# Zurich PRSA /AVC advice please!!



## deco87 (19 Mar 2019)

I have a Zurich Pension PRSA. I have made no contributions for a year or so.
I had been advised incorrectly about it at its inception 15 years ago.

Anyway , its 15 years and ends june 2019. I am Public servant. 54, 55 june.
I can work till 60. Hope to retire in next 18 months.

I am after getting a bit of shock today looking at the "Current Fund Value".

So one month ago the value was "27.964". I got a letter today from Zurich 
showing "Current Fund Value"  now is 25.961!!! So 2000 euro less than a month ago.

This is the first time since I got it that the current fund value has decreased. 

I find it rather strange such a large decrease in value over a month so near end date. Purely coincidental , no doubt.

I just put phone down there now , and the girl checked the current fund value and from last week she now says its current fund value is .28.180!!  
Queried this , I am told that its all down fluctuations!!anyway it seems there is a 1-7 risk fund level. So i enquired what my policy is at , Im told  its Level 5.

I am advised and it makes sense , to get financial advice , its neither here or there now as they say but getting financial advice from the guy that recommended the policy is a non runner.
I can pay a few hundred i suppose to get advice , but , i think from what I can glean , this policy will stay "invested" until I retire, I am now very concerned that I will lose a lot of this after 15 years of saving , which would be a pity. It's not a huge amount but to me in my present circumstances it is.

I believe that I can reduce the level of risk , I think "1" is lowest and 5 highest.
Nothing can be done I asked , if I could "lock in" the 28 180 to keep it there till I can access it  this was not possible.
I would presume any financial adviser would say , reduce the risk level to minimum and hope for the best.  I wonder is it worth the investment to get this advice , I think , not.

I know when I retire I can access this lump in line with revenue limits /gratuity from job etc ,
and it then transfers to an "ARF" monthly , again depending if working , and applicable tax rate , determining the amount. 

Can I ask is it fairly straightforward as outlined? Is a financial advisor going to advise anything different? You cant "do" anything with these type of policies to my advantage , I understand as revenue rules are fairly tight.

Anyway thanks , in advance.

Deco


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## Allpartied (19 Mar 2019)

Most investment companies have a cash option, they still charge you the management fee, so you would lose a small amount. It would protect  99% of your investment against any equity market collapse over the next 18 months. I presume that is No 1, on their list.  However, while you will not suffer any catastrophic losses should the market crash, you will not get any benefit from any rises in the equity markets.


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## deco87 (20 Mar 2019)

ok , I dont think is any cash option as regards PRSA /AVC for public /civil servants. 
Other than revenue rules which are tight , and as i say in accordance with appropriate relevant regs  
But thks.
I think just drop to minimum return less risk is only option , any views appreciated 

Deco


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## MugsGame (20 Mar 2019)

<deleted>


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## Lisboa (21 Mar 2019)

Level 5 risk is generally for long-term growth, people who are more than 7 years away from retirement. 
If you're retiring in 18 months and wish to reduce risk level to a minimum, it should be as straightforward as asking Zurich for a list of their portfolio funds/ investment options and being able to flex up or down as you choose; the very lowest risk will likely be a 'cash portfolio' option at level 1 which may also have the lowest total expense ratio (fees to manage your fund), but if cash isn't an option as you say, there may also be low risk level 'stability' or 'conservative' options.


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## deco87 (21 Mar 2019)

Ok thank you. This is a separate avc prsa , that public servants can have in addition to the,  pension/ gratuity that you have paid into over decades. 
It payout as regards cash/arf is dictated by superannuation limits etc ...I'm just trying to hold it at its max. 28 k ish. Thanks for reply


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## Steven Barrett (22 Mar 2019)

deco87 said:


> This is the first time since I got it that the current fund value has decreased.



First time you noticed you mean. The Prisma 5 fell by -20% from April 2015 - February 2016

Zurich's cash fund is called the Secure Fund. If you don't want any volatility, stick it in there. You will have to pay the 1% management fee and get a 0% return, so your fund will fall by the charge amount but there is no market volatility. If you want more of a return than that, you have to take an element of investment risk. Investments can't just go up in value all the time. Just like you can't expect calm seas or sunny weather all the time. If there's ups in the markets, there has to be downs too. 

Steven
www.bluewaterfp.ie


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## deco87 (23 Mar 2019)

What's one percent management fee , on 28.grand roughly , just to know when I ask as you suggest thks


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## MeathCommute (23 Mar 2019)

deco87 said:


> What's one percent management fee , on 28.grand roughly , just to know when I ask as you suggest thks



€280


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## deco87 (24 Mar 2019)

Very interesting replies , Glad i didn't invest anymore than I did  into PRSA/AVC !! Also that I stopped paying in 3 years ago!!
It now seems that I am in Zurich , Balance Funds , which has a risk rating of 5/7.
(I have received some basic information from the person who advised me on this 15 years ago as regards whats available)

From a risk perspective I can ask Zurich to change me to 1. Cash Fund (1/7) , 2. SuperCAPP fund(2/7) 3. Prisma Fund (2/7).

