Self-Employed: Has Buy Out Bond & PRSA
Aisling is a self-employed graphic designer. She is 48 and has for 14 years, been contributing to a PRSA which is now worth €250,000. She also has a Buy Out Bond (or Personal Retirement Bond) from her time in employment with a previous employer, which is valued at €40,000. Aisling is interested in purchasing a property worth €235,000 through her pension.
The first step for Aisling would be to transfer her existing pension schemes into a self-administered pension vehicle. A Buy Out Bond (BOB) cannot be transferred into a PRSA, so the schemes must remain separate. However, Aisling can transfer both schemes into individual self-administered BOB and PRSA vehicles. Now that both schemes are with the same provider and self-administered, they can jointly invest in a property asset. A certain amount of the total value of each scheme must be retained in cash as liquidity, but the balance is available for investment. This remaining balance must be sufficient to cover the purchase price of the property and all costs and expenses associated with the purchase.
If you are interested in establishing a pension or buying property with your pension fund, speak to your financial advisor.