A new pension product which pays money if you live but also pays money if you don't is how Irish Progressive describes its new Retirement Options programme.
The product, introduced last week, offers a lump sum to family and dependents if the holder dies in retirement.
With traditional pension products, people who retire take a portion of their benefits in the form of a tax-free lump sum and use the balance to buy an annuity which will give them regular income throughout retirement.
The longer the pensioner lives, the greater the benefit from the annuity. But for those who die early in their retirement, the value of the capital they invested in that annuity disappears on death.
Irish Progressive's new product uses the residual retirement fund to purchase either a retirement cashback bond or a capital preserved annuity.
A retirement cashback bond is a tax-exempt approved pension arrangement. A small portion of the residual retirement fund is used to buy this stand-alone bond which will then pay a lump sum on the pensioner's death. The balance of the residual fund can be used to purchase a conventional annuity.
