Should I consolidate my pension plans?

The days of working in the same company for 40 years and collecting your pension at the end is gone. People are moving around jobs more and more these days…and accumulating pensions funds along the way. Is it a good idea to keep them all together, transferring benefits into your new scheme or should you keep them separate? We will look at what you need to consider.

What are your options?

If you were part of a company pension scheme, you can do the following:

  • Leave it where it is
  • Transfer to your new employer pension scheme
  • Transfer it to a policy in your own name. This may be a pension called a Buy Out Bond or a PRSA (slightly different rules apply to these pensions but they basically do the same thing).

If you have personal pension plan that you contributed to on your own, it is already in your own name. If you want to transfer it to a work scheme, you have to transfer it to a PRSA first and then onto the work scheme.


For the larger employer based schemes, the employer usually pays the charges. If you then transfer it to your own name, you are responsible for paying the fees, so it can work out more expensive for you in the long run. Before you transfer to any new pension plan, you should always be aware of the charges and fees of the new plan you are moving to. Does it make sense from a cost point of view for you to do so?

Choices at retirement

You don’t have to mature all your pensions at the same time. Most defined contribution company pension plans can be matured from age 50 onwards without you having to stop working. This does not apply if you are an actively paying into a scheme though.

You can just mature an old pension and use the lump sum to pay off a debt or pay for education costs. You can let the others accumulate in value and mature them as you need them. And if the pension isn’t matured, it isn’t subject to imputed distribution

Death before retirement

This is very important. If you have “retained pension benefits”, that is pensions from an old employer and you died before retirement, the full value is paid out to your estate as a tax free lump sum. It doesn’t matter if it was in the old scheme, a Buy Out Bond or a PRSA.

If you transferred the benefits to your new employer scheme, the benefits are subject to the rules of the new scheme. Revenue rules state that the maximum lump sum payable to an active member is four times salary plus the value of any personal contributions. Anything over that must be used to purchase an annuity.


The administration of your various policies has to be manageable. I have four pensions myself, all in my own name and it doesn’t take much effort to manage them. But if you have loads of policies, you can lose track of them.

Also, if you keep policies in an old employer scheme, it is still under the scheme’s trust deeds, which is most likely your old employer. You will need the trustee to sign off on the maturity of the funds. For smaller companies, it may prove difficult to find the trustee decades later. Or if the company goes bust in the meantime, the liquidator has to sign off on it. So you need to keep on top of the location of your funds all the time. Even bigger schemes may change administrator and fund manager over the years and they tend not to don’t notify ex employees of any changes, so it is up to you to keep up to date…or transfer it into your own name or to your new employer scheme.

If you have any questions on whether to consolidate or not, drop me a line at