# Employer wants to change employees from PRSA to DC scheme



## colin79ie (2 Nov 2011)

Hi,

I know very little about pensions  and so would like an opinion expressed.

Basically, my employer pays 5% of my salary into a PRSA and I pay 3.5%.

Received a letter saying they now want to change from the PRSA into an Occupational defined contribution scheme. due to changes in tax rules in 2011 etc.

A few years ago, they told us we should change to the PRSA as it was they way to go...

Having lost a load of money changing over to the PRSA at that time I am concerned the same might happen again.

AFAIK it's with the same company as the PRSA with the same charging structure etc.

The last line of the letter says 'take advantage of the solutions offered by *****h L***, i.e. a Group defined Contribution plan, which allows a switch from your PRSA with little disruption'.

My question is, should there be questions I need to put forward. Is there anyhting obvious they are not telling me?


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## flossie (4 Nov 2011)

Hi Colin,

I have recently moved from a PRSA to an occupational DC scheme. I did this as it apparently allows for better efficiency on tax. I had to hassle my company to do this for me (I am the only emplyee in my company in Ireland on a personal pension schemen due to changes in legislation about defined benefit schemes ) but it transitioned through last month OK. I am in the process of changing my investments, but I have not noticed anything different so far.

There are a few posts out there which discuss the benefits of PRSA vs DC schemes. I know Baracuda has spent an awful lot of time discussing the topic and has provided some invaluable information. Worth doing a search for....


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## LDFerguson (5 Nov 2011)

There are some very real benefits to changing from a PRSA to a DC scheme.  Employer contributions to a PRSA are subject to the USC while Employer contributions to a DC scheme are not.  (The Government and Revenue are aware of this anomaly and it may or may not be fixed in the near future, possibly in the next Budget next month.)

You should find out the charging structure on your PRSA.  It will be some percentage (between 0 - 5%) on every contribution plus another percentage (often 1%) per year on the fund.  

Make sure that the charges on the DC scheme are no different - certainly not worse and that 100% of your PRSA fund will be transferred over to the DC scheme without any deduction.  

Liam D. Ferguson


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## LDFerguson (5 Nov 2011)

colin79ie said:


> A few years ago, they told us we should change to the PRSA as it was they way to go...
> 
> Having lost a load of money changing over to the PRSA at that time I am concerned the same might happen again.


 
I'm surprised by this, as any transfers into a PRSA must be done at 100%, i.e. 100% of the transferred fund must be invested in the PRSA without deduction.  

Was there some penalty on transferring out of the previous fund?


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