Alternatives to BOI Life Directors Pension

C

clio99

Guest
Hi all,

I have just found this site and appreciate the quality of the information it contains, so fair dues to all contributors.

I am self employed for the past 3 years and since Jan 2003 I have a directors pension with BOI Life, into which I currently pay 1350 euro per month. I also have a very small employess pension from a job I was in a few yrs ago.

I am 29 and don't own a house so I know a lot of the advice will be "buy a house mate" but I have a site on which I intend building in a 3 or 4 yrs.

For this I have been saving 2500 monthly since January outside of my pension. I also have an SISA. Thus I plan on having a low enough mortgage when the time comes but the money I am saving is doing nothing for me at the moment.

Ok the questions:

Short-term saving in Ireland is pretty crap - is Rabodirect the best bank interest rate out there? Are there any alternatives for the short term bearing in mind I don't want to risk loosing the SMEG fridge in the new house.

My pension is tax efficient but I am constantly told that charges are the enemy (nothing specific to BOI life just all pension funds in general).

Am I better off setting up my own PRSA and buying shares for the long term through this?

If so, how is this managed?

If I were to do this what whould happen to my current directors pension?

Also, what would be the implications if I was ever to cease trading and be employed by another compamy some time in the future.

Many thanks and hopefully I'll remember you when some of this advice pay's for a young nurse and plenty of Viagra well into my 90's :cool:

 
Hi clio99,

Can't authoritatively answer any of your questions, I'm afraid (other than to say that NR's 'online demand' a/c beats Rabodirect by a whopping 0.05%) - but I suspect you've already created quite a reputation for yourself, 'round AAM way..! ;)
 
Welcome to AAM, Clio - Can you confirm what charges you are currently paying with BOI? There are significant differences in the charges between the dearest and the best value in the market.
 
Hi RainyDay,

I am going to have to check with them. There is a fund management charge of 2% but there are also contribution related expense charges on the statement which work out at circa 5%.

I never actually noticed this before as I assumed it was just 2%. To be honest the only reason I got this pension was, I assume like many others out there, to avoid some of the guilt as I squandered the rest.

The geezer who sorted me out with it is a mate of my parents but I have realised since that the only difference that makes is that he can ask how your parents are as he rides you. Probably makes one more open to being screwed as you think their smile is one of friendship rather than victory.

Anyway thanks for your reply. Once I check it out I will get back to you...

Y'all have a good night now,
Clio
 
Hi again

I pay 5% on the contributions and 2% fund management charge.

I suppose it isn't that different to standard PRSA's but what if I were to set up a PRSA as a director and then buy shares to hold in the long term through this? Probably not as tax efficient but surely more chance to grow than an actively managed Pension?

Anyway as I said all advice appreciated but since I put up this post I have been looking around and finding some decent info out there.

Cheers.
 
clio99 said:
I pay 5% on the contributions and 2% fund management charge.
Click to expand...
Ouch! You really should stop any further contributions to this fund today. You can get far better value from EBS or Quinn Life or shop around through a nil-commission broker.

I can't answer your other questions about holding shares through a directors pension, but hopefully others will help.
 
In relation to the 5% and 2%, I am not sure it is that simple.
My understanding is that the 2% charge applies only for a number of years (maybe 10) and then reduces to 0.75%. In addition, bonus are added to the value of the fund over the term of the plan thus in effect giving you back some of the 2% charge over time.
 
It might be a good idea to consult with a fee-based authorised advisor for a proper independent evaluation of this policy and any alternatives.
 
Conan said:
In relation to the 5% and 2%, I am not sure it is that simple.
My understanding is that the 2% charge applies only for a number of years (maybe 10) and then reduces to 0.75%. In addition, bonus are added to the value of the fund over the term of the plan thus in effect giving you back some of the 2% charge over time.
Click to expand...

Whoopy doo! You get back some of the 2% - the pension fund still has to grow by more than 5% just to break even!
 
Since posting this I have been looking around a bit and realise that I could be doing a lot better.

Thanks all, I will let you know what I do in due course. : )
 
Never trust someone who says charges will reduce in a few years.

In variable cahrge policies (basis of the contract) the amc can reduce but the other charges can be increased.

Peter robbing Paul.

The cheap providers, Quinn, EBs may well be low cost but are equally likely to be low class also.

Get a nil commission contract and pay a fee for it. Ask a good AA.
 
RS2K said:
The cheap providers, Quinn, EBs may well be low cost but are equally likely to be low class also.
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Is this a personal opinion, a professional opinion or a verifiable (with supporting data) fact?
 
Clio 99 - three things you neeed to consider re your pension


a) charges............

b) fund performance (take care not to opt for someone who offers 1% less charges but consistent dismal fund performance - latter potentially outweighs the former)

c) service/flexibility - likely your circumstances will change during life of pension, make sure your provider can cater for changes you will want to make during the life of your pension.
 
RainyDay said:
Is this a personal opinion, a professional opinion or a verifiable (with supporting data) fact?
Click to expand...

Personal opinion only. Unverified.

But remember cheap isn't necessarily best.
 
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