Not employed; occ pens frozen; want to avail of ssia govt payment;

M

Moll

Guest
As a newcomer to this site could I look for some advice on pensions.
I am not currently working so my occupational pension is frozen. I would like to avail of the govt. top up of 2500 euro (my ssia has matured) and would like to open PRSA. I am thinking about eagle star thru a broker as I do not understand funds etc. etc. The broker has also advised me to transfer my occ. pension to a personal retirement bond. Does this sound like good advice?
 
Hi Moll

Would need more info about your frozen scheme and the bond being suggested, for example:

  • Is the frozen one Defined Benefit or Defined Contribution?
  • What fund choice is there in the frozen one?
  • What charges are there on the frozen one?
  • What charges will apply to the bond being sugested by broker?
  • What is the fund choice in the bond being recommended?
 

I don't think transferring to a personal retirement bond is good advice. The PRB cannot be transferred onto another occupational pension or PRSA in the future. They are quite obsolete products (read high charging) and the effective lock-in is also a bad thing. If the PRSA is charging more than 1% annual (is there upfront charges?) then this is not a good option for your pension incentive tax credit top up either. Go for a pension with a 1% charge such as Quinn Life, choose one or two of their medium risk funds such as Euro and Celtic freeway which will give you good exposure to a range of equities.

Did the broker give a good reason for the PRB being a better place for your fund than the existing occupational pension? Ask what his commission is on this transfer?
 
bocade said:
The PRB cannot be transferred onto another occupational pension or PRSA in the future.
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I am pretty sure that the buy-out bond (PRB) can be transferred to another company arrangement in the future (it is essentially a 'holding' place between company schemes).
 
I too suspect that RPB/BOBs can be transferred into an occupational scheme at a later date. There may be implications regarding vesting time though (e.g. you may lose the ability to "transfer in" vesting time from the previous occupational scheme).
bocade said:
They are quite obsolete products (read high charging)
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I disagree with this. Neither are they obsolete nor necessarily high charging. It's possible to get competitive charges (e.g. no/low up front charge, low annual management charge, possibly > 100% allocation rate etc.) by shopping around.
choose one or two of their medium risk funds such as Euro and Celtic freeway which will give you good exposure to a range of equities.
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Medium risk/reward is arguably only advisable for somebody nearing retirement. Anybody with more than a decade to go should be at least considering having most or all of their fund in a high risk/reward fund.
 
ClubMan said:
There may be implications regarding vesting time though (e.g. you may lose the ability to "transfer in" vesting time from the previous occupational scheme).
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Nothing should change here either - the "provider" of the BOB/PRB is obliged to seek all information from trustee of occupational scheme (that the transfer is coming from) in relation to company service, scheme service etc...so all this should carry over from company scheme to BOB/PRB to any future company arrangement.
 
OK - I wasn't sure if there was some limitation with PRB/BOBs that meant that you "lost" the vesting period when transferring on again. Thanks for the info.
 
Thanks. I think Ill leave frozen pension where it is. I dont know what charges there are on it. All I know it seems to be making money leaving it where it is. With regard to going with Quinn Life re pension incentive tax credit - am I correct that (a) Quinn is not a PRSA Provider and (b) I would have to opt for the Annuity on retirement if I took out a Personal Pension Plan or RAC. I would prefer to transfer to an ARF.

Moll
 
ARF options are available on Personal Pensions as well as on PRSAs

Quinn Life are not listed on Pensions Board website as PRSA providers (a full list of the products and providers is available on this site which you may find useful)

On the existing frozen plan - general rule of thumb (but not absolute!) - if it's DB then leave it, if it's DC then consider moving it. Check what the management charge on the existing fund(s) is and whether a policy fee is being deducted (in some cases preserved benefits are subject to pol fees in other cases they aren't). There are PRBs out there with 100% alloc (after commission), no pol fee and management charges of 0.75% (eg Irish Life).
 
Moll said:
I dont know what charges there are on it.
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You really should check and apprise yourself of these important facts.
All I know it seems to be making money leaving it where it is. With regard to going with Quinn Life re pension incentive tax credit - am I correct that (a) Quinn is not a PRSA Provider
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They are not a PRSA probvider but I think that they are still eligible to facilitate the SSIA to pension incentive transfer. You should check that you will actually benefit from the SSIA to pension transfer incentive. As far as I know some people (e.g. high rate taxpayers) would be better off avoiding it.
(b) I would have to opt for the Annuity on retirement if I took out a Personal Pension Plan or RAC. I would prefer to transfer to an ARF.
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I don't think that having a personal pension plan precludes the transfer to an A[M]RF.
 

Club is right - it does not have to be a PRSA to benefit from the SSIA incentive - occupational pensions and personal pensions can also benefit from it - a high rate tax payer should ONLY use it if the high rate taxpayer has already maximised their tax relievable contributions (at higher rate).

Personal Pension and PRSA have equal rights to ARF options absolutely no difference.
 
CapitalCCC said:
a high rate tax payer should ONLY use it if the high rate taxpayer has already maximised their tax relievable contributions (at higher rate).
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Thanks - I didn't know that this was the gist for high rate taxpayers.
 
Have checked occ. pension - paying 1% for secured performance fund with Irish Life.
Re: Pensonal Pension Plan (RAC) - I thought the term Retirement Annuity Contract inferred that this could only be taken as an annuity at retirement.
QL are on the list of Providers for Tax Credit incentive.
Thanks
 
Moll said:
Have checked occ. pension - paying 1% for secured performance fund with Irish Life.
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Is 1% the annual management fee? Are you sure that there are no other per contribution or ongoing charges?
Re: Pensonal Pension Plan (RAC) - I thought the term Retirement Annuity Contract inferred that this could only be taken as an annuity at retirement.
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I don't think that you cannot transfer an RAC to an A[M]RF or are forced to buy an annuity with it at retirement. I'm not 100% sure but I think that the name might be misleading.
 
ClubMan said:
Is 1% the annual management fee? Are you sure that there are no other per contribution or ongoing charges?
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"Internal investment management fee of 1% - allowed for in unit price mechanism" is what the booklet tells me. No other reference to charges so if there are any other chages they are not transparent.
re pensonal pension with QL (or any other provider) it seems those eligible are a) Self employed (b)employee in non-pensionable employment. As I am currently unemployed (temporary I hope) it seems my only option is a PRSA to avail of govt. top up of 2500 on 7500 SSIA. I appreciate your help with regard to info and have found two very good threads with regard to same.
Many thanks
 
The pension incentive tax credit can be invested in an occupational pension scheme (if the scheme alllows), a PRSA or a personal pension (RAC). For this one off incentive you do not need to be employed or self employed for any of the above pension options. It is an exception to the normal rules in relation to employment/self employment for personal pensions.
 
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