# PENSION CONTRIBUTIONS ARE A WASTE



## Bart Simpson (20 Jul 2004)

Hi,

I want to be a little contrary on this web site. Just looking at the various tables in yesterdays Business Post and looking at my own pension statements for the last 10 years (not just over the bear market period) I am really pessimistic about having a good pension at 65 years despite contributing €13,000 pa AVC's. I am 44 years.

The bottom line is that true net performance over time AFTER charges is pretty miserable in this country.

We are all conned into frantic AVC contributions on the back of tax breaks which are in fact tax deferrals not tax breaks.
This same tax derrals simply ACT TO HIDE THE INCOMPETENCE OF THE AVERAGE IRISH FUND MANAGER.

I am further dismayed when I read in the same week ends papers that the typical Irish fund manager is far more likely to give a buy rating to a stock than his international counterpart.

THINK CAREFULLY ALL YOU AVC contributors. Look back at say 10 years of YOUR PENSION STATEMENTS. I PROMISE YOU IT IS NOT PLEASANT READING.

YOU ARE BEING RIPPED OF BY A LAZY, INCOMPETENT, OVERPAID BUNCH OF UNDERPERFORMERS


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## rainyday (20 Jul 2004)

So what's the alternative?


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## Bart Simpson (20 Jul 2004)

Rainyday,

What's the alternative?
Well I don't really know. Certainly the alternative isn't inertia on the punters behalf, but continuing to be frightened like lemmings into handing our money over to underperforming overcharging fund managers is JUST NOT ACCEPTABLE.

Be frank here, how many people have you met or know who have retired after a lifetime of pension contributions who have anythinh like what they expected or were led to believe to expect in the way of retirement income?

Not many I bet.

Personally I am now at the point where I am considering stopping my AVC contributions and directing the net money saved (around €7280) into purchase of stocks from one of the top 10 companies in the ISEQ in tranches of €5,000 or more.

I have dabbled consistently over the past 10 years primarily in Irish financial stocks in tranches of anything from €3k to €5k. I am not an expert in the stock market but I sure feel a lot happier with my own performance than with that of my pension manager.


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## rainyday (20 Jul 2004)

Not defending the fund managers, but you would want to be doing a WHOLE lot better than the average fund manager to make up for the tax deferral that you are missing out on with your DIY approach.


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## Bart Simpson (20 Jul 2004)

Rainyday,

That is the key point. TAX DEFFERRALS is what blinds the punters and props up the industry non performers.

ITS TAX DEFERRED not TAX FORGIVEN. You and I will pay this tax in due course if we live long enough to collect our pension.

If we kick the bucket 2 months into retirement the lazy so ands so fund manager walks away with our booty and no doubt uses it to pay himself a handsome PERFORMANCE BONUS.

Is this not a crazy situation?


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## rainyday (20 Jul 2004)

> You and I will pay this tax in due course if we live long enough to collect our pension.


Not fully accurate - we will pay *some* tax in retirement, but the deferral allows us to use our tax credits in retirement, which would not otherwise be the case.

Crazy or not, I'm not sure your alternative approach stands up. It might make you feel better by not giving money to fund managers, but you would probably end up poorer by missing out on the tax deferral and the tax free growth within the fund.


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## Alan Moore (20 Jul 2004)

*Would agree with Rainyday here......*

Tax Deferral Issue:

While paying pension contributions you get tax relief at the top rate that you pay.

On retirement, you get a tax free lump sum plus the leftover is normally used to purchase a pension. The pension at best is normally roughly 50% of your pre retirement income. As raindyday points out you then get to apply your tax credits with the result the tax paid as a percentage of pension is normally a lot closer to 0% than the 42% relief you achieved over the course of your membership. e.g. if you earn 50K before retirement you will pay 42% tax on your top earnings. If your income drops to 20-25K post retirement how much tax are you going to pay. Very little if any at all.

Fund Managers:
On fund managers, if you don't like Irish fund managers there are plenty of foreign fund managers available that your scheme could take on. 

