Pension charges need help

I do hope the sales agent has done a proper analysis of the ES policy to justify the claim that switching to a Non Standard PRSA is cost effective.

No he did not it was a comment that he made that the ES was taken out a couple of years ago and that older type pensions had higher costs and the best way to stop that was to stop paying into it but did not discuss it with me at all

still waiting on the info from ES, had to send another email asking where the info is

rohora said:

No he did not it was a comment that he made that the ES was taken out a couple of years ago and that older type pensions had higher costs and the best way to stop that was to stop paying into it but did not discuss it with me at all

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This is simply wrong and reinforces my earlier negative opinion of the guy. Just because your Eagle Star policy is a couple of years old it does not automatically follow that it has higher charges than the Irish Life PRSA. In my own practice, we've been arranging Personal Pension plans at discounted charging structures for over ten years - I know other brokers who have been doing so for longer. How does he know what your Eagle Star charging structure is like?

Maybe your Eagle Star policy has higher charges than the Irish Life PRSA, maybe it doesn't. The point is - you can't and shouldn't make a broad statement like he did without taking the time to get the facts, which you're doing now.

(1) Current nominal fund value.

(2) Current transfer value (the value that they would give if you transfer it elsewhere)

(3) What fund are you invested in?

(4) List of all charges that apply to your policy on an ongoing basis.


Not a lot of figures just the charging structure


Fund Value €43,364.61
Transfer €37,148.74

Investment funds

Rainbow Route to retirement opion was selected
premiums were initally invested in the dynamic pension and investment fund
with effect from 17/04/2005 premiums were redirected to the performance pension and investment fund

dynamic fund is high equity content
performance is medium risk/return

The transfer value may include a special bonus which can be reduced or withdrawn without prior notice

If your policy contains unit holdings in the SuperCAPP Fund,these values are based on an interim dividend of 4.00% for the year commencing 1 January 2007 and until the final dividend is declared by the Company Actuary

Premium Spread
I dont get any numbers just there Charging Structure
The percentage of regular premiums used to purchase unit at the ruling offer price is 100%

bid/offer spread
There is a 5.00% difference between the price at which the premium purchases units compared to the bid price,which is the price at which units are sold

Management Charges
The companys investment expences relating to the fund management are recouped by means of a 0.40% per annum management charde to Initial and accumulator units
ES recover the initial expences and charges involved in setting up a new policy by investing the first 2 years premiums(together with the first two years of any subsequent increase in premium) in ititial units and these bear an additional management charge of 4.00% per annum

policy fee
ongoing admin expenses are met by means of a policy fee which currently stands at €3.82

also a bit of information of difference in fund value and transfer value

From what you've posted above, there were some fairly hefty charges imposed on contributions paid to date. But you can do nothing about this now as it's in the past.

The ongoing charges on the fund don't appear too severe and look like they add up to less than the 1.35% or more charged by the Irish Life Non-Standard PRSA.

I'd suggest you stop making any more contributions to this Eagle Star policy but leave the fund invested in it - it's known as making this policy "paid up". Your existing fund will continue to participate in the relevant fund growth until you retire.

Your previous posts in this thread suggest that you are not entirely clear on what fund(s) your Irish Life PRSA invests in, nor why a Non-Standard PRSA (with higher charges) was selected. Based on this, I'd also recommend that you go back to the Irish Life sales guy and tell him that you want to re-write your Non-Standard PRSA as a Standard PRSA (which has lower charges) and he can talk you through the fund choices available. If you're not sure which one to pick, there's a Default Investment Strategy to choose. If he resists this approach, tell him that he didn't make it crystal clear to you why a Non-Standard PRSA was better for your requirements than a Standard PRSA (which he should have) and that you're considering making a complaint.

Don't forget to re-direct your current Eagle Star monthly contribution into your Standard PRSA.

These are suggestions on an internet board, based on the information available on the board. You should take professional advice before making any financial decisions.

Thanks LDfor that ,can you suggest where i can get this information and roughly what it should cost

There was a very interesting article by Shane Ross is yesterday's Sunday Independant on pensions which would scare anybody from investing in pensions in Ireland. Might be of interest to the OP.

That article can be read here. Shane Ross seems to be making the point that if pension funds drop in value, the fund managers should not hold their annual dinner. He doesn't seem to grasp the most basic of investment principles - fund values will go down as well as up from time to time.

rohora said:

Thanks LDfor that ,can you suggest where i can get this information

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From a good multi-agency intermediary or authorised advisor specialising in pensions I presume?

and roughly what it should cost

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Shop around. You need a full advisory service (and not simply an execution only service with possibly some basic advice) by the sounds of things so it could cost a few bob.

I thought Shane Ross's point was that they shouldn't celebrate when their funds were such dismal performers last year compared to other countries. And that the Irish funds were too heavily subscribed to particular shares due to the cosy relationship between the fund managers and the companies whose shares they recommended. I'm not sure but is it possible to invest in a pension with the Irish providers that is not linked to Irish companies/too heavily on the ISEQ.
OP I think LD is the type of person who specialises in pensions and he's always giving good advice on here (in my opinion) so maybe you could PM him. At least he speaks in plain English which is always a good place to start.

Bronte,
It is certainly possible to invest in funds with little or no exposure to Irish Equities. Most providers offer a choice of global equity funds, so it is possible to invest in a mix of differing markets.

As for Shane Ross, I dont suppose that his paymaster (IN&M) cancelled their Christmas party just because their stock fell some 50% in the last year. Did the great and good of the IN&M Board take any reduction in their income to compensate for such a performance? Did we see him exercise his journalistic independence to critically analyse why that stock performed so poorly? No, all we saw was a piece of "puff journalism" decrying Denis O'Brien's share purchase in IN&M and for for having the temerity to challenge the cosy O'Reilly family cartel.

Does anybody really take Senator Ross seriously as a financial journalist these days?

ClubMan said:

Does anybody really take Senator Ross seriously as a financial journalist these days?

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But the points he makes in his article are excellent and I would
recommend a read of the article to anyone curious as to where a portion of the "management" fees go to.

i had a word with LD and he confirmed what i thought , the pension fund management costs where OK but it was there take on the contributions that was the killer and parking the ES was the way to go and talk to Irish Life about the fact that i have a non standard PRSA and not a standard and pay into that

so a big thanks to him