# PRSA charges



## ATC110 (11 Nov 2019)

The current PRSA is 13 years old with a single payment made each year. It was taken out through a discount broker and the Annual Management Charge is 1%.

Does this represent good value? 
What are the lowest charges available for a PRSA for a self-employed person?
Is it worth opening a new PRSA for lower charges?
Is it worth / possible to transfer the balance from the preexisting PRSA to a new PRSA with lower charges?

Thanks in advance.


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## kevhenry (11 Nov 2019)

Value is subjective.

If charges are your primary concern then 1% is the maximum annual management charge that can be levied on a standard PRSA contract. If you got it through a discount broker then you may also have 100% investment allocation but you should double check that it applies to single premium contributions as well.

There are some other things to consider too;

The PRSA offerings provided by the insurance companies change regularly so it is worth reviewing your options.
Standard PRSA's are cheaper (max 1% amc) but tend to have a much narrower range of fund options than non-standard PRSA's. Over the long term it's performance that matters.
Non-standard PRSA's open up the unregulated investment providers like Wealth Options, ITC and Davy where you can take complete control of your portfolio.
Personal pensions can offer more flexibility in terms of charges and in the range of fund options available if you’re self employed.
You can freely transfer assets from one PRSA to another but you can't transfer a PRSA to a personal pension.
Kevin
www.thepensionstore.ie


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## Sarenco (11 Nov 2019)

@kevhenry 

Do you know of any providers that offer a standard PRSA with an effective allocation rate (net of any broker commissions) of 100% for a single premium in excess of €100k with an AMC of less than 1% and no policy fee?

I thought I read here previously that Standard Life had a PRSA offering with an AMC of 0.65% but I might be mistaken


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## ATC110 (11 Nov 2019)

Yes the allocation rate is 100%


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## kevhenry (11 Nov 2019)

@Sarenco

No, you're right.

Standard Life's AMC's range from 0.90% - 1.55% with allocation rates of 100%.

They do offer a 0.25% rebate on regular contribution PRSA contracts with an allocation rate of 95% which brings the AMC down to 0.65% with no policy fee.

For single premium contributions, there is also an available rebate option of 0.25% but it looks like that's only available with an allocation rate of 96.5% according to the comparison platform I use but external transfers over €100k would avail of the 0.25% rebate.

Kevin
www.thepensionstore.ie


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## Sarenco (11 Nov 2019)

Thanks.

A 0.35% annual saving is very significant in a low interest world.

Is the Standard Life offering still the cheapest PRSA out there?


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## kevhenry (11 Nov 2019)

Yes, it’s a significant saving as it’s the difference between paying €1,000 p.a. and €650 p.a. out of a €100k pot.

Obviously the AMC‘s effects would become more pronounced as your fund grows but it would be a good move as long as the cost of a lower allocation rate (if you’re getting 100% now) doesn’t drastically exceed the current €350 annual savings.

Zurich is available too at 0.75% but there’s 0.4% available on a non-standard PRSA through Wealth Options for those in the very nice position of having €1.5 million accumulated!

Kevin
www.thepensionstore.ie


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## Sarenco (12 Nov 2019)

kevhenry said:


> Obviously the AMC‘s effects would become more pronounced as your fund grows but it would be a good move as long as the cost of a lower allocation rate (if you’re getting 100% now) doesn’t drastically exceed the current €350 annual savings.


Apologies if I misunderstood your previous post but are you saying a net allocation of 100% wouldn't be available for that 0.65% AMC contract for a single premium of €100k+?


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## kevhenry (12 Nov 2019)

Sorry for the confusion in terminology,

The ’Single Premium’ charges I was referring to in the earlier post are those that are applied to a lump sum contribution going into to an existing PRSA, like those who are making their 2018 contributions at the moment.

If I understand you correctly, you are talking about transferring €100k from one PRSA into another PRSA?

A transfer value is different in that, albeit a ‘single’ premium, is a movement of monies into a PRSA and, as such, would move across and be applied 100% by law. The allocation rate I was referring to is on the future regular premiums.

Kevin
www.thepensionstore.ie


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## Sarenco (12 Nov 2019)

Many thanks for the clarification.

I see that Standard Life offer a range of Vanguard index funds, which I would suggest should suit most folk.


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## kevhenry (12 Nov 2019)

Agreed, Sarenco.

There are six available on their platform but they replicate the major indices and are enough to cover the needs of most people, as you say.

Kevin
www.thepensionstore.ie


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## Steven Barrett (13 Nov 2019)

Standard Life and New Ireland both offer 100% allocation, annual management fee of 0.75% for PRSA's over €100k. Standard Life offer the additional discount of 0.1% on its Vanguard range.


