If you move jobs, or leave employment and were a member of an occupational pension scheme, you need to think about your options for the pension fund you have built up.
A Personal Retirement Bond, sometimes called a Buy-Out Bond is an option if you want to arrange a transfer of benefits to a personally owned pension plan, to access at retirement.
A Personal Retirement Bond is an individually owned pension policy. It may be taken out when a member of an occupational pension scheme leaves employment, leaves the pension scheme or when the scheme is wound up.The value of your pension benefits, from both your contributions and your
employer’s contributions may be transferred into a Personal Retirement Bond. However, If you have been a member of your previous scheme for less than two years, you can generally* only transfer the value of your personal contributions. When you reach retirement, you can then use your fund to provide retirement benefits. The retirement options available correspond to the rules of the occupational scheme the fund was previously held in. If you die before retirement, we will pay the value of your fund to your estate.
You don’t need to leave your pension benefits in the occupational pension scheme.
A Personal Retirement Bond is personally owned by you. It means you are in the driving seat, allowing you to
- Choose the funds that your money is invested in.
- Choose when to take your benefits (subject to certain conditions)
Also, like other approved pension arrangements, any investment growth is tax-free. A temporary government levy on pension funds (currently 0.6% p.a.) applies from 2011 to 2014.