Your Pension When Changing Jobs in Ireland: Leaving Service Options Explained
When you change jobs in Ireland, one of the decisions you need to make is what to do with your pension. Most people receive a Leaving Service Options letter from their pension administrator. It sets out the choices available and gives you a deadline – typically 30 to 90 days – to respond.
This guide explains your leaving service options, what to consider with each, and why the right answer depends on your individual situation.
What Are Your Leaving Service Options?
When you leave a defined contribution pension scheme in Ireland, your leaving service options generally include four choices.
Leave the pension where it is
Your pension stays in the current scheme. You stop contributing, but the fund continues to be managed by the trustees and grows or falls based on the investments in place.
This can make sense if your old scheme has features worth keeping – guaranteed annuity rates, defined benefit elements, or particularly competitive charges. It is worth checking the details before assuming this is the easiest route.
Things to be aware of: you may have limited control over investment strategy, charges may be higher than alternatives, and it is easy to lose track of pensions with old employers over time.
Transfer to your new employer’s scheme
If your new employer runs a pension scheme, you may be able to transfer your existing fund into it. This keeps everything in one place and simplifies retirement planning. A downside to doing this, however, would be that you would get rid of the original scheme rules and take on the new scheme rules of your current employer. This may have an impact on the amount of tax-free cash you can receive in the future.
Before transferring, compare the charges and investment options in both schemes. Group schemes often have lower annual management charges – but not always, and charges are not the only consideration.
Transfer to a Personal Retirement Bond (PRB)
A PRB (also called a Buy-Out Bond) is a pension in your own name. The fund is not affected by what happens to your former employer’s scheme, and you control the investment choice.
The trade-off is that you take on responsibility for managing it – and ensuring it remains appropriate as you approach retirement.
For more detail on PRBs, see our Personal Retirement Bond page.
Transfer to a PRSA
A Personal Retirement Savings Account is flexible and portable. You can continue contributing to it regardless of where you work, which suits people who want a single pension they can add to throughout their career.
Not Sure Which Leaving Service Option Is Right for You?
The right choice depends on what is in your old scheme, your new employer’s arrangements, and your broader financial situation. We can review your options and give you a clear recommendation.
An Illustrative Example: Emma
Emma, 34, recently changed jobs. Her pension from her previous employer was worth €48,000. She was not sure what to do with the Leaving Service Options letter.
When she reviewed the details with an adviser, she found her old scheme was a standard defined contribution arrangement with no guaranteed benefits. The annual management charge was 1.8%. Her new employer’s scheme charged 0.5%.
In her case, transferring to the new employer’s scheme made sense – lower charges, no guaranteed benefits to lose, and it kept things simple.
This is an illustrative example. The right choice for you depends on the specifics of your old scheme and your new arrangements.
A Note on Pension Charges When Changing Jobs
Charges matter, but they are not the whole picture.
Group schemes often have lower annual management charges because the employer has negotiated a rate. But they may also have fewer investment options and less flexibility than individual plans.
The question worth asking is not just which option has lower charges, but what you are getting for what you pay and whether the structure suits your situation over the long term.
What Your Leaving Service Options Letter Cannot Tell You
The letter sets out the choices. What it does not tell you is which choice is right for your specific situation. That depends on:
- Whether your old scheme has any guaranteed benefits worth preserving — uncommon, but it does occur, particularly in older schemes
- The actual charges in your old scheme and the alternatives
- How many pensions you have and how they fit together in your overall retirement plan
- Whether your new employer’s scheme is genuinely competitive
- Your marginal tax rate and how it affects your options
Some of these factors could change the recommendation significantly. A guaranteed annuity rate or defined benefit element in an old scheme can be worth considerably more than the transfer value alone suggests.
Review Your Pension Before the Deadline
Leaving Service Options letters typically give you 30 to 90 days to respond. After that, your old employer or trustees may make a decision on your behalf.
A Smart Financial consultation covers your old scheme documents, your leaving service options, and a clear recommendation. If a transfer makes sense, we handle the paperwork.
Or call us: 01 253 3242
Smart Financial Insurance Limited trading as Smart Financial is regulated by the Central Bank of Ireland. The value of your pension investment may go down as well as up.
