Finding information on fund options for proprietary director

[Palindrome]

I am proprietary director of a very small company, and I am trying to figure out how best to go about arranging a single payment into a pension scheme from the company.



I am not looking to pay anyone for advice. I just want an equity fund with low upfront charges, low management fees and a passive investment strategy that is unlikely to waste funds under management on trading. For preference, I probably want an unhedged global or European index fund. (I am more concerned about minimising costs than smoothing returns.)



I thought I would be able to find what I wanted by looking online, finding the lowest cost way to meet my investment objectives, and then going to a broker that does execution-only to purchase it, but it doesn't seem to be that simple. Almost everything I look at online that broadly meets my criteria seems to have a minimum of one of the following problems with the information available:
- It is not clear whether the fund is available as a single premium product for a company director.
- It is not clear what the management fee would be.
- It is not clear whether there are any upfront charges, spreads, less than 100% allocations etc. (aside from the fee for execution to the broker).



The pension products I have found for which the above information seems to be easily available are not simple passive funds, and their management fees are (unsurprisingly) higher than I anticipate being able to get with a passive fund.



It feels like it would be unreasonable to approach a broker for an execution-only deal without already knowing exactly what I want to buy. I would appreciate any suggestions on the most efficient way to break through the information problem.



Thanks in advance.

 

[Dave Vanian]

You have two options for getting a lump sum from the company into a pension for yourself: -

1. A PRSA. Not terribly efficient as you'll still pay USC on the contribution and the minimum charge you'll find is 1% per year.
2. An Occupational Pension Scheme. (Sometimes referred to as an Executive Pension or Directors Pension.) You cannot set up one of these with a once-off lump sum. Revenue rule. You have to set it up as a regular contribution. No obligation to pay the same amount next year, or anything at all next year, but for documentation purposes, there has to be a regular contribution before Revenue will approve a scheme.

What ball-park amount of lump sum are you considering?

 

[Palindrome]

Many thanks for the advice. Circa 30,000 euro.

 

[LDFerguson]

I think one of the reasons that you're finding it difficult to get charging information on the web is that most pension companies offer a huge variety of charging permutations and combinations and it's at the discretion of each individual Financial Broker or agent to decide which charging structure they want to use to suit their own business model.

The pension companies don't quote their wholesale charging structures online.

But your point is a very good one. An execution-only broker is not permitted to offer advice on the difference between providers.

For the amount that you're considering, Friends First have a low-cost index-tracking pension product at wholesale level. I hope that's helpful to your quest.

Incidentally, execution-only doesn't just relate to an absence of advice on funds - it also means that you don't receive advice on the various Revenue rules governing pension contributions, fund sizes etc. So to bypass advice on an Occupational Pension Scheme contribution, you'll need to make sure you're familiar with the rules on...

• Maximum allowable contribution size by a company.
• Maximum fund size at retirement.
• Rule governing relationship between regular "ordinary" contributions and once-off "special" contributions.
• Responsibilities of being a pension scheme trustee and bi-annual trustee training.
• Two different sets of rules governing how you can take your benefits at retirement.

That said, all this information is contained in the Revenue Pensions Manual which can be viewed online and has recently been updated. See [broken link removed].