Who qualifies?

A Buy Out Bond is a pension bond into which you can transfer your fund if you leave your company pension scheme.

When do I have to decide if I want a Buy Out Bond?

You have up to two years after you leave a company pension to transfer your fund to a Buy Out Bond. Outside of the two year period you can still transfer to a Buy Out Bond if the Trustees agree.

 

How is my Buy Out Bond set up?

The bond is actually set up by the Trustees of your company pension. They apply for the bond in your name but once it is set up it belongs to you and the Trustees have no further involvement in it.

 

Who chooses the Buy Out Bond?

You do. Even though the Trustees have to sign the application form, you can generally choose any Buy Out Bond you like.

 

Can the Trustees transfer my fund to a Buy Out Bond without my consent?

Yes, but only under certain circumstances:

  1. If a company pension scheme is closing or being wound up,
  2. If the transfer value of your fund is less than an amount set by the Pensions Act, 1990, as amended, currently €10,000 and provided that:
    • you left the company at least 2 years ago,
    • you have not already requested a transfer to a Buy Out Bond, and
    • you are notified at least 30 days before the Trustees intend to transfer your fund.
  3. In any other cases where approval is given by the Pensions Board.

 

 What’s best for me?

When you leave a company pension, or if your company’s pension scheme is closing - you have four choices as to what you can do with the pension fund you have built up. You can:

  1. Leave it invested in the company pension until you retire - although this may not be an option if your company’s pension scheme is closing.
  2. Transfer it to the company pension of your new employer,
  3. Transfer it to a Personal Retirement Savings Account (PRSA) subject to certain conditions, or
  4. Transfer it to a Buy Out Bond in your name.

 

A summary of the principal features of a Buy Out Bond

The Buy Out Bond is issued in your name and belongs to you. Once set up, the trustees will have no further involvement.

  • You can choose when to take your retirement benefits. This can be any time from the earliest date retirement was allowed under your company pension (normally age 50). You could choose to take the benefits as late as age 70 if you were still working to that age. However, there is no access to your funds before age 50.
  • You choose the fund(s) in which your money is invested.

 

Your questions answered

Can I take my money out before retirement if I need it in the future?

No. Once you have put money into any pension plan you cannot withdraw it until you reach retirement (minimum age 50).

Can I use my Buy Out Bond as security for a loan?

No, Pensions are non-assignable. This means that they can only be used to provide benefits for you or your dependants and cannot be signed over to anyone else.

Can I add Life Cover on my Buy out Bond for my family?

Buy Out Bonds do not have the option of providing extra protection benefits. If you want life cover or income protection cover you must set them up separately from the Buy Out Bond.

Can I put more money into my Buy Out Bond later?

No. You cannot pay either regular or single premiums from your salary into a Buy Out Bond.

 

You can also contact Atlantic Financial Services on 1890 929 193 or email info@atlanticfinancialservices if you would like to discuss your options further or avail of our Pension Review Service.

Latest From Our Blog

  • Buy Out Bonds Explained

    Who qualifies?

    A Buy Out Bond is a pension bond into which you can transfer your fund if you leave your company pension scheme.

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