New Ireland - any opinions?

I'm 37 and getting close to signing up to an executive pension ( IRIS Fund ) with New Ireland. Any opinions on

1. Service - getting feed back on fund performance etc, their website seems to have it at the fingertips, what's their tele support like.

2. Performance - Their illustrations (like everyone else) shows them to be the best - ie from 1995-2005 160% growth, any objective opinion on this?

3. Funds - is the IRIS fund anything special?

4. Staff - Is the fund / company reliant on key staff to get it right, I remember that recently they lost a lot of people to an other venture or is this just an occupational risk in terms of the pension business?
Regards.

Why an executive pension? Are you self employed or a director or something? What are the charges like on the pension offered to you? Did you shop around more widely than just NI? Forget about past performance - it's no guide to future returns. [broken link removed] seems to be an umbrella term for a range of funds. What specific funds are you looking at investing in?

Yes, I'm a director ( a basic Joe really ) of a very small company and want to let the company pay the contributions on a regular basis, may be € 15k p.a. and a lump basis if the company had a good year. A broker has offered me 100% allocation and they keep the extra 5% as their commission, to be fair I haven't tried to negotiate into that 5% yet, I'm told that there's no bid/offer spread and I take the management fee to be 1%, but I'd have to check that.

In terms of specific funds I don't really know but something that is adventurous as opposed to cautiously balanced etc and with all due respect what do I have to go on if past performance doesn't have the weighting it appears to have? I know it sounds lame but I'm driven mad reading all the bumph and talking to the brokers who just regurgitate facts and figures with different slants. Everyone says get 'independent advice' but when I look at the ISFRA list I see some of the cowboys I've dealt with in the past are on that list.
Thanks clubman for your interest.

Please explain how the 100% allocation & 5% commission to the broker works.

All things being equal, in my opinion people should aim for no up front charges (commissions, bid-offer spread etc.) - so that 100% of their contributions are invested from day one - and an annual management fee of 1% or less. This sort of charging structure is possible to achieve by shopping around and maybe paying discount, execution only broker a fixed once off fee of a couple of hundred euro. Alternatively fund providers such as Quinn Life offer pension funds with no charges other than the 1% annual management fee (reducing after 15 years I believe). Other similar offers may also be available. Even if you decide not to get independent, professional advice you should at least shop around and not confine your research to one provider (e.g. New Ireland). In terms of funds to invest in, with c. 23 years to retirement (assuming retirement age of 60) you should probably be looking at investing in a high equity content, high risk/reward fund in order to attempt to maximise returns over that period.

luain said:

they keep the extra 5% as their commission, to be fair I haven't tried to negotiate into that 5% yet,

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What extra 5%?

Re : Rainday & extra 5%

As far as I know the 5% is the allocation rate that the broker gets as a commission for the sale. I rang New Ireland about their 5 year savings schemes and a similar principle applies. I was told that 100% of my money would go to the scheme ( less the 1% management fee ) but that if I went to a broker I might get a better deal with the allocation rate etc. They advised me to go through a broker. I rang the nearest broker to me he said he would charge me 3.5% commission on every €100 invested, which would earn him 8.5%. The like of Quinn Life have 100% allocation straight-up.( I am open to contradiction if anyone disagrees )

luain said:

I was told that 100% of my money would go to the scheme ( less the 1% management fee )

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This is not correct. The annual management fee does not come out of your contributions in this way so that 99% of each contribution is invested. The annual management fee is calculated on the gross value of the fund and is actually reflected in the daily unit price. As I understand it the daily unit price is reduced by c. 0.00274% (1%/365) in respect of this charge. If there are no charges other than the 1% annual management fee then 100% of each contribution should be invested.

but that if I went to a broker I might get a better deal with the allocation rate etc. They advised me to go through a broker. I rang the nearest broker to me he said he would charge me 3.5% commission on every €100 invested, which would earn him 8.5%. The like of Quinn Life have 100% allocation straight-up.( I am open to contradiction if anyone disagrees )

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So - in both cases how much of each €100 contribution would actually be invested? I'm not clear on that.

