Annual pension growth-gross or net?

B

barneys

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can any one tell me how to make sense of all the pension companys past performance quotes.
i have a pension opened for over 10 years now and when i have asked the company to tell me what the yearly rise has been they tell me approx 10% per year, but the figures do not add up, does their figures not deduct the usuall 5% you loose on every monthly installment and the approx 1.5% per year in managment fees?.this can have a serious affect over a long period, so i think they should not publish gross but nett figures as this can be missleading. any thoughts anyone?.
 
Re: pension yearly growth

Hi Barneys,
I have a PRSA with Irish Life, also 5% contribution charge and I have the same problem. I still find the whole private pension issue very confusing: taking 5% off all my contributions as a charge does not seem like a low-cost pension.
What happens, if the returns go negative. I mean, what will this look like after a few bad years? Hm. I thought standard PRSAs were to offer low-cost pensions to the general public who have no access to an occupational pension. Now there will be an incentive to roll over some of our SSIA into the PRSA but not even the Irish Life guy can tell me how much of my SSIA will be charged as "contribution".
There is alot of talk in the financial pages and by advisors that PRSAs are even better than SSIAs but regarding that you only get the return after many years of inflation, and will pay tax on it, is it really that rewarding? At the same time many of the target group only pay tax at 20%. Why does the government not get more people investing into a PRSA? Maybe because alot of us are still confused, e.g what effect would a PRSA have if you are only entitled to a means-tested non-contributory pension which could happen to alot of my friends?
Fanny
 
barneys said:
can any one tell me how to make sense of all the pension companys past performance quotes.
i have a pension opened for over 10 years now and when i have asked the company to tell me what the yearly rise has been they tell me approx 10% per year, but the figures do not add up, does their figures not deduct the usuall 5% you loose on every monthly installment and the approx 1.5% per year in managment fees?.this can have a serious affect over a long period, so i think they should not publish gross but nett figures as this can be missleading. any thoughts anyone?.
Click to expand...

Can you post:

Your contributions to date and the value of the fund (and your employers contributions, if any) and we'll see if we can reconcile the figures.

The value of your units in the fund should be stated net of both the contribution charge and the management fee.
 
You need to figure out
  • how much each contribution was
  • when it went in
  • what charges applied to the contribution
  • what the unit price was at the time of the contribution
  • what number of units your contribution bought
  • once you know this then you know how many units you have in total and can calculate the total value of your fund today (number of units by today's bid price)
  • this may even take into account the annual management fee since this should be reflected in the unit price
 
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