Pension charges

V

victory1

Registered User
Messages
17
Hi,
I am trying to set up executive pension plan and my broker given the below fee structure.

No charge for Single Premium contributions so 100% of the amount is invested
·
99% allocation
· 0.25% fund management charge (eg €10,000 fund value = €25 fund management charge)

· Admin charge 0.65% to 1.85% depending on the fund.

What do you think about these charges? Are they standard charges or too expensive?
Many thanks.
 
If 100% of the money is invested, why have you an allocation of 99%? Your management fee is 0.95% standard.

What is the advisor getting? It really bugs me when advisors tell clients that there's no broker fee. Usually for once off payments, the insurance company covers the advisor fee, so tell the client that, not that it's no charge. You will probably find that in exchange for the insurance company paying the advisor fee, you can't transfer your benefits to another company for 5 years. That's no necessarily a bad thing, I use that myself, but clients need to know of the trade off.

Steven
www.bluewaterfp.ie
 
Hi Steven,
I should have been more clear.
100% is for single premiums and 99% allocation for regular premiums. Does it make sense now?
where did you get this 0.95% charge, he told me it's 0.25%. I am sorry it's bit confusing to me.

For example, If I am paying 1000 euros a month into pension what are my charges every month? He told me some thing when we meet and it's different in his email. SO I am trying to understand overall cost for 1000 a month.
Thanks .
 
Hi
I am a public sector employee and would like to make some regular AVC's I contacted a broker and was quoted the following, my husband advised against it as he said the charges were very high, what do you think
contribution charge at start date is 5%
contribution charge on future regular AVC-PRSA is 5 %
single contributions 5%
Annual fund charge on units purchased is 1.00% plus an additional charge of 0.25% or 0.35% for certain funds
all advice welcome, thanks.
 
Dragonboy,
I assume this is through Cornmarket. They are expensive. If you are a public servant, Cornmarket tend to manage Group AVC plans for public sector employees. But I think you can get better value by setting up a Stand-Alone PRSA AVC plan. They only disadvantage of this is that you may not get the contributions deducted at source and may have to reclaim tax relief at the end of each year. But you should be able to get better terms than you have quoted above (particularly on an "execution only" basis).
 
Hi it's not actually with corn market but with a different firm that will deduct at source I work in a small public sector body and they got in there, thanks for you advise
 
dragonboy said:
Hi it's not actually with corn market but with a different firm that will deduct at source I work in a small public sector body and they got in there, thanks for you advise
Click to expand...

The 'broker' (firm) isn't deducting at source, the product provider (pension company) is. You should ask the employer for a list of the pension companies that they will do salary deduction for. You may then be able to set up the avc on an execution only basis (as Conan has suggested) with one of these companies.

If you need advice on the company, product or funds then this has to be paid for; by fee or by contribution charge. Execution only doesn't suit everyone, you have to be pretty knowledgeable about what exactly you want.

I have seen cases where the employer has added another product provider (and/or broker) to their list of salary deduction companies on the specific request of employees (inc. public sector) where they want to set up the pension on an execution only basis as the broker that 'got in', as you say, wouldn't relent on the contribution charge.
 
victory1 said:
Hi,
I am trying to set up executive pension plan and my broker given the below fee structure.

No charge for Single Premium contributions so 100% of the amount is invested
·
99% allocation
· 0.25% fund management charge (eg €10,000 fund value = €25 fund management charge)

· Admin charge 0.65% to 1.85% depending on the fund.

What do you think about these charges? Are they standard charges or too expensive?
Many thanks.
Click to expand...

Has the broker told you which company this charging structure is with? It looks like a Friends First one but you've no mention of policy fees or early exit penalties (charges). They have a fund charge (depending on fund/s selected starting at) 0.65% and a plan charge of 0.25%.

Have you agreed how the advice you're getting is going to be paid for?
 
victory1 said:
Hi Steven,
I should have been more clear.
100% is for single premiums and 99% allocation for regular premiums. Does it make sense now?
where did you get this 0.95% charge, he told me it's 0.25%. I am sorry it's bit confusing to me.

For example, If I am paying 1000 euros a month into pension what are my charges every month? He told me some thing when we meet and it's different in his email. SO I am trying to understand overall cost for 1000 a month.
Thanks .
Click to expand...

Sorry, I didn't see the single premium bit at the beginning.

The 0.65% admin charge is just another word for an annual management charge. So in total, it's 0.95%.

If you are paying €1,000 a month, you will have €990 invested and 0.95% will be deducted from the value of the fund. So, if that €1,000 grows to €2,000, the AMC will go from €9.50 to €19.

You could look at paying the advisor a fee for the work done and get a lower annual management fee as the insurance company doesn't have to recoup any commission payments.


Steven
www.bluewaterfp.ie
 
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