Moving Pension to Personal Retirement Bond

42 yrs old, I have a pension currently in stasis for the last 4 years (since I left the company) with previous employers brokers worth 68K, currently setting up a pension with new employer, and getting advice from PTSB Wealth consultant who is handling that. He has suggested moving old pension to a PTSB PRB. He had previously suggested moving it to the new pension scheme but then admitted that PRB would be the better option. TBH this is all dutch to me but I'd like to make an informed decision. Any advice appreciated.

Don't use an employee of a bank, as they will screw you for commission.

Get all the facts on all the fess/costs/AMC/commission.

Then compare with a discount broker, like www.labrokers.ie

You can transfer it to your new employer and it becomes part of that scheme. So your benefits are paid out at the same time.

A PRB is just a pension plan in your own name for old pension benefits. It is your plan and you decide when to mature it (from 50 onwards). You can mature it at a different time to your current work one.

I'd agree with Protocol on charges etc. Banks are tied agents and only offer one product. Their charges can be quite high and there are usually early exit penalties for the first 5 years.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Silvergirl said:

....getting advice from PTSB Wealth consultant who is handling that......

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Sorry to be so blunt, but you are absolutely mad getting your pension from a tied agent working for a Bank. The charges associated with this are going to be far higher over time, not to mention the fact that you will not be offered independent advice, or be able to select from the entire range of funds in the market etc.

Take the time to contact one of the independents, there are plenty of good ones including a few who post on this very website. Ask them to do you up a quote for a similar offering to that from the permo and to provide you with an illustration of all costs (day 1 and ongoing). Also ask them to give you some investment comparisons, so you can see how the provider that the permo are recommending compares with some of the others on the market.

Thanks so much for the replies. Can you give me an indication of what fees are likely to be? Even approx?

We are so green and were ready to sign up! Fees and commission weren't even discussed...feel very dopey now

Hello Silvergirl,

Absolutely no reason to feel "dopey", we all learn from each other around here and the important thing is that you found out in good time.

I'll leave it to one of our pension experts to give you indication on fees

I echo what MeEarl says, no need to feel dopey about fees, it's an absolute minefield, with loads of different options.

What you need to know is allocation rate and management fee.

The allocation rate is how much of your money is actually invested. Some insurance companies pay more than your actual premium. This can be taken as commission by the advisor or paid to you.

The annual management fee is the ongoing fee and is taken as a percentage. It is also linked to the allocation rate in that the higher the allocation rate, the higher the annual management fee...in other words, the insurance company recoups the "extra" allocation rate they have given through a higher management fee. If they pay a high once off payment, they can more than recoup that over the next 23 years through higher annual management fee.

For your premium, you would have an allocation rate of 100% ie the €68,000 would be invested and an annual management fee of 1% per annum. Advisor fee on that is 1.5% set up fee and we get 0.5% of the 1% ongoing.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Thanks Steven,
The old pension scheme is being wound up with Towers Watson, and they will move it to a Zurich medium risk PRB, of target asset allocation of 25% cash and 75% Approved Retirement Fund at retirement, if I don't advise otherwise on 30th Nov.
Cash is currently in Irish Life Consensus Fund: €69,733 - value as at 15.08.17. Allocation rate of 103%, Annual fund mgt chgs: 0.65% - this sounds good?
Early surrender policy: Year 1 - 5% and so on up to 1% at year 5.

I am tempted to go for this option but have asked the Irish Life / PTSB guy to come back to me with his details.

Thank you so much for your advice, AAM and it's contributors are just brilliant.

An allocation rate of 103%, with an AMC of 0.65%, looks very competitive but the proposed investment option looks overly conservative for your age.

I would suggest that Zurich's Balanced Fund would be more appropriate in your circumstances.

103% with a 0.65% AMC is a competitive rate. The big, corporate brokers are able to negotiate very good rates from insurance companies and as they are charging the employer, they don't have to charge you to set it up.

I agree with Sarenco on the investment. I obviously have no idea of what your attitude to risk is so can't advise you on where to invest your money. Towers Watson probably won't advise you either. If you want to replicate what you are currently in, the Consensus is a Managed Balanced type fund and the Zurich Balanced is a similar type fund.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Thanks to you all for the help and advice. It's very much appreciated.