# Complete solutions PSRA



## pconsidine (22 Apr 2011)

I am 58 and self-employed. My only retirement provision is a modest public service pension from my time working for a semi-state.  Last year I had €18K and decided to invest this money in a pension fund that I could access at 60. I know nothing about private pensions so I went to my own Permanent TSB branch who put me in touch with their pensions advisor. I told the advisor that I wasn't interested in risky investments and my priority was maximum security for my money rather than the possibility of big returns. I told him that I intended to retire in three years time at age 60.
He told me he had a cash PRSA called Complete Solutions PRSA Options (Global Cash Fund Series E) which was suitable. I signed up.

I have just received my 1st half-yearly statement and I have that sick feeling which comes over you when you realise you have been conned.

The current value of my fund is €17,404. The fund performance is 0.2%. This represents about €30 on the approx. €17,500 Irish Life invested for me after taking their up-front initial charge. Now, the big problem is that I am now informed that Irish Life is charging an additional management fee of €170. In oither words, for an annual return of €60 per annum they are charging me €170!
Given the short 3 year life of this pension, and the initial fee, and the ongoing management fee, it is a racing certainty that my fund will be worth less than €18K when it matures - even if the performance of the fund-managers drastically improved. Putting it another way, not only is this pension not 'low-risk', it is 'certain-loss'. That's very high risk in ordinary language. I have been told that the sort of return that would see me merely realize my investment (i.e. zero return) is highly unlikely with the returns historically produced by these sort of cash funds. Is this correct.

Is this sort of "advice" common in the pensions industry?I sell goods that must be fit for purpose or I get sued. Is Irish Life subject to the Sale of Goods and Supply of Services legislation? Is the Ombudsman an effective remedy for my problem?

Have I any comeback or good options? Please advise.

Many thanks, P Considine


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## pconsidine (29 Apr 2011)

*Still waiting for advice*

Is there anyone out there who can answer my query?

I would very much like to know what options exist for me - or what remedies I might have.

P Considine.


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## Baracuda (2 May 2011)

Hi P

Firstly was it PTSB or Irish Life that sold you the PRSA, I suspect that it was PTSB that sold it and that Irish Life is the provider or wholesaler in which case your complaint is with PTSB. 

I assume that you were told what the charges were before you signed up and that you got a copy of the documentation as well which would clearly state what the charges were so if this is the case you don't have any right to complain. Think of it another way; you sell a flat pack table today and the customer comes back to you next week and demands a full refund saying that the table fell apart and "is not fit for purpose", on further inspection you notice that the customer never used glue to hold the table together and you say to the customer "did you not read the instructions?" and the customer says "no I didn't bother as yer man on the till didn't tell me to use glue, anyway there was no glue supplied in the pack" Would you give him refund, I don't think so! 

Now lets take a look at it from a different perspective leaving out who the shopkeeper (PTSB) and wholesaler(Irish Life). 
You made an appointment with an advisor who would have spent many years studying to become a financial advisor and also partakes in mandatory annual training. He/She would have completed a pension's review with you and then based on his/her experiance recommended and advised you to take out a PRSA based on the information and objectives that you provided, they sent you a copy of all the information collected, He/She completed all the relavant paperwork on your behalf and submitted this to the pensions provider who in turn processed your pension and sent you your policy documents. This costs money as I am sure you can appricate, the shopkeeper and wholesaler has over heads he/she has to pay thier employee's as well as rent, heat, electric, rates, insurance etc etc. On top of this the shopkeeper/wholesaler has to write to you every 6 months to keep you up to date with your PRSA and would most lightly be prepared to sit down with you at least once a year for an hour and listen to you and answer any questions or concerns that you may have as well as advising you on the best course of action for the following 12 months. While I appricate that the cash fund performance is anything but good it is only supposed to be used as a holding account.

After all that if you feel that you have a genuine griveance with PTSB, you would need to sit down and write a complaint letter to the branch before you can esclate your complaint to the FSO. 

I would say based on my overheads alone that the shopkeeper would struggle to break even on your pension as it is only going to be inforce for 3 years while most pensions would have a life span of 15 years at least.

P.S. don't have any connection to the PTSB just in case it comes accross that way.


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## StevieC (5 May 2011)

When sold the product, you should have received a quotation that would have had a table on it with an expected maturity value.

Based on the information you provided, it seems unlikely that the maturity value quoted would have been what you put into the fund.

However, if the quote was done assuming say a 4% growth rate which many cash quotes are done on then I believe there is an element of bad advice being given, given that the ECB rate is currently 1.25% and was 1% a year ago. The maturity value on the quote it could be argued was misleading to the layman.

On the other hand, it may also have been pointed out to you that you are entitled to take 25% of your fund tax free at retirement. Assuming you claimed tax relief, even with a bad return on the fund, you were most likely better off investing the money in a pension rather than paying tax on the full amount. Effectively the charges you have paid is the cost of doing business to get the tax free lump sum.

If you feel the quotes at the time of selling were misleading with little hope of being achieved then there could be grounds for a complaint, in the first instance to PTSB and then to the Pensions Ombudsman if you receive no joy.

While of little use to you now, your problem demonstrates very clearly why people should purchase pension/insurance products from reputable independent financial advisors and not directly from a Banking institutions who are only interested in selling you their product.  


www.CheaperLifeAssurance.ie


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