Joanne, aged 48, has a preserved benefit in her former employer's DC pension scheme. She has now joined a new employer who operates a DC pension scheme. Which option in relation to her preserved benefit will NOT provide her with the traditional benefit option when she comes to draw on her benefits?

Joanne, aged 48, has a preserved benefit in her former employer's DC pension scheme. She has now joined a new employer who operates a DC pension scheme. Which option in relation to her preserved benefit will NOT provide her with the traditional benefit option when she comes to draw on her benefits?

• A. Keep preserved in former scheme
• B. Take transfer value to PRSA
• C. Take transfer value to Buy-Out Bond
• D. Take transfer value to her new employer's pension scheme

Answer: (B)

When you have a preserved benefit in a defined contribution scheme, the traditional way to draw benefits is to secure a lifetime income, typically by buying an annuity or accessing a guaranteed pension option within the chosen arrangement. Moving the preserved value to a PRSA shifts you into a flexible savings vehicle rather than preserving a built‑in, scheme-based lifetime income guarantee. A PRSA itself is not a pension scheme that automatically provides a guaranteed lifetime income; you would have to use the PRSA to buy an annuity separately or opt for drawdown, but the default, built‑in traditional option from the old DC scheme isn’t carried over. The other routes—keeping the benefit in the former scheme, or transferring to a Buy-Out Bond or to the new employer’s scheme—are more aligned with preserving or enabling a guaranteed, lifetime‑income path within a structured pension framework. So transferring to a PRSA is the route that does not inherently provide the traditional benefit option.

When you have a preserved benefit in a defined contribution scheme, the traditional way to draw benefits is to secure a lifetime income, typically by buying an annuity or accessing a guaranteed pension option within the chosen arrangement. Moving the preserved value to a PRSA shifts you into a flexible savings vehicle rather than preserving a built‑in, scheme-based lifetime income guarantee. A PRSA itself is not a pension scheme that automatically provides a guaranteed lifetime income; you would have to use the PRSA to buy an annuity separately or opt for drawdown, but the default, built‑in traditional option from the old DC scheme isn’t carried over. The other routes—keeping the benefit in the former scheme, or transferring to a Buy-Out Bond or to the new employer’s scheme—are more aligned with preserving or enabling a guaranteed, lifetime‑income path within a structured pension framework. So transferring to a PRSA is the route that does not inherently provide the traditional benefit option.