# Cancel my PRSA or not?



## wwjjd (16 Sep 2009)

Hi,

Just some opinions and advice that I'm looking for please?

I'm 27 work in marketing and events, paid just under €30,000 per annum - set up a PRSA a year ago, no employer contributions, put €200 per month in myself - got a statement last week stating my balance is €0.00 !

I think what I will do now, is to cancel my PRSA, opening up a good savings account and just save the same amount per month and keep saving away? I am very good at saving, disciplined and will set up a direct debit anyway.

I just feel that this way, even though I won't get the tax relief I will still be saving a certain amount per month and see and manage my savings rather than rely on a PRSA?

I guess I just want to hear your opinions on this idea? Good or bad....

Thanks,

L.


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## GSheehy (16 Sep 2009)

wwjjd said:


> . put €200 per month in myself - got a statement last week stating my balance is *€0.00* !


 
Have you double checked this with the product provider? Doesn't seem right.


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## wwjjd (16 Sep 2009)

I haven't, not yet anyway. I just assumed it was because I had a High Risk High Gain and vice versa PRSA set up and considering the "current climate" I figured it was right.


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## Towger (16 Sep 2009)

Could the first year of pension contributions been used to pay their salesmans commision?


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## GSheehy (16 Sep 2009)

Towger said:


> Could the first year of pension contributions been used to pay their salesmans commision?


 
No. The OP is paying it monthly and the max contribution charge on each €200 is €10.


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## boaber (16 Sep 2009)

As GSheehy suggests you should contact your PRSA provider - could be an error in the generation of the statement


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## LDFerguson (22 Sep 2009)

What was the name of the fund you were in?

Is it a Standard PRSA or a Non-Standard PRSA?


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## Constant (22 Sep 2009)

First time poster, long time reader.

Not wanting to hijack the thread, but was really keen to read the replies to the OP's original question.

Like WWJJD, I've a standard PRSA with no employer contributions. Began two years ago with €10k from SSIA & Government contribution, added some extra for tax purposes, and pay €300 per month.

I've now contributed over €21k but the plan is valued at €16.5k.

Like the OP, I'm a bit fed up and thinking about freezing the contributions and lodging the €300 per month into a savings account.

So back to the original question, is contributing to a savings account rather than a pension (despite the tax relief) the best option given the current climate?

Many thanks to all contributors and to WWJJD for starting the thread

C


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## wwjjd (25 Sep 2009)

I am meeting with a Financial Advisor on Monday and hoping to get answers to this question. I will let you know what he said. I am inclined myself though to go down the savings account road.


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## cancan (25 Sep 2009)

I'd say in the long run, probably be best to stick with it.....Judging by the graph, although if you can do better...
The 0 figure must be wrong.


*Historical S&P 500 Index Stock Market Returns**Year **Return *1973-14.70%1974-26.5%197537.2%197623.8%1977-7.2%19786.6%197918.4%198032.4%1981-4.9%198221.4%198322.519846.3%198532.2%198618.5%19875.2%198816.8%198931.5%1990-3.2%199130.5%19927.7%199310.0%19941.3%199537.4%199623.1%199733.4%199828.6%199921.0%2000-9.1%2001-11.90%2002-22.1%200328.7%200410.9%20054.9%200615.9%20075.49%2008-37.0%


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## wwjjd (7 Oct 2009)

Update!

Bank of Ireland screwed up - shock horror!

So the money has been coming out of my wages every month but the DD was not set up properly and so my money has been floating around in Bank of Ireland-land and not actually getting into my fund account.

I think its sorted now - but any benefits or profits I may have made over the past 11 months I won't get...!
They are just going to do one direct debit in the coming days and move all of the money into my fund account.

What do you think about that? Should I be kicking up a fuss or is there anything that can really be done about it?


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## GSheehy (7 Oct 2009)

wwjjd said:


> What do you think about that? Should I be kicking up a fuss or is there anything that can really be done about it?


 
Looks like they are taking the easy way out.

You could

i) insist that they allocate the the money to the account at the prevailing price on the day it was paid to them

ii) insist that they forego the contribution charge of 5%(?) on your contribution/s

or

iii) ask the employer to set up a PRSA Scheme with another provider that has a lower cost structure.

This is just lazy on their (BOI's) behalf.


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## z109 (7 Oct 2009)

wwjjd said:


> Update!
> 
> Bank of Ireland screwed up - shock horror!
> 
> ...


Maybe. You may have made something out of averaging in. Or you may be better off with just your initial payments. To give you a makey-uppy example:

So eleven months ago
 Nov, Dec, Jan, Feb, Mar - losses of various sizes, say 35%? overall
195*5=975-35% = 633.75

April onwards:
195 @ gain of 50% 
195 @ gain of 40%
195 @ gain of 30%
195 @ gain of 20%
195 @ gain of 10%
195 @ gain of 0%

Total 2096.25

195*11 = 2145

The above gains and losses are semi-random averages. You'd have to work out yourself from the performance of your fund how it performed during each month (or how each 195 performed for the months it was invested).

In any event, a good reason to close down the BoI PRSA is the 5% charge on entry. This has a large effect on the gains you make. You should be able to go through a broker and get a lower entry or exit charge (even a zero or negative charge).


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