Having said that, have overseas fund managers really outperformed Irish managers. I'll bet that Irish property fund managers have outperformed nearly everyone worldwide but have underperformed with equities.

Returns:
Returns have been disappointing over the last 10 years. However most people who had money 10 years ago thought that equitities were the sure way of making money. Sure Eircom was only 6 years back and we still thought it a safe bet. Reminds me of where we are with property now ( but thats another argument ).  Most pension funds were biased towards equities which have underperformed.

Pension planning is a marathon not a sprint, you are going to have disappointing patches just as you've had periods of huge growth. e.g. the Dow Jones grew by over 200% during both Clintons and Reagans spells in charge.

I am biased as I am a financial advisor but I have "conned myself" into paying 17% salary into AVC's along with trying to pay a hefty mortgage.

I still have yet to see a more matematically beneficial method of saving for retirement given the level of risk I want to take.


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## Alan Moore (20 Jul 2004)

*PS.....*

Just a few figures to show AVCs are normally better than your own personal share portfolio outside a pension scheme.

Say you have 10,000 and buy shares. Assume you get 6% growth each year for 15 years. They will be worth 23,965 after 15 years. Less CGT and you have 21,172.

Say you put 10K into a pension scheme. If you are a higher rate payer you will get 17,857 into the scheme (asumes 42% tax + 2% prsi relief). And say that you only achieved growth of 5% per annum ( i.e. 1% less than achieved yourself ). The fund will grow to 37,123. Since it is an AVC I can put this into an ARF and draw down as I need. And I would hope to pay very little tax on this. I would need to pay 43% tax and PRSI on this to have faired worse. Some will but the vast majority won't as they can use credits and allowances.

And its even more beneficial if you are a 5% proprietary director, a member of a PRSA or a personal pension as you are guaranteed that at least 25% of the fund won't be subject to any tax.


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## Guest (20 Jul 2004)

Just my tuppence worth...

> I want to be a little contrary on this web site. Just looking at the various tables in yesterdays Business Post and looking at my own pension statements for the last 10 years (not just over the bear market period) I am really pessimistic about having a good pension at 65 years despite contributing €13,000 pa AVC's. I am 44 years.

Regualar non pension investments over the same period would presumably have provided similar levels of return (and possibly less once tax issues have been factored in)?

> The bottom line is that true net performance over time AFTER charges is pretty miserable in this country.

Part of the problem may be that in the past ridiculous levels of charges on pension and other investment products were permissable and the norm - e.g. anything from the first six months to two years of all contributions, initial units, high bid-offer spreads, commissions, annual management fees etc. At least charges these days on pension and non pension investments are generally at a much more reasonable level. Obviously this simply means that more is invested from day one but doesn't influence market performance...

> We are all conned into frantic AVC contributions on the back of tax breaks which are in fact tax deferrals not tax breaks.

It's up to individuals to assess their own needs (possibly in conjunction with a suitably qualified and authorised independent professional advisor) and then plan for these. There's no point in blaming advertising for most or all of our woes in this context or any other.  We all have certain choices to make in life and usually can't really blame others if we make the wrong ones or delegate this responsibility to somebody else. (With the obvious exception of mis-selling of course).

> I am further dismayed when I read in the same week ends papers that the typical Irish fund manager is far more likely to give a buy rating to a stock than his international counterpart.

Stock tips are generally useless regardless of the supposed expertise of the person providing them. Nobody can predict the markets.

> THINK CAREFULLY ALL YOU AVC contributors. Look back at say 10 years of YOUR PENSION STATEMENTS. I PROMISE YOU IT IS NOT PLEASANT READING.

Past performance is no guide to future returns.

> YOU ARE BEING RIPPED OF BY A LAZY, INCOMPETENT, OVERPAID BUNCH OF UNDERPERFORMERS

Topical and controversial but hardly constructive...?

