Defined Benefit Transfer Options
Excluding public sector workers, there are now less than 140,000 active member of Defined Benefit (DB) pension schemes in Ireland and the number funded Db schemes has almost halved, from a little over 1,400 to a little less than 800 in the last 10 years.
A Pensions Authority report in 2015 confirmed that deferred members and pensioners now account for roughly 80% of the overall membership of DB schemes and almost 75% of their liabilities.
Until relatively recently, people viewed Db schemes as the “Rolls Royce” of pension schemes and switching out was seldom recommended.
However, whether to stay or jump is now a very real dilemma facing many deferred members, as DB schemes have encountered the “perfect storm” including the following:
- The cost of buying an Annuity has almost doubled in the past decade.
- Most schemes are now closed to new members, so the contributions from younger members are no longer available to support the benefits of those who have already retired or are about to do so.
- The employer is the primary source of funding any shortfall and considering the vast majority of members are either retirees or staff who have left employment, the employer commitment is questionable.
Many deferred members are now thinking the “unthinkable” and transferring from DB schemes in ever increasing numbers, to Personal Retirement Bonds (PRB), Personal Retirement Savings Accounts (PRSA) and Defined Contribution (DC) pension schemes, allowing them to better manage and control their investment strategies and retirement income.
Why not talk to use today and allow us to provide, simple, cost effective solutions for you and your family.