When employees want to retire and start accessing their pension savings, they will need to contact us to inform us accordingly. This can be done at any time when they are between the ages of 61 and 70. The amounts saved under the Scheme cannot be paid out to the employee before they reach the age of 61, unless in the case of permanent disability or death.
When Employees make this decision, they will be able to opt to receive up to 30% of their savings as a tax-free lump sum. The remaining balance will be used to provide them with a regular income over a number of years, through what is known as “programmed withdrawals”. The income paid will be subject to income tax at the individual’s marginal rate of tax applicable at the time (less any available deductions).
The Policy Fee and Annual Management Charge will continue to apply to the account during retirement.
Should the Employee pass away before their savings run out, then the balance will be fully paid to their beneficiaries, free from tax.
Laferla does not offer tax advice, and clients are encouraged to seek advice from tax experts if they would like to know how taxation will apply in their specific circumstances.