On looking at their brochures , all these if they carry less risk (which I want) the returns , in the case of Cash Fund  , is negative 
over the last number of years!!  Added to that , I see its 280 euro  management fee approximate, if it 1%. Its a disaster!!!

If anyone has a view on this , what I intend to do , please feel free to add!!

Ask Zurich to switch the current fund value to "CASH FUND" risk (1/7) then watch over the next couple of years the policy retuen
negatively , add on the management fund fee, and drip away .....albeit very slowly ......

Thks a lot 
Deco




I


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## deco87 (24 Mar 2019)

absolutely 100% spot on reply , thanks , great to get appropriate , relevant factual reply . thks

and to all other contributors


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## deco87 (27 Mar 2019)

SBarrett said:


> First time you noticed you mean. The Prisma 5 fell by -20% from April 2015 - February 2016
> 
> Zurich's cash fund is called the Secure Fund. If you don't want any volatility, stick it in there. You will have to pay the 1% management fee and get a 0% return, so your fund will fall by the charge amount but there is no market volatility. If you want more of a return than that, you have to take an element of investment risk. Investments can't just go up in value all the time. Just like you can't expect calm seas or sunny weather all the time. If there's ups in the markets, there has to be downs too.
> 
> ...




I cant find any open  fund called a *secure fund* , on any of Zurich brochures. There is one called the *cash fund*. This is risk assessed as 1/7. It has management charge 1 percent , negative returns last 8 years. I was about to change to that , I will hold on to see about the , secure fund , you mention , would you happen to have a link ?
Thank you


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## Smoneen (27 Mar 2019)

The secure fund is closed to new business I.e you can’t switch into it. The cash fund or the deposit plus fund are the only cash/deposit type funds available.


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## Steven Barrett (27 Mar 2019)

Smoneen said:


> The secure fund is closed to new business I.e you can’t switch into it. The cash fund or the deposit plus fund are the only cash/deposit type funds available.



Goes to show how long ago I placed a clients money in it! Thanks for the update




deco87 said:


> I cant find any open  fund called a *secure fund* , on any of Zurich brochures. There is one called the *cash fund*. This is risk assessed as 1/7. It has management charge 1 percent , *negative returns last 8 years.* I was about to change to that , I will hold on to see about the , secure fund , you mention , would you happen to have a link ?
> Thank you



That's because there is no return on deposits and the ECB rate is negative. They can't make a return where there is none to be had. But if there is a stock market crash, you will just lose the -0.8%. 


Steven
www.bluewaterfp.ie


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## deco87 (28 Mar 2019)

SBarrett said:


> Goes to show how long ago I placed a clients money in it! Thanks for the update
> 
> 
> 
> ...


Ok that explains that , thank you. I switched , so its dripping management fee /and the  Neg ...return as you say annually from now on /until I retire , its the best that can be done. Thanks for all your help and advice.


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## deco87 (3 Apr 2019)

Just a quick update. Switched to CASH FUND. I attach partial part of letter re same.

It was always going to come into effect when I retired from Civil Service , subject to superannuation limits etc re state pension
I would get a lump sum (partial) and then it goes to an ARF , monthly.     Please see (attachment) as a result of.......request.....
cant quite understand this , have I further eroded the policy by switching?

As it now stands , I lose 1 % commission each year until I retire for investment fees which has returned negatively for the last 8 years
added to that , the negative return , now this as well!!!

Any thoughts , most welcome !! Deco


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## Steven Barrett (12 Apr 2019)

Check with Zurich that all future contributions are also going into the cash fund. 

When you send a request to a life company to switch funds, in their mind, it's all existing funds but all future contributions still go into the original fund ie. PRSA Default ARF Strategy. 

Not sure where the 1% commission is coming from? There is a 1% management charge on your policy. This pays for Zurich to administer your policy, carry out the fund switches, send confirmation of such, reporting to the pensions authority, central bank etc. It has nothing to do with the funds you are invested in. 


Steven
www.bluewaterfp.ie


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## Allpartied (16 Apr 2019)

Hi Deco87,  I'm afraid that is the best you can get if you want zero risk.  As you say you still lose 1%, which depending on the total amount in the fund can be quite a sum each year. So, it's not zero risk at all, as you have to pay for the "admin costs". 
I've been banging on for a while that there should be a no cost, state run pension fund available to savers who want a zero risk fund. The administration costs of something like the Prize Bonds account must be similar to the Cash pension funds, but they are free, as are all the other Govt saving schemes. 
Anyway, it doesn't look like it will happen, probably because it would be hugely popular and the finance industry would go ballistic.