By the way - I am just an average punter with no involvement in the financial industry by the way. As it happens I currently squirrel away the max 20% tax relief limit for my age in my PRSA and have (sporadically) over the past decade or so tried to maximise my pension savings through varions occupational and personal pension schemes. As with Alan I see this as the most appropriate vehicle for planning for my retirement needs within the constrains of what's available, what tax incentives exist and my general attitude to risk/volatilty.


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## daltonr (24 Jul 2004)

*Beat The Street*



> Regualar non pension investments over the same period would presumably have provided similar levels of return (and possibly less once tax issues have been factored in)?



I don't know.  I remember being struck by a news item recently on the performance of pension funds over the past quarter or two.  I was driving so I couldn't take down the figures.

It said that the ISEQ had gained about 6% or 6.5% I think.  But the best performing pension over the same period was in or around 1% or 2%.

Does anyone else remember this?

Now I have to then ask the question, why didn't they just buy the index?   This is a question that a lot of people are asking about "Professional" traders in the US, the UK, and now here.

I can walk into a broker and buy a broad selection of shares and then leave them until I retire, and the probability based on past experience, is that I will beat a significant proportion of professionals.

To answer your "What's the Alternative" question, A Self Administered fund might be an alternative if you are a business owner.  

The problem with the current pension system and the reason it is hard to convince people to take them up, is they are confusing, and even if you understand how they work, you have very little idea of what you are invested in.  They are opaque.

People seem to be opting for buying houses as investments on the basis that these will be their pension. 

This has the double effect of concentrating a huge number of peoples retirement plans into the same asset class, while making houses too expensive for people who want to live in them NOW.

-Rd


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## Guest (24 Jul 2004)

*Beat The Street*

> and even if you understand how they work, you have very little idea of what you are invested in. They are opaque.

I don't think that's necessarily true. You pension statement should detail what funds your money is invested in and it is often possible to obtain more detailed information about the composition (e.g. specific share, bond, cash holdings and maybe even acquisitions/diposals) of these funds.


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## Alan Moore (26 Jul 2004)

*Quick point......*

Hi Daltonr

"Now I have to then ask the question, why didn't they just buy the index?"

The ISEQ is 100% equities. Most pension funds are a basket of asset classes. The bulk of pension funds tend to contain bonds/gilts/cash also makes them a more cautious animal than equity funds. So, you are not really comparing like with like. There are pension funds are are index trackers, if that is what you want.

However, there is another argument (that has been covered at length on AAM) that index trackers are superior to focused managed equity funds.


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## karljude (5 Aug 2004)

*Managing your own funds*

I can understand the author's frustration with the relative performance of most Irish pension mangers in the past. Many people still want the tax benefits of a pension but want to avoid the equity route and instead opt for a property based route, such as a syndicated property purchase. People tend to find this method of getting the 'best of both worlds', ie the pension tax relief and the access to property away from the turbulence of the equity markets.  Or as another alternative, a pension mortgage with the pension element invested into a secure fund.


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## rainyday (5 Aug 2004)

*Re: Managing your own funds*

I would question the wisdom of having your pension fund heavily invested in property, given that most people's other largest asset is their home (also property). This means that a huge proportion of your personal wealth is dependant on the property market. 

Having an equity-based pension fund gives you some diversification.


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## unregistered (15 Aug 2004)

*PENSION CONTRIBUTIONS ARE A WASTE. the alternative*

I think defined contribution type pensions are a waste of time.

Did you notice the pension brokers etc point out things like :
"Returns greater than deposit accounts cannot be guaranteed"
I think the only thing that guaranteed with these pensions is that the broker(s) make loads of money out of you.


Way back in 1998 I was 32 yrs old and decided I better start planning my future so when the company I was working for offered me to join their company pension scheme I decided to max my pension contributions according to my age.

5 and half years later the company wasn't  doing very well so I left the company. My new employer wasn't interested in paying into this company pension so I started up a prsa this year and I'm paying into that.

