What does portability mean in pension planning?

• A. The requirement to keep benefits within the same plan until retirement.
• B. The ability to transfer rights from one pension arrangement to another without losing benefits, or to consolidate multiple pensions.
• C. The obligation to purchase an annuity at retirement.
• D. The ability to withdraw full funds tax-free at any time.

Answer: (B)

Portability is about moving your pension rights from one arrangement to another without losing value, or combining several pensions into a single plan. This matters when you switch jobs or want to switch to a different provider, because it lets you preserve the benefits you’ve earned and keeps your retirement savings organized. The best description is that you can transfer rights between schemes or consolidate multiple pensions.

Avoiding the other ideas helps: staying in the same plan until retirement isn’t about moving rights at all, purchasing an annuity is about choosing a retirement income product, and withdrawing funds tax-free at any time isn’t a feature of pension portability and isn’t generally allowed.