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## Steven Barrett (16 Apr 2019)

Allpartied said:


> Hi Deco87,  I'm afraid that is the best you can get if you want zero risk.  As you say you still lose 1%, which depending on the total amount in the fund can be quite a sum each year. So, it's not zero risk at all, as you have to pay for the "admin costs".
> I've been banging on for a while that there should be a no cost, state run pension fund available to savers who want a zero risk fund. *The administration costs of something like the Prize Bonds account must be similar to the Cash pension funds, but they are free, as are all the other Govt saving schemes. *
> Anyway, it doesn't look like it will happen, probably because it would be hugely popular and the finance industry would go ballistic.



Except that's not true


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## Allpartied (17 Apr 2019)

SBarrett said:


> Except that's not true



If you open a cash fund with Zurich, they basically open an AIB Deposit Account for you.  They send you a bill once a year for hundreds (maybe thousands of Euros).  It's a scam, pure and simple. 
A cash pension fund is a simple savings scheme, it is not a complex financial instrument. The Govt could easily open a product, similar to the State savings scheme to allow people to avail of the tax relief and build a secure fund.  This would be particularly useful to people who are turbo charging their pension with final year payments, maximising the allowable contributions.   They, generally, have no desire for risk, but will do very well from the tax relief, especially if they are 40% payers. 
Once individuals reach pensionable age and have a sizable fund then there may well be value to be had from paying a professional financial advisor to organise the best pension arrangements.  But the saving bit, that's just  money for old rope.


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## Steven Barrett (17 Apr 2019)

Allpartied said:


> If you open a cash fund with Zurich, they basically open an AIB Deposit Account for you.  They send you a bill once a year for hundreds (maybe thousands of Euros).  *It's a scam, pure and simple. *
> A cash pension fund is a simple savings scheme, it is not a complex financial instrument. The Govt could easily open a product, similar to the State savings scheme to allow people to avail of the tax relief and build a secure fund.  This would be particularly useful to people who are turbo charging their pension with final year payments, maximising the allowable contributions.   They, generally, have no desire for risk, but will do very well from the tax relief, especially if they are 40% payers.
> Once individuals reach pensionable age and have a sizable fund then there may well be value to be had from paying a professional financial advisor to organise the best pension arrangements.  But the saving bit, that's just  money for old rope.



How it is a scam?


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## Allpartied (17 Apr 2019)

SBarrett said:


> How it is a scam?


 
A scam is when a product is sold as something valuable when it is actually not that valuable. Usually the scammer uses lots of fancy jargon, or deceptive advertising to present his product as somehow magical, or unique. 
So opening a deposit account is not difficult, it doesn't cost anything.  I can do it, it doesn't require any special skills. 
How does a company justify charging thousands of euros for doing that?


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## RedOnion (17 Apr 2019)

SBarrett said:


> How it is a scam?


You don't remember this thread?

https://www.askaboutmoney.com/threa...k-about-retirement.210617/page-8#post-1594385


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## Allpartied (17 Apr 2019)

RedOnion said:


> You don't remember this thread?
> 
> https://www.askaboutmoney.com/threa...k-about-retirement.210617/page-8#post-1594385



Yes, it is a bug bear of mine and it seems unlikely to change, so probably best to just suck it up for the good of my blood pressure. 

I've no doubt the financial institutions do some work for the money, but High Street banks also do a fair bit of work for looking after savings.  They have to report, licence, conform to all sorts of complex rules/regulations, deduct taxes,  but they don't charge money for savings accounts, well not yet, at least.


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## RedOnion (17 Apr 2019)

Allpartied said:


> but they don't charge money for savings accounts, well not yet, at least.


Of course they do. Just you don't see it.
In a 'normal' interest rate environment, retail deposit rates available from banks are less than what can be achieved through money market funds that a pension would be investing in. Just in the current interest rate environment they can't do that.


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## Steven Barrett (17 Apr 2019)

Allpartied said:


> If you open a cash fund with Zurich, they basically open an AIB Deposit Account for you.  They send you a bill once a year for hundreds (maybe thousands of Euros).  It's a scam, pure and simple.
> A cash pension fund is a simple savings scheme, it is not a complex financial instrument. The Govt could easily open a product, similar to the State savings scheme to allow people to avail of the tax relief and build a secure fund.  This would be particularly useful to people who are turbo charging their pension with final year payments, maximising the allowable contributions.   They, generally, have no desire for risk, but will do very well from the tax relief, especially if they are 40% payers.
> Once individuals reach pensionable age and have a sizable fund then there may well be value to be had from paying a professional financial advisor to organise the best pension arrangements.  But the saving bit, that's just  money for old rope.



What costs do an insurance company have in managing any money? Remember, they don't lend out any deposits to other policy holders. They have to pay their staff, building costs, regulatory costs, insurances and some money for profit. If they don't charge anything, why would they accept any money in a cash fund? 

Steven
www.bluewaterfp.ie


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## deco87 (24 Apr 2019)

I agree completely, complete scam . It's very wrong. Unfortunately  at the start the advisor was poor also . 
Lesson learnt albeit too late  
Thks  for reply


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