In the context of RACs and PRSAs, which option would not provide the traditional benefit option when drawing benefits from a preserved DC?

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

Answer: (C)

The traditional benefit option is tied to a contract-based, scheme-style guarantee rather than flexible personal access. Keeping the preserved money in the former scheme maintains the original guarantees and income options provided by that scheme. Transferring to a Buy-Out Bond moves the value to an insured product, which can secure a guaranteed income in retirement, preserving a traditional-style benefit. Moving into your new employer’s pension scheme keeps benefits within another employer’s scheme framework with its own guaranteed options. Transferring to a PRSA, however, places the pot into a personal pension wrapper focused on flexible access, not the traditional guaranteed benefit structure, so it would not provide the traditional benefit option.