Bid Offer Spread on Pension

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RickyJ

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I have a Zurich Life pension (PRSA) which I have been looking at very closely over the past few weeks. I am considering paying in a lump sum to take advantage of the falling market. I do this every year in October and so I am just bringing my payment forward by 6 months.

My question is in relation to the Bid and Offer price of the units in the fund. Am I correct in saying that when I buy the units, I am am buying at the Offer Price (higher? As I move closer to retirement age I will sell at the Bid Price (lower) and then buy the new units at the Offer Price in a less riskier fund. If there is a 5% difference between each of these prices, on a projected pension value of €400,000 at age 65, does this mean I could potentially lose up to 10% of the pension just from trasfering out of the equity based fund and into a bonds / cash fund? I am not taking into consideration the rise or fall of the total value of the fund due to the markets. My question only relates to the Bid and Offer prices. I have 10 years before I reach retirement age.
 
Hi Ricky. PRSAs cannot be set up on a bid/offer spread basis. PRSAs are bid to bid only. You buy and sell at the bid price.
 
@RickyJ

If your PRSA policy schedule states that your Current Allocation Percentage is 95%, then the 5% is a contribution charge and it's taken from your contribution on day one.

Zurich have to include the Bid/Offer pricing on the website as there are folk that may have older policies where B/O applies. It's a question I regulary get asked (whether the B/O applies to the current suite of PRSA/RAC/PRB/EPP products) by execution only clients.
 
Thanks for your answers. I checked the policy schedule and the current allocation percentage is 100%. I will transfer a lump sum next week and then forget about it for a few years.
 
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