Steven
[broken link removed]


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## ATC110 (14 Nov 2019)

SBarrett said:


> Standard Life and New Ireland both offer 100% allocation, annual management fee of 0.75% for PRSA's over €100k. Standard Life offer the additional discount of 0.1% on its Vanguard range.



What is the best rate for a fund value under €100K?


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## ATC110 (14 Nov 2019)

kevhenry said:


> @Sarenco
> 
> They do offer a 0.25% rebate on regular contribution PRSA contracts with an allocation rate of 95% which brings the AMC down to 0.65% with no policy fee.



Is this not a poorer deal with only 95% allocation rate?


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## Sarenco (14 Nov 2019)

ATC110 said:


> What is the best rate for a fund value under €100K?


At 100% allocation?  I suspect you won't do much better than an AMC 0.9% on a PRSA.

But the brokers might know of a better deal...


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## Steven Barrett (15 Nov 2019)

Sarenco said:


> *But the brokers might know of a better deal...*




Stick it in a personal pension. The rates are much more competitive. 

PRSA's are very restrictive when it comes to charging as every individual contract has to be approved by the Pensions Authority, who also get a slice of the fee. 

Personal or executive contracts are set by the life companies and they have a range of contracts. Much more competitive and better fund choice too. 


Steven 
www.bluewaterfp.ie


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## Sarenco (15 Nov 2019)

SBarrett said:


> Stick it in a personal pension.


I don't think it's possible to transfer assets from a PRSA to a personal pension.


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## Steven Barrett (15 Nov 2019)

Sarenco said:


> I don't think it's possible to transfer assets from a PRSA to a personal pension.



No, it's not. 

But if you have "new money", I think a personal pension is better value


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## Sarenco (15 Nov 2019)

SBarrett said:


> No, it's not.
> 
> But if you have "new money", I think a personal pension is better value


No doubt but if the OP gets the PRSA balance up to €100k he can transfer to a lower AMC PRSA.  So it might make sense to keep going with the current product, at least until he hits the €100k mark.


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## Carnmore (25 Nov 2019)

....


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## ATC110 (25 Nov 2019)

Update: I contacted Zurich today and to open a PRSA directly with them would attract a 98% allocation rate and 1% AMC. I mentioned the 100% allocation rate and 0.75% AMC mentioned in other threads but they restated their charges as above. They didn't ask the transfer value or the amount of the annual single payment.


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## LDFerguson (25 Nov 2019)

ATC110 said:


> Update: I contacted Zurich today and to open a PRSA directly with them would attract a 98% allocation rate and 1% AMC. I mentioned the 100% allocation rate and 0.75% AMC mentioned in other threads but they restated their charges as above. They didn't ask the transfer value or the amount of the annual single payment.



The charges quoted in earlier posts are available from brokers, not directly from Zurich Life or the other pension companies mentioned.


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## ATC110 (26 Nov 2019)

LDFerguson said:


> The charges quoted in earlier posts are available from brokers, not directly from Zurich Life or the other pension companies mentioned.



In another post it was stated they were available by going direct Liam. For a PRSA fund value under 100k with a single variable annual payment being made, what would be the product with the lowest charges available?


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## LDFerguson (26 Nov 2019)

ATC110 said:


> In another post it was stated they were available by going direct Liam.



I'm not aware of that other post but I'm not aware of any of the PRSA companies offering a better deal to those who go direct than what is available from brokers.  Brokers bring the PRSA companies the vast majority of their business so the companies wouldn't want to undercut their largest suppliers.   



ATC110 said:


> For a PRSA fund value under 100k with a single variable annual payment being made, what would be the product with the lowest charges available?



Standard Life 100% allocation and 0.9% annual charge for Vanguard funds.

Regards, 

Liam
www.ferga.com


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## Sarenco (26 Nov 2019)

ATC110 said:


> For a PRSA fund value under 100k with a single variable annual payment being made, what would be the product with the lowest charges available?





Sarenco said:


> At 100% allocation?  I suspect you won't do much better than an AMC 0.9% on a PRSA.


Are you far off €100k in terms of the value of your PRSA?

Once you hit that €100k mark, you could transfer your PRSA to a substantially cheaper contract and then start a personal pension (with a lower AMC) for new contributions.


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## ATC110 (29 Nov 2019)

Sarenco said:


> Are you far off €100k in terms of the value of your PRSA?
> 
> Once you hit that €100k mark, you could transfer your PRSA to a substantially cheaper contract and then start a personal pension (with a lower AMC) for new contributions.


It's worth around €70K. That sounds like the best plan


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## FireDuck (12 Mar 2020)

Sarenco said:


> At 100% allocation?  I suspect you won't do much better than an AMC 0.9% on a PRSA.
> 
> But the brokers might know of a better deal...



What is the best rate for a fund value under €100K for an executive pension? (with 100% allocation).


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