About to put €200k into a Zurich pension - is this fund mix 'OK'?

[Nava-35sdf]

Hi folks,

I requested a call back from the national pension authority a few weeks back re this query, but they've yet to reply.

A financial advisor helped me set up an executive pension a few years back. Here is the breakdown:

- 57.61% Indexed Top Tech 100
- 42.39% Prisma 5

I am now in a fortunate position where I can make a back payment of €200k. Up until this point, all my pension contributions have been evenly split between the two funds above.

I was hoping for some feedback - are these 'OK/Good' funds? I realise how stupid that sounds...

I am just nervous as I am about to transfer such a large sum into it. I am 35.

Any feedback would be greatly appreciated.

Thanks.

 

[time to plan]

What is so special about these funds? I have an Exec Pension and it's 100% in Vanguard global index tracker. I don't know much about investing so it feels like a solid baseline which I will stick to unless somebody can demonstrate a better choice.

But you do seem very exposed to the Tech industry.

 

[Nava-35sdf]

What is so special about these funds? I have an Exec Pension and it's 100% in Vanguard global index tracker. I don't know much about investing so it feels like a solid baseline which I will stick to unless somebody can demonstrate a better choice.

But you do seem very exposed to the Tech industry.

I've no idea to be honest - that was just what I was advised to do. Well, I was actually told to put it all in the top tech fund, but I decided to split it.

Looking at the fact sheets for these two funds, they share 8 of the same top 10 holidings...

 

[time to plan]

I've no idea to be honest - that was just what I was advised to do. Well, I was actually told to put it all in the top tech fund, but I decided to split it.

Looking at the fact sheets for these two funds, they share 8 of the same top 10 holidings...

As a not very experienced person, I would have alarm bells at an adviser who is telling you to put all of your pension in a Tech fund.

OK I see it is about 50% tech from the factsheet: https://www.zurichlife.ie/DocArchiv...99.614509842.1707313937-1579547191.1707313926

I wonder what the AMC is.

 

[Conan]

“National Pensions Authority “ ??
The Pensions Authority regulate pension schemes. They do not provide individual advice re pension investments.
The Indexed Top Tech is a very specialised fund (not very diversified ), but having said that it has performed very well over the past few years. But it is high risk (potentially very volatile).
At your age I can understand having some exposure to this sector, but 57% is very high. With perhaps 30 years to retirement, I would be looking at a very high Equity weighting (which will include Tech). But a more diversified mix that 57% in one sector.

 

[Gordon Gekko]

Why would the National Pensions Authority be involved in this? That sounds odd, be wary of fraud.

I don’t see the need for the tech fund. Just put it all into Prisma or the International Equity fund, depending on your age and other factors of course.

 

[Savvy]

Why would the National Pensions Authority be involved in this? That sounds odd, be wary of fraud.

Possibly the illnamed "National Pension Helpline".

Since currently the biggest companies in the world are the tech companies no surprise that the top spots are shared between your two funds.
Just comparing the Vanguard Global Stock fund and the Top Tech 100 fund it's top 8 match but just in differing positions!

If you have a proper executive pension I would be surprised if your provider allows you to invest in Indexed Top Tech 100 due to the lack of diversification under the new IORP rules. Certainly the likes of Davy have severely restricted funds/ETFs that EPP can invest into

 

[Nava-35sdf]

My mistake, I meant the national pensions helpline.

Yikes, these replies have confirmed my worries.

Is there any list of recommended financial advisors on this website?

 

[Dave Vanian]

National Pension Helpline is a private business, nothing more than a lead generation website. You make an enquiry and they pass the enquiry on to a broker.

Before committing your €200,000 you really need to speak to a Financial Broker who can explain to you about the various fund choices available, assess your own attitude to risk and recommend suitable fund(s) for you. At age 35 I'd be inclined to go for an index-tracking global equity fund as having the best long-term prospects, but be conscious that such a fund will fall and rise in value between now and when you retire. If you can't stomach that rollercoaster then a mix of equities and bonds might flatten it a bit.

You're going to have to wind up your Executive Pension Plan in the next year or two due to IORPS regulations, so now might be a good time to review the whole structure of the thing as well as the investments.

There are several good brokers that post here in the Pensions area on Askaboutmoney.com. Have a browse through some of the recent posts.

 

[MugsGame]

Also, have you considered tax treatment? What do you mean by a "back payment"? are you making the contribution from personal funds (net of tax, but way over the annual thresholds for tax relief) or from company funds?

 

[Dave Vanian]

Also, have you considered tax treatment? What do you mean by a "back payment"? are you making the contribution from personal funds (net of tax, but way over the annual thresholds for tax relief) or from company funds?

Good point. With an Executive Pension there are limits on total contributions relative to salary. There are also limits on how much your company can contribute as a "special" contribution in a single year. In some circumstances a company will need to spread tax relief on a large special contribution over a number of tax years. On the other hand, company contributions to a PRSA are unlimited. You really do need advice on the most suitable product as well as the most suitable fund choices, for your specific circumstances.

 

[Zenith63]

- 57.61% Indexed Top Tech 100
- 42.39% Prisma 5

I am now in a fortunate position where I can make a back payment of €200k. Up until this point, all my pension contributions have been evenly split between the two funds above.

I was hoping for some feedback - are these 'OK/Good' funds? I realise how stupid that sounds...

Just so that not every reply you get causes you a heart attack, I started a Zurich Exec Pension around the same age as you. Initially I was splitting it over Prisma 5/6, Indexed Top Tech 100, 5*5 Europe and International Equity Fund. More recently I have been allocating my contributions 100% to Indexed Top Tech 100 (basically the NASDAQ100) to increase my exposure to tech as I am close to the sector and think it will perform strongly over my investment timeline.

This is not a recommendation, just pointing out you would not be the only one. However Prisma5 and/or International Equity would be more sensible strategies for most I think.