A transfer value CANNOT be paid from a Buy-Out Bond to a(n):

• A. Prsa
• B. Irish employer pension scheme
• C. New Buy-Out Bond to be taken out by the individual
• D. Another Buy-Out Bond held by the same individual

Answer: (A)

When a transfer value is generated from a Buy-Out Bond, it can be paid only to pension arrangements that can legally receive and preserve the value as future pension rights. A Buy-Out Bond is a policy used to carry the benefits from an employer pension when a member leaves, and the rules allow the transfer value to move to another Buy-Out Bond, to a new Buy-Out Bond taken out by the individual, or to an Irish employer pension scheme where the benefits can continue within that scheme.

A Personal Retirement Savings Account (PRSA) is a personal pension product designed to hold contributions and invest them for retirement. It cannot accept a transfer value from a Buy-Out Bond in this context, because the transfer is about preserving specific benefit rights tied to a buy-out arrangement, which PRSAs are not set up to receive under these rules. So the transfer value cannot be paid to a PRSA, while it can be paid to the other eligible destinations mentioned.

In short, this tests understanding of where a buy-out transfer value can legally go; PRSAs aren’t eligible recipients for this type of transfer.