Media Q&A: My employers Defined Benefit scheme is winding up, what should I do?


Published  19 June 2023
   2 min read

Consumer Question:

I've been a member of a company Defined Benefit (DB) pension scheme for 25 years and it is now winding up. The company has cut a number of benefits that people can get from its scheme - and so my DB pension will now be half of what I expected it to be. What can I do to make up for the shortfall in the pension I had been expecting? A defined contribution (DC) scheme is being set up and will be offered to all employees but I’ve only five years to go to retirement. I’ve no other pension.


Answer from Mark Reilly, Pension Proposition Lead at Royal London Ireland

From a tax relief perspective it is worthwhile joining the new company pension scheme as soon as you can and saving as much into it as you can afford to. If you are aged 60 or over, you can get tax relief on pension contributions equivalent to no more than 40% of your income, up to a maximum earnings amount of €115,000.

You could also set up your own personal pension but it is generally more advantageous to save into an employer’s pension scheme as your employer may also be paying contributions on your behalf into your pension fund. Also, the charges on the pension scheme may be lower than on a personal pension and life assurance might also be provided through the employer pension.

With DC schemes, the value of your pension depends on how much you and your employer (if it chooses to do so) pays into the pension scheme over your working life and how well that money was invested. With some DC pension schemes, the more you pay into your pension, the more your employer will pay. If that is available, you may want to take full advantage of any such offer.

As you have five years to go to retirement, you also need to carefully consider what your pension fund is invested in. Talking to a Financial Broker will help in choosing the best option for your own circumstances.



This question was submitted to and first published by The Sunday Independent


About Royal London Ireland

Royal London Ireland has a history of protecting its policyholders and their families in Ireland, and recently launched a new Pensions business in Ireland. Our business heritage in Ireland is nearly 200 years. The Caledonian Insurance Company's first office outside Edinburgh opened on Dame Street, Dublin 2 in 1824.

Today, Royal London Ireland is owned by The Royal London Mutual Insurance Society Limited – the largest mutual life insurance, pensions, and investment company in the UK, and in the top 25 mutuals globally, with assets under management of €178 billion, 8.6 million policies in force, and 4,100 employees. Figures quoted are as at 30 June 2023.

Royal London Ireland’s office is based at 47-49 St Stephen’s Green, Dublin 2.