Recently I checked up on the status of the company pension and what I could do with it. 
SO I had a chat with the broker who originally setup the pension for me .
the total amount of money that I put in was €54605.
It was now worth €36,600.
Total charges was €19521.30
the broker gave himself a handy little commission of €7756.42 or 14% of what I put into the pension.

I think these charges are a total rip off especially when there was about 0% performance from the pension .

So I now reckon if I continue to make the max contributions for the rest of my working life the pension might not be worth anything when I retire so its just a waste of time.

So what's the alternative? 

I've come across other people who are in a similar situation. 
What people are starting to so is get a buy to let property using the equity of their home and rent it out.
I think there will always be a demand for rental property in cities around Ireland and there is the chance you'll have some income after paying tax man etc.
I think in hindsight I should have went off and bought a second property in 1998 instead of putting max contributions in a pension and be fleeced by pension charges.


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## Guest (15 Aug 2004)

*PENSION CONTRIBUTIONS ARE A WASTE. the alternative*

> Did you notice the pension brokers etc point out things like :
"Returns greater than deposit accounts cannot be guaranteed"

To be fair the standard illustration provided with any pension plan does point out that market performance cannot be predicted in advance and that there are no guarantees in terms of returns. As with any investment one needs to choose the risk/reward profile carefully so that it suits your needs. For anybody with more than a few years to go to retirement investing mainly or solely in equities (directly or indirectly) would generally be considered an appropriate strategy to provide for pension income.

> Total charges was €19521.30 the broker gave himself a handy little commission of €7756.42 or 14% of what I put into the pension. I think these charges are a total rip off especially when there was about 0% performance from the pension .

This simply serves to show how important it is to check (among other things) up front what the charging structure is on any pension scheme and that one should never depend on a broker other than an Authorised Advisor or perhaps a decent multi-agency intermediary for independent, objective advice. Did you do this when you took out this particular pension? 

> What people are starting to so is get a buy to let property using the equity of their home and rent it out.

In many cases this could be an even riskier strategy than investing (presumably in equities but also in bonds, with profits funds etc.) through a pension fund with a reasonable charging structure and with as much pension investment advice that the individual needs. This is because people who own their own principal private residence who then plough a significant proportion of their wealth into another (investment) property are concentrating much of their overall wealth into a single asset class and usually geographic region (e.g. Irish property). This is in contrast to what is generally considered a prudent approach of diversifying one's investments across different asset classes and risk/reward profiles.

In my opinion (no rocket science here) investing in equities through a suitable pension scheme with a reasonable charging structure is ONE element in a well diversified portfolio and the main one best geared towards pension savings (particularly given the tax advantages to high rate taxpayers). 

> I think in hindsight I should have went off and bought a second property in 1998 instead of putting max contributions in a pension and be fleeced by pension charges.

Hindsight is 20-20 vision. Past performance is no guide to future returns. It doesn't mean that property investment is the right thing to do no in all cases and instead of more conventional pension mechanisms.

Disclaimer: I do not work in finance in any capacity.


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## Moneybags (16 Aug 2004)

*Re: PENSION CONTRIBUTIONS ARE A WASTE. the alternative*

Members of occupational schemes have no control over charges. They're arranged by the trustees with the pensions broker. If the trustees are on the ball, you'll get low charges; if not, you'll get the type of situation described above.

Of course you could always opt out of a high charging occupational scheme and set up your own PRSA. The big drawback is that you'd also be walking away from the employer's contribution. And unless your PRSA contributions are made by payroll deduction, you'd also be walking away from the PRSI relief (PRSI relief is theoretically available for stand alone PRSAs but nobody seems to know how it works).

It can be difficult to work out the maths but my hunch is that the employer's contribution plus the PRSI relief should more than make up for the high changes on occupational schemes.


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## rainyday (16 Aug 2004)

*Re: PENSION CONTRIBUTIONS ARE A WASTE. the alternative*

Also, don't forget that members have some control over the trustees. As a first step, the members should certainly make their views about high charges known to the trustees and give the trustees a chance to respond/act. Members can also force an election of member reps as trustees if their is sufficient demand.


