2 Pensions versus transferring PRSA (non employer contributed) to new company scheme

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SClarke

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Don't know enough about pensions to know if this is a stupid question or not! This is a scenario I may have in the future. Basically, I'm about to start my pension - a Zurich Life PRSA through LA Brokers. My company currently doesn't have a pension scheme as of yet but if auto-enrollment comes out in 2 years time they'll likely have one then. There's a possibility they may roll it out before then but nothing is set in stone yet. I'm just trying to figure out what my options might be when they do roll it out.

1) Could I have two pensions - keep LA brokers - Zurich PRSA which I'm about to start soon but reduce my contribution e.g. from €600 to €200 - hopefully there's no fee to arrange this with LA brokers - and then contribute €400 to the new company scheme (guess it's likely my company would contribute 5% then as well). I'm assuming my tax relief would be calculated based off the two pensions combined? Are there any limitations/disadvantages to doing it? I guess i'd be paying amc fees on two prsa's rather than one so that's a disadvantage off the bat, but excluding that would there be any bonuses security wise to have a second pension - more control on the returns I get...?

2) Transfer my PRSA across to my company scheme - not sure if anyone knows how easy it is to do this and if a fee is involved. I'm guessing if my company goes with a Zurich plan it would be straightforward but any others I don't know?

Thanks in advance.
 
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I got a PRSA with my employer years ago - that employer was merged into another company where I now have a pension scheme via the company and get contributions over matched. I stopped paying into the PRSA obviously but I didn't merge.
The advantage of merging would be that my company is covering the fees via the current pension scheme and less "administration" - how fees are handled via the autoenrollment scheme is to be seen.

The "advantage" of keeping it separate is that I have access to different funds and I believe I can vest them at different dates.

If the company offers you a pension scheme with matching I would stop contributing to the first one - saves you the hassle with claiming tax back and the company might match your contributions more generously if you contribute more.

You should definitely start a PRSA without contribution fees though to get the ball rolling - the contribution amount depending on your personal circumstances like the tax band you are in, current savings, mortgage amount and interest, other monthly outgoings/debts and your age.
 
1) Yes, you can keep your private PRSA and continue to contribute to it while also contributing to an employer-provided occupational pension. I am currently doing this. Main advantage is that I can adjust my AVC contributions easily if financial situation changes. It's also with LA Brokers so low commission charges. Disadvantage is that I have to claim tax back.

2) Yes, you can transfer your entire PRSA into your employer-provided occupational pension. In a previous job, my employer didn't provide an occupational pension. They just contributed to the employee's PRSA. But in order to get the employer contributions, you had to use the PRSA and broker that the employer specified. And that PRSA had the outrageous 5% contribution charge. As soon as I moved to a new job, I transferred that entire PRSA into my new employer's occupational pension scheme. It's a standard process.
 
I suppose one point to highlight is that it isn’t possible to access different funds in respect of the same employment at different times.
 
Hi Persius - I'm interested to know how you are contributing to both your private PRSA and company occupational scheme at the same time. Do you have two or more income streams?
 
If you are a member of an occupational pension scheme, you cannot claim tax relief on the contributions to the PRSA. Any AVC payments can be paid into the main scheme or into a PRSA AVC, which will be linked to the employer scheme. This will allow you for example to access the value of the PRSA AVC from age 50, if you matured the benefits in the main scheme at that age. You cannot access a standard PRSA until age 60.


Even in the cases of having two different income streams, you must maximise the pension contributions to the scheme first through AVC's and then you can make a personal contribution to a personal pension/ PRSA from what is left over, subject to an earnings ceiling of €115,000.


Steven
www.bluewaterfp.ie
 
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