Options for moving DC Pension to Buyout Bond

InfoSeeker

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459
I read https://www.pensionscouncil.ie/en/Council-Opinions/Report-on-BOB-Charges-.pdf and it was very helpful to see the differences in charges and how they are applied from different life assurance companies.

It does not go into the additional charges if you use an intermediary, i.e. a pension broker.

My fund is circa 100K and I would not require advice on where to invest it.

My question is; am I able to purchase a buyout bond directly with a life assurance company or do I have to use an intermediary.

Please note I have no issue paying an intermediary if I can understand the value he would add to this process.
 

Conan

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965
Yes you can go direct to an Insurer, assuming you know what Insurer, what investment fund(s) and are happy with the charging structure. It won’t be necessarily cheaper than using an Intermediary (though maybe you can negotiate a deal going direct).
 

kevhenry

Registered User
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48
Yes, you can go directly through the insurer but this doesn’t mean you will get lower charges as you would be still going through a retail distribution channel rather than a brokerage channel.

If you don’t need initial or ongoing investment advice then you shouldn’t be paying for it.

Kevin
www.thepensionstore.ie
 
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InfoSeeker

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459
Thanks for the replies, I have a meeting with a broker in the coming week so I will try to get a breakdown of the charges involved as all I need is the DC pension to be moved into a buyout bond.

I can choose the relevant fund to invest in based on the life assurance company that provides the best charges.

For this part the broker will be of help so I have no issue paying for that.
 

InfoSeeker

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459
Obviously it is not that simplistic but based on a read of https://www.pensionscouncil.ie/en/Council-Opinions/Report-on-BOB-Charges-.pdf there are a variety of charges and this changes from year to year. It is well worth a read.

For me it is more important to identify your risk level for the medium term and this immediately reduces the number of options then review those and compare charges with the relevant assurance companies. I would love to know which fund would perform the best over 5/10/15/20 years, sadly I don't though I know excessive charges will have a serious impact exponentially over a large number of years.
 

SBarrett

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3,129
That is some investment philosophy!
Agree 100%, See my post last week on Irish Life's "index" funds and how they consistently miss their own benchmark. If you were getting the cheapest contract from Irish Life by 0.25% (that's unlikely anyway) and invested in their Global Equity fund, you'd lose out on 1.73% of growth per annum over the last 6.5 years compared to a fund manager that does a better job of tracking their index.

My concern is that with both funds, not only do they not match their benchmark in any of the 6.5 years of data on the factsheet but they under perform the benchmark each year (no one gives out for too much return. Over 6.5 year, the World Equity misses 1.11% of growth for each year while the Global Equity leaves 1.98% per annum behind!!! These tracking errors from the biggest life company in Ireland are shocking. The likes of State Street have a tracking error or 0.12%.
Costs are important but don't let it be the only factor when there are other issues to consider such as is the fund manager doing its job.

Steven
www.bluewaterfp.ie
 

GSheehy

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305
My fund is circa 100K and I would not require advice on where to invest it.

My question is; am I able to purchase a buyout bond directly with a life assurance company or do I have to use an intermediary.
You have to use a pension provider that has an in-house sales team or an intermediary. A compliance file has to be set up on the transaction and a regulated person has to sign the application form.

You know the product you want and you're happy to choose your own fund/s - what you appear to be uncertain about is which pension provider to use. If you knew the latter you could ask for an execution only service from the pension provider or the intermediary and compare the charges.

The easiest products to understand/compare are the ones with a single charge and that don't have entry/exit charges because, if you're not happy, you can move elsewhere without penalty.
 
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