PRSA

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Minnie

Registered User
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Hi
My PRSA retirement date was this year when I turned age 60. I am single own my own home and have no outstanding loans.
My fund value is worth approx 160k and I'm reviewing my options. If I leave it vested in the PRSA can I access the 25% tax free and keep the balance in the vested PRSA or will drawing down the 25% trigger the need to invest in AMRF/ARF (I am not interested in an annuity).
The intermediary/sales remuneration if I were to set up an AMRF/ARF is 5.5% which is painful so would like to try to avoid it - €6,600 is a huge percentage to just hand over in year one.
Thanks in advance for any help on this.
 
Minnie said:
The intermediary/sales remuneration if I were to set up an AMRF/ARF is 5.5% which is painful so would like to try to avoid it - €6,600 is a huge percentage to just hand over in year one.
Thanks in advance for any help on this.
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Be aware that an intermediary can choose what level of remuneration they're going to receive from your fund, from a range provided to them by the pension company. In this case, your intermediary has chosen to take 5.5%. If you don't think that this is a reasonable amount of money for the work being done, you should shop around for a different intermediary.

It is possible to leave the money vested in the PRSA after drawing your 25% lump sum. Your ongoing charge will then be the 1% annual charge, assuming that this is what you are currently paying on your PRSA. For the sums involved, you should be able to get an AMRF / ARF with 100% invested and a lower charge than the Vested PRSA, e.g. 0.75% per year. Shop around.

Regards,

Liam
www.ferga.com
 
kevhenry said:
Yes, you can trigger your tax free lump sum and the remainder will then remain in the PRSA (vested) without the need for an ARF/AMRF.

kevin
www.thepensionstore.ie
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Hi All,
Thank you so much for all your replies. I have been with Zurich since 2004 and am horrified that in order to transfer to an AMRF/ARF would incur such a cost, it's obscene and the sooner the government change the rules regarding AMRF/ARF the better. The fact that I had the sense to save for the future I believe I should have the freedom to access these monies without having to incur excessive charges.
Am I right in thinking that if after taking the tax free lump sum and staying in the vested PRSA that if I want to draw down more monies that I will then have to set up an AMRF ( I will not have enough income to meet the income requirement of €12,700).
Thanks again in advance.
 
Minnie said:
Hi All,
Thank you so much for all your replies. I have been with Zurich since 2004 and am horrified that in order to transfer to an AMRF/ARF would incur such a cost, it's obscene and the sooner the government change the rules regarding AMRF/ARF the better. The fact that I had the sense to save for the future I believe I should have the freedom to access these monies without having to incur excessive charges.
Am I right in thinking that if after taking the tax free lump sum and staying in the vested PRSA that if I want to draw down more monies that I will then have to set up an AMRF ( I will not have enough income to meet the income requirement of €12,700).
Thanks again in advance.
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Hi Minnie,

Zurich aren’t the villains here. Some low-end broker is making out like a bandit at your expense. You can quite easily access an ARF at minimal cost.

5.5% is a disgrace.

Best of luck,

Gordon
 
Minnie said:
The fact that I had the sense to save for the future I believe I should have the freedom to access these monies without having to incur excessive charges.
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You do. You have the freedom to go to any provider you like and to any intermediary you like and you can access an AMRF and ARF at a much lower cost than what you've been quoted.

Minnie said:
Am I right in thinking that if after taking the tax free lump sum and staying in the vested PRSA that if I want to draw down more monies that I will then have to set up an AMRF ( I will not have enough income to meet the income requirement of €12,700).
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If you stay with a Vested PRSA, then Zurich Life can segregate the first €63,500 of the Vested PRSA which will be treated like an AMRF and the balance will be treated as an ARF.
 
Hi Gordon
Thanks for your reply. The information is from a Zurich customer guide to ARF/AMRF not from a low end broker either that or I am misinterpreting it, see attached file.
 

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LDFerguson said:
You do. You have the freedom to go to any provider you like and to any intermediary you like and you can access an AMRF and ARF at a much lower cost than what you've been quoted.



If you stay with a Vested PRSA, then Zurich Life can segregate the first €63,500 of the Vested PRSA which will be treated like an AMRF and the balance will be treated as an ARF.
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Thanks LD
 
Hi Minnie,

That’s just Zurich telling you what the broker has chosen to be paid.

Broad rule of thumb: By locking you in for a period of up to 5 years, the broker creates a pool of money equal to around 5% of the value of the pot. The broker can then pocket the entire 5% and hide it within the paperwork so he/she makes out like a bandit and you get locked in for 5 years. Or the broker could split it with you. Or the broker could take no commission at all and leave you free of lock-ins.
 
Gordon Gekko said:
That’s just Zurich telling you what the broker has chosen to be paid.
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No, it's not.

That's a page from the Customer Guide with a Generic Disclosure.

That may not be the level of commission chosen by the intermediary. AFAIK, Zurich Life don't have a 5.5% initial/up front commission contract.


Gerard

www.prsa.ie
 
@Gordon Gekko

Generic documents quote the worst possible scenario on initial charges. I think 5% initial is their max and the other 0.5% may be there from the days when product providers could pay some sort of override or marketing support to intermediaries. It say's 'Projected' on the document.

Product Providers don't have Specific Disclosures Customer Guides for each commission structure they have - there could be 100 different ones on any product.

It's up to the intermediary to disclose the Specific structure at the point of sale.

We send out that exact same Customer Guide when requests come in through the website but folk know that they're buying a 0% initial contract (with no exit penalties) with a 0.75% AMC because we state it on the website and in the cover letter.

The specific disclosure would also be with the issued original documentation (except for Executive Pensions).

@Minnie might have a Specific Disclosure from whoever they are deaing with.

Gerard

www.prsa.ie
 
Thank you all again, I'll have to look over the original paperwork to see what story that tells. More clarity and transparency are obliviously too much to ask for from this industry!!!
 
One more question, can you take out 15% tax free and then take another 10% at a later date from a vested PRSA or does the 25% have to be taken at the one time. Thanks in advance.
 
Minnie said:
One more question, can you take out 15% tax free and then take another 10% at a later date from a vested PRSA or does the 25% have to be taken at the one time. Thanks in advance.
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You can only take the lump sum - up to 25% maximum - at the one time.
 
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