Anyone who is about to leave their job to join another company, do contract work or become self-employed will be interested in new guidelines on buy-out bonds for pension scheme members, published by the Irish Association of Pension Funds.

A buy-out bond is designed to accept a transfer payment from an occupational pension scheme and is one option available for someone leaving a job, or has a pension scheme wound up. Others include taking a refund of contributions minus 25 per cent tax, subject to provisions in the Pensions Act; leaving accrued benefits with the former employer until retirement; or transferring the benefits to a new employer's pension scheme.

The guidelines cover all the main features surrounding buyout bonds and list the advantages and disadvantages to the employee of buying one. They also explain, in a simple question and answer format, the major issues that members tend to ask about. Among them are: can the member's pension benefits be transferred without consent? (in certain circumstances, yes); who chooses the bond? (usually the individual); the nature of the investment strategy and what happens to the buyout bond benefits when the member dies?

The guidelines also provide a useful checklist for scheme members under three sections - transfer options, choosing a bond and retirement options, including a definition of the provisions that can be made for a dependent and whether open market annuity options are available.

Free copies are available to occupational pension fund members from the IAPF at (01) 661 2427.