Company will contribute to a PRSA with their provider only.

S

shanegl

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My company has reformed their pension scheme for new joiners and will now contribute a percentage of my salary to a PRSA with their provider. I've been told that they won't contribute to my current PRSA with another provider. Are they allowed do this?

Thanks
 
Yes. They just have to nominate one or more PRSA providers and facilitate access to these via payroll. They are not under any obligation to faciliate access via payroll to your existing PRSA. You could transfer your existing PRSA to their scheme but you would want to check the pros (easier admin, tax/PRSI relief at source etc.) and cons (e.g. less diversification, perhaps limited fund selection, perhaps higher charges etc.) before deciding to do so. I think that you can avail of their contributions to their PRSA but also make AVCs to your own. However if you do this then it will be out of net pay and you will have to chase down tax and PRSI relief separately. And obviously the cumulative amounts contributed (employer plus employee plus AVC I think) need to be below your age related tax relief limit to get full relief.
 
Thanks Clubman.

I think I might just transfer to their provider then, my existing PRSA isn't that large. Will this be easy enough to arrange with both providers?
 
What are the charges (per contribution and annual management fee) on your and their PRSAs? Transfers between PRSAs should be simple since portability is one of they key advantages of this sort of pension. Check out the Pensions Board website for more info.
 
If you want to keep your existing PRSA (e.g. because you prefer the investment manager or the fund choices that are available or the charges are lower), you could always join your employer's PRSA and then take a transfer out of that PRSA into your existing PRSA on a regular basis.

Under the PRSA legislation, any such transfers must be free of charge.

Regards
Homer
 
Just to clarify - I presume that I was not mistaken in suggesting that the original poster could contribute to the employer's PRSA (and avail of employer contributions) AND make standalone "AVC" contributions to the existing PRSA and claim tax/PRSI back manually on these? I.e. there is no barrier to contributing to two PRSAs at the same time other than the usual age related limits on tax/PRSI relief?
 
ClubMan said:
Just to clarify - I presume that I was not mistaken in suggesting that the original poster could contribute to the employer's PRSA (and avail of employer contributions) AND make standalone "AVC" contributions to the existing PRSA and claim tax/PRSI back manually on these? I.e. there is no barrier to contributing to two PRSAs at the same time other than the usual age related limits on tax/PRSI relief?
Click to expand...

As far as I know, your interpretation of the legislation is correct. My suggestion regading using the employer's PRSA and then regular transfers out was on the grounds of getting tax and PRSI relief at source.

Regards
Homer
 
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