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## Guest (17 Aug 2004)

*Re: PENSION CONTRIBUTIONS ARE A WASTE. the alternative*

> And unless your PRSA contributions are made by payroll deduction, you'd also be walking away from the PRSI relief (PRSI relief is theoretically available for stand alone PRSAs but nobody seems to know how it works).

That's not true although Welfare still haven't sorted out their processes for dealing with this yet so there are delays until they do so. PRSI/health levy relief IS available on standalone (non payroll based) PRSA and other personal pension contributions:


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## skint (18 Aug 2004)

*avc rip off*

I totally agree with above i'm doing an avc scheme...the broker is ripping me off with charges and the pension company is also!
Its scandalous....basically legal robbery.
These people should be jailed.
A total ripoff.....alot people dont realise the charges until they are retired and the pension fund is worth very little.
Standard prsa only way to go!


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## rainyday (18 Aug 2004)

*Re: avc rip off*



> Standard prsa only way to go!


Hi Skint - The standard PRSA charges are quite high (5% entry fees if I recall correctly). You can get better value pension investments from Quinn Life or some of the nil-commission brokers.


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## Alan Moore (18 Aug 2004)

*A lot of whinging going on here......*

.... show me a superior mathematical model for saving for retirement.

All this ranting about jail and robbery? Can you show you were misled? Did you (or the trustees) not enquire about charges? If you are being "ripped off" are you (or the trustees) powerless to do anything about it?

"Standard prsa only way to go!"
Why? I have approx 50 clients with standard PRSAs but they are not the "only way to go" across the board.


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## Moneybags (18 Aug 2004)

*Re: A lot of whinging going on here......*

Hi Alan,

Brokers disclose the charges in occupational schemes as bald percentages, which are meaningless. 

For example the scheme to which I belong has a 97% allocation rate, 5% bid-offer spread and something like a €3 flat monthly charge. The annual management charge is 0.75%.

Is that good or bad? Because it's an occupational scheme, as opposed to a personal pension or PRSA, the broker doesn't have to quantify the effect of these charges on my pension. Neither does he have to disclose the reduction in yield. 

I suspect we are being ripped off but I don't know by how much.


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## Guest (18 Aug 2004)

*avc rip off*

> The standard PRSA charges are quite high (5% entry fees if I recall correctly). You can get better value pension investments from Quinn Life or some of the nil-commission brokers.

Standard PRSA charges are CAPPED at 5% of each contribution and 1% annual management charge. However it is possible to reduce this 5%/1% to 0%/1% in some cases by arranging the PRSA through a broker on a fixed fee (usually c. €100-€200) basis. It may also be possible to get a non PRSA personal pension plan with comparable charges. Charges are very important but don't lose sight of the other important criteria (e.g. advice - if required, selection of funds, flexibility etc.).

> Did you (or the trustees) not enquire about charges? If you are being "ripped off" are you (or the trustees) powerless to do anything about it?

Have to agree. More heat than light in a lot of the ranting above. In many cases people are "ripped off" because they don't bother to read the small print explaining the charges that apply. People who can't/won't do this for themselves should pay an INDEPENDENT advisor to do it for them rather than depending on the information provided by a salesperson or somebody else with a vested interest in selling the pension to them. Genuine cases of misselling should be pursued (e.g. with IFSRA) but blaming intermediaries for high charges which have bee explicitly agreed to or for poor market performance (which is under nobody's control) gets us nowhere.

I don't work in the industry by the way...

> Is that good or bad? Because it's an occupational scheme, as opposed to a personal pension or PRSA, the broker doesn't have to quantify the effect of these charges on my pension. Neither does he have to disclose the reduction in yield.

I thought that the whole purpose of the IIF or IFSRA or whatever compliant projections (with assumed growth rates of 6% or whatever) were to allow comparison of different pensions on a like for like basis in terms of charges? Or are you saying that these illustrations are not provided for occupational schemes (I thought that I received something like that when I was the member of various occupational schemes in the past)?


