# Standard PRSA AVC with Zurich?



## Aodhán (6 Jul 2016)

Is this a good AVC to move to? What are its pluses and minuses? I'm currently with the ASTI/Cornmarket/Irish Life AVC but I've been told that the above AVC would be significantly better in terms of market return and the annual charges. 

I find the whole AVC thing a maze, and I'm particularly concerned about how much the money I'm paying in will really be worth with inflation in 25 years time when I go to draw it down? Would the gain in getting my tax back now be lost in the reduced value of the AVC via inflation?

I've already paid somebody for financial advice. I'm quite content with my salary protection, life assurance etc, but I'm unsure about the AVC. I'd appreciate all feedback on this AVC. (my option was this or buying back Notional Service, but if I left before 65, as I expect to do, I would apparently be severely penalised by the NS scheme which doesn't have much flexibility.)

Thanks.


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## Steven Barrett (7 Jul 2016)

The management charge of 1% is probably the same for both. What is the contribution charge i.e. how much of your money is actually invested. The biggest charge that can be taken is 5%.

As for funds, what fund are you invested in and what Zurich Life fund are you comparing it to?


Steven
www.bluewaterfp.ie


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## Alan Considine (13 Jul 2016)

The returns are probably better do you know what fund you are currently invested in?


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## Gordon Gekko (13 Jul 2016)

There's also the issue of the Cornmarket one being facilitated through payroll. My understanding is that with a Zurich Life one, you have to claim the tax relief yourself.


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## Aodhán (15 Jul 2016)

Hi, Thanks very much for the replies. They're greatly appreciated. I dug up my current AVC details from an Irish Life letter. 100% of them go in a fund named "Cornmarket Balanced 50 Strategy 8 years" (if that makes sense to anybody!).

I'm contributing 4.12% of my "actual salary" into that AVC. I'm 43 now, so will be paying into them for, say, 20 years more. I know that the Cornmarket one being taken directly from my teacher's salary is very convenient and I'll miss that but if the difference is worth it I'll change and claim the tax back on PAYE Anytime. I'm just not sure if the proposed one I'm changing to is better than this Cornmarket one?


More generally, another issue is that according to the "Your Statement of Reasonable Projection" on this Irish Life statement, my "Projected AVC Investment Account value at retirement age [65]" is *€84,981.00*, but underneath it says in smaller print "Allowing for the impact of an inflation rate of 3% per annum in the future, this would be worth *€42,847.00* in today's prices". That seems shockingly low, as if all my tax refunds from doing an AVC are wiped out by inflation. Am I doing it all wrong by putting money in an AVC so "early" before retirement? What smarter options do I have? Thanks for all views.


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## Aodhán (15 Jul 2016)

SBarrett said:


> The management charge of 1% is probably the same for both. What is the contribution charge i.e. how much of your money is actually invested. The biggest charge that can be taken is 5%.
> 
> As for funds, what fund are you invested in and what Zurich Life fund are you comparing it to?



Hi, The only details of the fund that he's proposing to move me to are "Standard PRSA AVC with Zurich."  He ads "In relation to the existing amount in Irish Life 100% of your money will transfer and incur an ongoing charge of 0.75% a year.... On this 96.%5 of each contribution is invested and carries and ongoing charge of 1% a year."

That's all I know about the proposed alternative.


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## Aodhán (19 Jul 2016)

Anybody?


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## GSheehy (25 Jul 2016)

Gordon Gekko said:


> There's also the issue of the Cornmarket one being facilitated through payroll. My understanding is that with a Zurich Life one, you have to claim the tax relief yourself.



The department that Aodhán works for could have a PRSA 'Letter of Appointment' set up with Zurich Life. If there is, then there's no issue with doing it through salary deduction. If there isn't, then he could ask them to set one up.

There's no obligation on the employer/department to do this (because there's a facility in place already) but; if there are significant cost savings to be made in terms of AMC & contribution charge for the member then, I think, they'd have difficulty in denying access. I've seen it done a good few times.


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## Steven Barrett (28 Jul 2016)

Aodhán said:


> Hi, The only details of the fund that he's proposing to move me to are "Standard PRSA AVC with Zurich."  He ads "In relation to the existing amount in Irish Life 100% of your money will transfer and incur an ongoing charge of 0.75% a year.... On this 96.%5 of each contribution is invested and carries and ongoing charge of 1% a year."
> 
> That's all I know about the proposed alternative.



Hi Aodhán

I was on holidays for the last few weeks 

I am not sure where the 2 different ongoing charges are coming from. Is he setting up two different policies, one for the money being transferred across and the other for the monthly premium? 

The 100% of the money being transferred, that is set down in legislation. 

The 96.5% allocation means that €3.50 of every €100 will be deducted to pay for the advisor set up fee. If you want to have 100% invested, you will have to pay a fee for the advice instead. If he's a tied agent, I don't think they can charge fees for their work. The 1% management fee is the standard PRSA charge. 


Steven 
www.bluewaterfp.ie


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## Aodhán (2 Aug 2016)

Thanks, Steven. I'll make sure to ask him about those two ongoing charges. I did actually pay him for financial advice and the advice was to change from my existing AVC with Cornmarket/Irish Life. Would it be normal in this case to not have to pay a set-up fee on top of it? Also, is that 3.5% "advisor set-up fee" a once-off from the first payment into the new AVC or will it come out of each payment in the future?


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## Aodhán (2 Aug 2016)

GSheehy said:


> The department that Aodhán works for could have a PRSA 'Letter of Appointment' set up with Zurich Life. If there is, then there's no issue with doing it through salary deduction. If there isn't, then he could ask them to set one up.
> 
> There's no obligation on the employer/department to do this (because there's a facility in place already) but; if there are significant cost savings to be made in terms of AMC & contribution charge for the member then, I think, they'd have difficulty in denying access. I've seen it done a good few times.




Thanks. I followed this suggestion up with the 'Financial Control' section in the Department of Education and unfortunately it seems like Cornmarket has a privileged position among all financial companies. Here's the list at the end of this document under Appendix A – Approved Deduction Agencies


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## frebel (19 May 2020)

Aodhán said:


> Anybody?



I know it's been quite a while since this post but in a similar situation to you now so would be great to know how you got on?


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