Moving own personal pension to work one

[agwa]

Hi all,

I set up a pension a few years back (Royal Liver) because there wasn't one on offer from my employer. My employer is now offering to pay 5% of my salary into an Eagle Star pension to which I can make an extra contribution if i wish.

My question is, is it possible to move my Royal Liver pension to the Eagle Star one. If this is possible, is it even a good idea or does it make no difference?

Thanks in advance,
Agwa

 

[ClubMan]

My question is, is it possible to move my Royal Liver pension to the Eagle Star one.

I don't think so. Is it a PRSA or a personal pension plan/Retirement Annuity Contract?

If this is possible, is it even a good idea or does it make no difference?

Consolidating pensions only makes sense when there are tangible benefits accruing - e.g. lower charges, easier administration, better choice of funds, better customer service etc. In some cases the benefits of having multiple pension plans (e.g. diversification) may outweight the costs (e.g. more administrative hassle tracking multiple funds).

 

[agwa]

Thanks Clubman,
What a marvelous website this is! A 3 minute response time!!

My pension is a personal pension plan (as far as I know..).

I'm happy enough to keep the two of them going, I was just afraid I was committing some financial faux pas by having two on the go. I'll look into the charges on both. What's the typical charge on a pension (roughly)?

 

[ClubMan]

I was just afraid I was committing some financial faux pas by having two on the go.

Not necessarily. I have about 4 or 5 myself for various reasons!

I'll look into the charges on both. What's the typical charge on a pension (roughly)?

No easy answer to that. However a competitive charging structure would be something like no charge on each contribution, no ongoing monthly charge (e.g. policy fee) even if there are no monthly contributions, 100% invested and an annual management charge of c. 1%. But charges can and do vary a lot. Best to just check what the ongoing monthly, per contribution, annual management fees, and allocation rates are on both.

 

[boaber]

I'm happy enough to keep the two of them going, I was just afraid I was committing some financial faux pas by having two on the go. I'll look into the charges on both. What's the typical charge on a pension (roughly)?

Hi agwa

You can't pay into both if you only have one source of income. If your only income is from your new employer then you will have to stop paying into the Personal Pension.

If your new employer's scheme is a PRSA, then there is no problem in transferring the personal pension into this (you should of course take into account any early surrender penalties / charges etc).

If it is an occupational pension scheme then you cannot transfer a personal pension into this (althought there are loopholes!)

 

[agwa]

Thanks guys,

I do only have one source of income (apart from dividends from shares which are negligible). I'm not sure if my employer is offering a PRSA - I'll find out.

Seems strange that I'm restricted to only one pension ...

 

[ClubMan]

Seems strange that I'm restricted to only one pension ...

This is not necessarily the case. For example say your employer offered an occupational fund but only allowed you to contribute a certain amount (some or all of which they will match). If you are not maximising your tax/PRSI relief and they don't offer an AVC (Additional Voluntary Contribution) option for higher contributions then you can open a PRSA to cater for this. Also - you are not restricted to holding one pension but you may be restricted from contributing to certain pensions while contributing to others (such as in the situation outlined by boaber).