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## Alan Moore (18 Aug 2004)

*Meaningless?*

Hi Moneybags,

You are in an occupational pension scheme so the responsibility for the investment vehicle used lies with the trustees. You are telling me that you are not sure if they have done their homework or not because you are not assured that you are getting a good deal. Take up with the trustees. 

I can't tell you whether this is a good deal or not without knowing the structure and requirements of your company.

However you do know the exact charges so it's hardly meaningless.


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## Moneybags (18 Aug 2004)

*Re: avc rip off*

Occupational schemes still don't have the same disclosure rules as standalone pensions. When I joined I got a projection of expected benefits, the same as you'd get with a personal pension. 

But the projection was based on 9% annual growth, when the IIF projection rate was either 6%-8%. ASAIK the broker was entit;ed to project using whatever rate he thought appropriate. 

The effect of charges was not disclosed in the projection and no reduction in yield was provided. AFAIK there's no requirement to make these disclosures. 

I've developed a good working relationship with the broker over the years and I've no reason to assume he's pulling the wool over my eyes. He's given me everything I'm entitled to know. The trouble is when I add it all up I don't know where I stand.


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## Moneybags (18 Aug 2004)

*Re: avc rip off*

Hi Alan,

The scheme offers a wide range of investment alternatioves, so I've no quibble with that. It's up to me to choose the one that suits me best. Based on what I've learned on AAM I've chosen the lowest charging equity fund on offer on the basis that, with 25 years to go to retirement, I can afford the risk involved. 

I work for a private company and all the trustees are shareholders. They have a "take it or leave it" attitude to the pension and, given the balance of power within the company, this is something that employees have not been willing to challenge. 

I have considered putting myself forward as an employee trustee but have been advised against it. Many older members of the scheme have overblown expectations about their pensions and this is sure to turn ugly when the penny eventually drops. I wouldn't want to be a trustee when that happens.


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## Alan Moore (18 Aug 2004)

*We're gone.....*

..... a little off topic as I really wanted someone to demonstrate a better way of saving for retirement than a pension arrangement. The original accusation was that pension contributions are a waste.

Moneybags, unfortunately, it would appear that the employees have a communications difficulty with the trustees. That isn't going to be solved on AAM and will be difficult to resolve without member representation.


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## Moneybags (18 Aug 2004)

*Re: We're gone.....*

Hi Alan,

Point taken. However the original topic also referred to hidden charges. I'm saying it's not good enough to disclose charges as bald percentages. The disclosure is only meaningful when expressed in pounds, shillings and pence (or even euro and cents). 

Because of the tax breaks, there is no alternative to the conventional pension. But the tax breaks shouldn't be used as a smoke screen for rip off charges and commissions.


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## Guest (18 Aug 2004)

*Re: We're gone.....*

Totally agree with your last post. Does anybody know of a reduction in yield calculator (or something similar) into which you can punch the various charges (e.g. up front, per contribution, annual management charge etc.) and get a figure that can be compared on a like with like basis? Ideally this information should be provided up front but if it's not (at least for some or all occupational schemes) then is there any other easy way to get it?

Perhaps a complaint to the Pensions Board or IFSRA on the alleged lack of transparency on occupational scheme charging structures is merited?


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## fed up (18 Aug 2004)

*Re: We're gone.....*

Hi 
I heard before that the only way to get a picture of the actual charges and commissions of a pension  is to do the following

When the broker gives you projection figures for the pension they normally don't apply charges on these figures.

What you need to do is tell the borker you want to see the same projections (ie same growth rate etc)  however with all the charges and commissions applied.

When you get this you can actually start comparing the figures and then you get an idea of how much the pension is going to cost you.

Note also when dealing with a broker you have to use the word 'commission' instead of charges in order to find out how much he is charging.


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## Guest (18 Aug 2004)

*Re: We're gone.....*

> When the broker gives you projection figures for the pension they normally don't apply charges on these figures.

