# Directors Pension - How to set up?



## minion (18 Sep 2005)

I've been reading posts on AAM for about a year now.  And after much frustration have decided to ask for somne advice.
I am a director of a ltd company with myself as the only employee.
I have no pension plan and want to set one up as soon as possible.
I have seen the same question posted here many times but noone has given a clear answer.
Most of them say to go to independant advisors etc.
I have spoken to a couple of advisors and it seems the cost of setting up a pension will be €5000 including their fee which is rediculous.

All i (and the many others who have posted the same question i'm sure) am looking for is some advice on which company has the best value directors pension.

In contacted Quinn life and asked them to send me out info about a directors pension and what i got was a presentaion about setting up a company plan for my employees, so back to square one again.

So any help much appreciated


----------



## LDFerguson (19 Sep 2005)

No one pension provider offers the best value directors' pension.  The best value directors' pension is the one that provides you with the biggest fund at retirement for the amount of money you've invested.  This will be determined by product charges and future investment returns.  The product charges are easy to quantify.  But nobody can tell you which pension fund will provide the highest returns in the future.

If you simply want to choose a pension provider on the basis of lowest product charges, that's possible.  But you need to satisfy yourself that their choice of investment funds is suitable to your needs, investment aims, attitude to risk etc.  

€5,000 does seem like a lot to set up a directors pension scheme for one person.  

Liam D Ferguson
www.prsacentre.com


----------



## bocade (19 Sep 2005)

A Directors Pension is just a jazzed up name for an occupational pension scheme.  The Directors option to chose ARF's at retirement is allowed under any occupational pension scheme so long as the Director qualifies as a proprietary director.  The Director must be an employee of the company to qualify.


----------



## minion (19 Sep 2005)

I've been reading good things about Quinn-Life.  I'm looking for one where i can contribute lump ums at the end of the year as opposed to monthly installments.


----------



## bocade (21 Sep 2005)

My Director's Pension (or Executive Pension as they call it) is with Quinn Life and last two lump sums invetsments are showing very good returns, last years is up 22%.  You do not need to have monthly contributions.


----------



## Marianne (21 Sep 2005)

Quinn Life offer competitively-priced pension contracts.  They don't pay commission to brokers.  They're not the lowest-charging provider in all circumstances, however.  Some of the other pension providers' nil commission plans have lower charges than QL but you'd have to pay a broker a fee to set one up on such terms.  

Their funds are index-tracking only - they track the performance of certain market indices.  There's lots of debates about whether or not you're better off with an active fund manager, who will try to beat the index, or an index-tracker.  In the US, index-trackers have an edge because they offer lower charges than actively-managed funds.  Over here, you'll pay the same charges for index-tracking as for actively-managed.  Go figure.  



> My Director's Pension (or Executive Pension as they call it) is with Quinn Life and last two lump sums invetsments are showing very good returns, last years is up 22%. You do not need to have monthly contributions.


 
This is impressive but arguably irrelevant, as past performance is not a guide to future returns.  The average Irish Group Managed Pension fund achieved 18.6% in the one year period to 31/8/2005.
M


----------



## wowser (22 Sep 2005)

I also have a Quinn Life Executive Pension and I can pay lump sums into it whenever it suits. 
One minor gripe - I recently got a letter looking for a Pensions Board Fee (€10). For some reason they've decided to charge this separately rather than take it out of the fund as was the case before. More hassle than anything else...


----------



## bocade (22 Sep 2005)

I like that they charge pension board fee (€9.50) seperately.  It is not a quinn life fee but rather a third party fee and I'd perfer to have my pension fund "clean" of any charges other that the 1% fee.  It makes it easier check actual performance and its also good to be able to keep a record of units without having to account for minor adjustments for this fee.  It keeps the whole thing more transparent.  I am sure ifr you asked them (gave authorisation) they would just charge the fee to your fund if you found that more convenient. I have always found quinn life to be more user friendly with requests like that compared to the bigger companies.


----------



## wowser (27 Sep 2005)

Well they asked me for the first time this year so I assume previously it was part of the 1% fee and now it's extra?  My main objection is that if I quit contracting and fold my company I'd have no way of paying it in future years


----------



## bocade (27 Sep 2005)

No, the pension board fee is not part of the 1% and never was. The 1% is calculated proportionally on a daily basis based on the fund value on the day and is incorporated in the unit price. The documentation sent out with the Executive Pension clearly states the pension board fee is extra. If it was previously charged to your fund, you would see it as a seperate item on the benefit statement. The Pensions Board charge is based on schemes in existence on a certain date in the year, I wasn't charged in first year of my pension being set up. It maybe yours is similiar.


----------



## WizardDr (29 Sep 2005)

As a proprietary director, would you not be better with a 'Self directed Trust'?


----------



## bocade (30 Sep 2005)

There are a number of key difference between the Quinn Life type Executive Pension and a self-directed trust.  When I last lookedt self-directed truct the set-up costs were iro €2,000 (2 yrs ago) It is not cost efficient to invest a relative small amount.  I am building up pension contributions to the €50k+ level (over a number of years in my case) and will then reconsider this option.  Additionally a self-direct trust literally means that you decide what shares/property to invest in and you actively manage the portfolio.  Quinn Life funds are quite different in that they are passively managed index tracking funds.  In other words, you are getting a diversified portfolio of equity (providing you don't put all into the Celtic fund) that is tracking the market at a lowish charge.  No worries about picking what shares to invest in.


----------



## wowser (30 Sep 2005)

*Re: pension board fee*

That makes sense alright - since I didn't get anything in the first year I assumed it was something new.  Thanks!


----------

