your new employer’s pension scheme

When you switch employers, transferring the value of your pension benefits to a new arrangement is usually possible. You can simply transfer it over to your fresh employer’s scheme, though not all schemes allow this – make certain to check with both employers first. While there are benefits and drawbacks in deciding on this option, it is strongly recommended that before proceeding you receive professional advice.


With this option, it is much simpler to calculate your complete pension package and determine the amount of income you will receive when retired since all funds are located in one place. This makes managing multiple pots unnecessary!


Although transferring your pension benefits may necessitate selling up existing assets in order to be transferred, this risks a lengthly period out of the market. Depending on current conditions, you could regrettably sell at a lower price and buy back for an increased amount.



 Streamline your retirement savings and take control of your future with pension consolidation. By keeping it in one place, you can easily monitor the growth of your wealth over time.



  • Switching schemes can potentially strip you of your salary and service-related rights. Should you decide to move jobs again, it is best that all questions surrounding the transition are answered beforehand.

  • Additionally, if not done correctly, transferring funds into your own name might be out of reach – resulting in forfeiting control over both money and investment decisions.

  • Lastly, taking advantage of the pension’s benefits must occur when departing from a new employer; no earlier than this point should any actions be taken for maximum benefit.


3. Transform your pension into an account that is personally owned by you.


Your retirement scheme allows you to move the value of your pension fund from one plan to another. You have the option of transferring it into a Personal Retirement Savings Account or a Buyout Bond, frequently referred to as a PRB. With these accounts, you are in complete control and can decide on the investment strategy yourself!




  • When you take full control of your pension and investment decisions, you can rest assured that all the funds are owned by you personally.

  • With advice from a trained Financial Advisor who develops an individualized strategy based on your risk profile to help attain retirement objectives, your accumulated benefits are protected.

  • Plus, transferring PRBs between providers is now incredibly straightforward! And when it’s time to retire; after age 50 -you will have access to generous tax-free lump sums as well as more options for withdrawal.



Annual Management Charges may vary based on the funds and asset classes you elect, however your financial advisor can provide counsel to help guide this decision.


4. (in limited circumstances) Take a refund of contributions

Individuals with fewer than two years of experience in the pension scheme may be eligible for a refund, less taxes at a basic rate. Note: If you proceed with this choice, your employer will receive their contributions back as well.


Which is the best option for you?

Ultimately, it’s up to you what path is right for you; but if you’re uncertain of how to move forward, consulting with a Financial Advisor may be the best solution. We are always willing and able to provide advice on personal financial decisions like these. The final decision rests upon each individual taking into account their particular circumstances; however we strongly encourage speaking with one of our experienced advisors prior to making any large-scale monetary choices since there are many variables that need considering along with an understanding of all implications before settling on a conclusion.


Our recommendation

The Personal Retirement Bond is the most ideal option in nearly all circumstances – it’s an easy, direct way to retain your pension entitlements if you ever change jobs. Furthermore, given that you accumulated these Pension savings yourself, why not take personal charge of them? The funds are yours after all!


Here at Riordan Financial, our unbiased Financial Advisors are here to help you decide if pension transfer is the right choice for you. If so, we’ll be your navigator throughout every step of this process.


Personal Retirement Bond (PRB)

When you seek greater control over your retirement savings and a better investment strategy, look no further than a Personal Retirement Bond (PRB)! With PRB’s, you can decide how much risk to take with guidance from qualified Financial Advisors. You even have the option of transferring it from one pension provider to another if you think that would give you more value in terms of charges, fund allocation rate as well as access to funds. However, please note that after purchase PRB’s cannot be contributed any longer.


Choosing this route will save you from having to communicate with your former employer or their Trustees. Though the Annual Management Charges may be a bit higher compared to other choices, they are still competitive and come along with an active management of the funds which could result in better performance over time. And one added benefit is that these costs have full transparency.


What happens at Retirement Date?

On retirement, you can benefit from a tax-free Lump Sum of either 25% of your fund or up to 150% of what your salary was based on service. The maximum amount that can be taken out is €200,000! Once the Retirement Lump Sum has been obtained, you may then opt for an Annuity which will provide a steady income throughout life or transfer the remaining balance into an Approved Retirement Fund (ARF). As part of Leaving Service Options: Defined Benefits Pension scheme by law, this lump sum payment must also be made.


When leaving you will have 3 options


  • Retained Benefits

  • Transfer to another DB scheme, recommended if available

  • Transfer to a personal pension plan


Retained Benefits

At Normal Retirement Age, you have the right to receive your Pension benefits. After leaving, these promised benefits will be adjusted for inflation and documented in a benefit statement by HR. Additionally, the granted amount is based on your service period and salary up until that date of departure.



With a Defined Benefit Scheme, you’ll receive the assurance of assured income at Retirement. You deserve to be provided with financial stability upon your retirement age.



Human Resources won’t be in regular contact with you and you may not have access to your benefits until the normal retirement age. In addition, if something were to happen before then it could become an issue for those that depend on you. You can also transfer pension benefits into a new Occupational Pension Scheme should you choose to do so.


If this option is available, it would be our recommended option


Transfer to a Personal Retirement Plan (PRB)

If you choose to transfer your pension account within the first two years of joining a Defined Benefit Scheme, you must be aware that it can be an irreversible decision. The value of your transferred funds will reflect the potential future annual benefit entitlements if the scheme is solvent; however, if your chosen scheme is not solvent then trust trustees are legally obligated to decrease its value as determined by an actuary.




By choosing to forgo the retained benefits option, you are forfeiting any guaranteed income that it would have provided.




When you choose to take control of your pension and investment decisions with a personally-owned fund, an experienced Financial Advisor can create a bespoke strategy based on your risk attitude that will bring you closer to achieving the retirement objectives you strive for. Not only can accumulated rights be maintained so that access to tax-free lump sums is possible, but transferring pension funds between providers has never been easier or faster! Plus – as if all of this wasn’t enough already -you now have the opportunity to draw upon benefits from age 50.


Before transferring from a Defined Benefits pension scheme, we strongly suggest that you get sound advice from an experienced advisor. When it comes time to start the transfer process away from your previous employer, reach out to the HR department at your old company and inquire about their ‘Leaving Service Options’ plan. This is going to be critical in helping you make sure all of your hard-earned benefits are moved safely over into another retirement savings vehicle as quickly and easily as possible!


The HR department or pension administrator will put forward your request to the trustees for a “Leaving Service Options Letter” that outlines all pertinent information including the amount of benefits you have accrued, and which options are available to you.


Upon receipt of this letter, we hope you will reach out to us either by phone or if a discussion with one of our qualified financial advisors would be more beneficial for your situation. We are here and ready to assist in any way possible.