Are you sure about that? Other than the point raised by MoneyBags above about the alleged lack of transparency on occupational pension scheme charges I thought that all other (e.g. PRSA, personal pension, AVC etc.) illustrations were goverened by (IFSRA or IIF?) rules that govern detailed disclosure of charges and inclusion of the effects of these in any projections provided? I don't know the letter of the law on this stuff though...


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## Alan Moore (18 Aug 2004)

*Was the original topic about*

... about hidden charges. You know what the charges are on your scheme. You do have the ability to work out in pounds shillings and pence.

I personally would rather know the charges than the reduction in yield. Why? The RIY figure assumes you'll work in the same company and stay in the same pension scheme on the same charging structure until normal retirement date.
Now, Some schemes offer bonuses at  maturity or lower management charges after say 10 years. In todays mobile workforce these bonuses/reductions may not be relevant to me. 

P.S I would not expect you to find a reduction in yield calculator anywhere due to the multitude of pension charging structures that there are.


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## fed up (18 Aug 2004)

*Re: We're gone.....*

Hi ,

I got projected figures this year for my occupational pension scheme.
In very small print at bottom of page its says:
'Note charges are not applied to above amounts"

In all the projected figures I got over the years, it always said that at the bottom of the page for this occupational scheme .

Note I'm talking about an occupational scheme here.

PRSA's etc are a different ballgame altogether. In all PRSA statements/projections they are very upfront about the charges.


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## glasheen (31 Aug 2004)

*Re: PENSION CONTRIBUTIONS ARE A WASTE. the alternative*

No way are pension avc's a waste of time since Ch McCreevy changed the rules a couple of years ago.  Up to then, they were a waste of time and only provided expensive insurance (they did not create wealth). Now pension scheme allow you to create wealth very tax effectively.  As a person nearing retirement, I am looking forward to setting up ARF and controlling investment myself.  Pension money is the last money to be spent because it is growing tax free in the meantime.  If it is not spent in my lifetime it is inherited at a very benighn tax rate (23%??) and does not add to childrens gift tax threshold.
More and more people are setting up Self administered Pension funds (and the rules are becoming increasingly easier to do so) - this must be a threat to all the over paid fund managers.


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## happy (3 Sep 2004)

*retiring at 45*

Pensions are a waste of time , giving your hard earned money to someone else to play with in the name of professional investor , gamblers more like.

Not one sucker above has had the notion of investing in property , thats my pension , sell off one at a time i have a good deal of property which i will enjoy later in life, making money is easy and nothing has returned anything like bricks and mortar.


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## rainyday (3 Sep 2004)

*Re: retiring at 45*

Isn't hindsight great?


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## fj (7 Sep 2004)

*Pension Contributions are a waste of time*

If one's fund manager is performing so badly and his fees are so heavy, is it possible to switch one's fund to an alternative fund manager who has a better performance record and lower charges? 

Over five years I have invested €25,000 (including tax relief) into my fund. It is now worth less than €24,000. Yes, I have gained the tax relief, but I am still disappointed with the results. Are the prospects better for the future?


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## Yikes (7 Sep 2004)

*Pension*

I had a recent shock when an actuarial valuation was done on my company pension on exiting the company (defined benefit scheme) 

If I wanted to move my pension to a.n.other scheme I am told it will be only worth approx 40% of what it should be due to 9/11, the weather, or any other excuse! but what leaps out of the page is "underfunding by the employer".

Obviously I would be insane to move a currently  underfunded pension. How long do I have to decide if I move my pension or not and what can be done apart from trustee pressure on the company to bring the pension into line. Apparently according to the pension board a company scheme can continue to be underfunded as long as there is a enough money in the scheme to fund current pension recipients and an actuarial statement to the pension board shows that the pension is afloat.

That basically buggers a person like me that wants to move out of the scheme and locks me into it even tho' I am disallowed from contributing to it as I have left the employer.

Yikes!!!


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