# Should I start a labrokers PRSA before the deadline is up



## Kirian (1 Oct 2003)

I do not own a place to live.
I am being taxed at the lower rate (20%)
So I am saving to be able to buy a appartment/house in the future.
I am 26 years old.
So according to the guide (to savings and investments) I'm not a good candidite to start a pension scheme.

But what I want to know is weather it would be worth starting a PRSA with labrokers before the Jan 31st 2004 deadline. 

labrokers are offering: no entry charges, 0% on contributions and 1% fund charge. (most PRSAs i've seen have a 5% contribution charge)

I could put in the minimum amount required to open the PRSA with them and then when my financial situation changes later I could increase the contribution.

Should I worry about getting this good deal (i.e. no contribution charge) now or is it likely that there will be similar deals a few years down the road.


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## Bernard (1 Oct 2003)

*SSIA*

DO you have an SSIA?
Are you maximising input?

Go there first, otherwise hold off until home purchsased and furnished. 

Only my opinion.

Bernard


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## Kirian (1 Oct 2003)

*Re: SSIA*

I have no SSIA. I was out of Ireland for the last few years so I didn't get the chance to start one. Pity.


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## daltonr (1 Oct 2003)

*Re: SSIA*



> Should I worry about getting this good deal (i.e. no contribution charge) now or is it likely that there will be similar deals a few years down the road.



Kirian,

There's no real way of knowing the answer to that.

One school of thought is that with only the 1% annual fee these PRSAs are not profitable enough, so they might not be on offer for ever.

The other school of thought is that the existence of 0% contribution fees will put a squeeze on those charging 5% and they'll be forced to reduce their fees, so 0% offers will become more available not less.

Flip a coin!    

-Rd


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## Benny (2 Oct 2003)

*Bonkers*

daltonr,

It think it's bonkers to think that the financial services industry will reduce the entry cost on PRSAs from 5% to 0 just because a couple of brokers on the fringes of the industry are offering to set up a PRSA for 100 euros. 

I take my hat off to the individuals concerned, but I don't know how they are still in business.  

5% entry and 1% mgt. is a low cost, low margin charging regime.  It's just not living in the real world to think that there's the remotest possibility that the 5% entry cost will fall. 

Benny


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## Kirian (2 Oct 2003)

*re: Bonkers*

"5% entry and 1% mgt. is a low cost, low margin charging regime. "

The way I understand it, it's not a 5% entry charge but a 5% contribution charge. Thats 5% on every cent contributed for the entire lifetime of the PRSA.


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## Benny (2 Oct 2003)

*Re: Bonkers*

Kirian,

I would tend to use "entry charge" and "contribution charge" interchangeably.  Sorry if that wasn't clear.  

So to my mind, it's an entry charge on all contributions.  

Still counts as low-cost, low margin in my book. 

Benny


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## daltonr (6 Oct 2003)

*Low Cost*

Benny,

I won't re-ignite the "is 5% low cost?" debate.  You can read that on other threads.  I don't think it is low cost for the reasons I went into on the other threads.

As for whether the established players will drop their contribution fees, you may be right, they may not. 

But...  PRSA's are not like ordinary personal pensions.  Even if you set up with a 5% provider, you can switch, and what I said was, when word of this option gets out, as of course it will over time, then the 5% brigade may have to deal with it.

I don't know if I'm right.

-Rd


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