Have you any unclaimed pensions?
OK we admit – this may not sound like the most exciting topic in the world, but it just might make a significant difference to your financial future…
There is a surprisingly large amount of money sitting unclaimed in pension schemes in Ireland, the estimated amount of this ranges anywhere between €500million and €1billion. This money is owned by the beneficiaries – most likely ex-employees. An important point to remember about this is that all of this money is held in trust and completely separate to the assets of the employer. So even if the company is no longer in existence, the money is still sitting there, somewhere, waiting to be claimed by its owner – the ex-employee.
Some people dismiss this as not worth the hassle. However time and compound interest do wonderful things to pensions funds. Let’s assume for a minute that you left your first employer at age 30 and left behind your pension fund with €10,000 in it. The company is gone, you’ve no idea where to start looking for the money and don’t think it’s worth the hassle. However if the fund grows on average by 5% p.a. and you retire at age 68, it will then be worth almost €64,000. Now that is definitely worth chasing! The benefits may be even more valuable if they were built up in a Defined Benefit pension scheme.
A frustration for many people is that it is not always easy to find and claim old pension scheme benefits. Your old employer from 20/30 years ago may no longer be in existence, and you may not know who the pension scheme administrators were. Quite often, people have simply binned any correspondence that they got over the years. This can turn out to be an expensive mistake.
Unlike other countries, unfortunately in Ireland there is no central register of old pension schemes that you can access and find the necessary information. For example, the UK has a pension tracing service for the £20bn in unclaimed pensions there. This lack of a central service has been raised in the Dáil over the years, but to no avail. So what should you do if your old employer is no longer in existence?
This is a really important step. Retain any scheme benefit statements that you get for your pension scheme and retain contact details of the scheme administrators. Remember when you move house etc. to keep them updated of your changed contact details. Also if you change your name when you get married, it makes sense to get them to update their records.
Talk to old colleagues
Very often you will find that a slightly older ex-colleague may well have faced this exact same situation themselves in the recent past. Reach out to them – they just might be able to save you a whole heap of work by passing on the details of the pensions scheme administrator.
Contact The Pensions Authority
If all else fails, contact The Pensions Authority who regulate most of the pension schemes in Ireland. They just might be able to help you track down the administrators of your old scheme.
As mentioned earlier it is usually well worth the hassle of looking. These funds often have been sitting invested for a very long period of time, growing over the years. As Albert Einstein once said, “Compound interest is the eighth wonder of the world”. This could be the catalyst for adding very nicely to your available funds when you reach retirement.