Re : Clubman
To be honest I'm not sure where this 5% comes from, I'm just trying to fill in the gaps from the information I've learned from all the quotes I've been given. But I think it is a bonus to the broker for bringing the business to the Pension company.

As I understand it, if I go to the pension company as in New Ireland with € 100 they will allocate the €100 to the fund ( less the Man. Fee and documentation fee etc ) but if I go to a broker ( as I was told by the New Ireland people ) I should get a better deal in terms of allocation rate, which I think can be up to 5% extra ie 105%. I was also told that the bid / offer spread wasn't charged anymore.

In terms of the broker wanting 3.5% on every € 100 I gave him, he would potentially be making 3.5% unoffically from me as a hungry @#*** and the 5% bonus.

luain said:

Re : Clubman
To be honest I'm not sure where this 5% comes from, I'm just trying to fill in the gaps from the information I've learned from all the quotes I've been given. But I think it is a bonus to the broker for bringing the business to the Pension company.

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If you don't understand it and can't get clear answers from the broker or pension company then you should get independent, professional advice. To enter into an agreement without a full knowledge and understanding of the facts (e.g. charge) would be foolhardy.

As I understand it, if I go to the pension company as in New Ireland with € 100 they will allocate the €100 to the fund ( less the Man. Fee

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Once again this is not correct. The (annual?) management fee does not come out of each contribution. It is calculated/deducted roughly as outlined above.

and documentation fee etc )

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You mean the policy fee on monthly contributions (usually c. €5 and often charged even when you are no longer making regular contributions)?

but if I go to a broker ( as I was told by the New Ireland people ) I should get a better deal in terms of allocation rate, which I think can be up to 5% extra ie 105%. I was also told that the bid / offer spread wasn't charged anymore.

In terms of the broker wanting 3.5% on every € 100 I gave him, he would potentially be making 3.5% unoffically from me as a hungry @#*** and the 5% bonus.

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I still don't get it. Are you saying that you contribute €100, you get an allocation rate of €105 and then this is reduced to €101.5 by the broker taking €3.50? Or something else?

If you don't like the remuneration that the broker gets then shop around for a better deal.

"If you don't understand it and can't get clear answers from the broker or pension company then you should get independent, professional advice. To enter into an agreement without a full knowledge and understanding of the facts (e.g. charge) would be foolhardy."

Thanks for the feed back clubman, if I knew all the answers I wouldn't be on this site! The core problems I have with these pensions is getting straight answers from these people, most of them are listed as independent advisers on the ISFRA list.

"I still don't get it. Are you saying that you contribute €100, you get an allocation rate of €105 and then this is reduced to €101.5 by the broker taking €3.50? Or something else?"

Excluding charges and management fee ( I accept what you say on charges as per your earlier replies ), as I understand it if I go to a broker with my €100 I can potentially get a better rate ( as I read it ) of up to €105 for my business. The guy I rang said he would take €3.50 from my €100 and then still probably make €5 by passing my business on to the pension company. Needless to say I put the phone down on him and highlights the sharks that still exist even though this guy was on the IBA list and shows how difficult it is to get a good deal out there.

luain said:

Thanks for the feed back clubman, if I knew all the answers I wouldn't be on this site! The core problems I have with these pensions is getting straight answers from these people, most of them are listed as independent advisers on the ISFRA list.

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Independent in what way? Authorised advisors or multi-agency intermediaries?

Excluding charges and management fee ( I accept what you say on charges as per your earlier replies ), as I understand it if I go to a broker with my €100 I can potentially get a better rate ( as I read it ) of up to €105 for my business. The guy I rang said he would take €3.50 from my €100 and then still probably make €5 by passing my business on to the pension company. Needless to say I put the phone down on him and highlights the sharks that still exist even though this guy was on the IBA list and shows how difficult it is to get a good deal out there.

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If I was you I would be looking for a deal that invested at least 100% of each contribution, attracted no other per contribution/monthly fees, charged an annual management fee of 1% or less, gave a suitable selection of funds and allowed for investment/fund switches at no charge or for some nominal fee. Such deals are not necessarily hard to find. Check out the many threads on low cost PRSAs and personal pension plans for more discussion and specific recommendations.