PRSA and commission

C

colin44

Registered User
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Heya,

I have a PRSA through work, and I have a contact provided from work to set it up..
This PRSA was setup Feb 2024 and the advisor set this up, As I am 50 this year I want to up my AVC's from 25% to 30%
So have a meeting with him on Thursday to talk about this, not sure why I just want to increase the payments.
Im sure its so he can earn an additional fee?
He sent an email with documentation in it, which included a doc on fees, where this table was, see below..

For his commission last year he got 20% (pension products - pre retirement) for setting it up? but 20% of what?
Plus each year he gets 2% renewal, is that right? I assume of the value of the fund each year? So each yr he gets more and more as the fund increases, but he does nothing!

Why is he getting this for realistically doing very very little, plus Im paying Irish Life to manage the fund as well?

What should I do here?

Am I right in assuming he wants the meeting to justify his charge, and most likely see if their is anything else he can do for me so he can get more commission?

1738668357043.png
 
What's the allocation rate on your PRSA and what's the AMC? They'll be on the policy schedule

The above is a generic disclosure document and not specific to the product you bought.

But, 20% of the (first year's) annual contribution (and potentially any increments) - paid for (upfront by the product provider) out of the contribution charge. The 2% would be of annual contribution.
 
AMC = 0.99%
Only allocation I could find below.

Why is he getting this fee, for what exactly?
Do I need him?
Obviously the fund is managed by Irish Life and I am paying them a fee for this as well
What is the purpose of the meeting on Thursday, I simply want to increase AVC from 25 to 30%?
1738669817017.png
 
The pie chart is asset allocation within a particular fund.

Allocation rate, also known as contribution charge, refers to how much of each premium is taken in fees.
 
Yes.

So of every 100 euro that you save, there is a 0.8% contribution charge (80 cent).

This is separate from the AMC charged on the fund.

The AMC varies by fund.

The 99.2% is not the AMC.

Typical AMCs are 0.65% - 1.25%.
 
So AMC is .99%
And allocation rate is .8% - "So of every 100 euro that you save, there is a 0.8% contribution charge (80 cent)." - so who gets this?

What does any of this mean?
What does Irish Life get for managing the fund, and what does the advisor / broker get?

Why is he getting this fee, for what exactly?
Do I need him?
Obviously the fund is managed by Irish Life and I am paying them a fee for this as well
What is the purpose of the meeting on Thursday, I simply want to increase AVC from 25 to 30%?
 
colin44 said:
So AMC is .99%
Click to expand...
We don't know.
You haven't clarified what the AMC is yet.

Whatever the AMC is that percentage of the total fund value is taken each year by the pension provider.
colin44 said:
And allocation rate is .8% - "So of every 100 euro that you save, there is a 0.8% contribution charge (80 cent)." - so who gets this?
Click to expand...
The pension provider and/or broker if applicable.

In general it's best to aim for 100% allocation rate so that all of your money is invested and an AMC as low as possible.
 
so every year 1.79% is taken off the fund value.. is that alot?
TBH do I have a choice, as it is thru work, I have to go with Irish Life, but do I need the advisor / broker?
And will that change any of the above fees?
 
Are you sure the AMC is 0.99%?

I have never seen such an AMC before. They are typically multiples of 0.05%.

Are you sure that you are not confusing it with the 99.2% allocation rate?
 
If the AMC is 0.99%, that is not very high for the Irish market, but nor is it very low.

It is possible to get PRSA with 0.75% AMC, on an execution-only contract, with no advice.



If the PRSA is set up through work, then it seems like you can't switch broker and/or insurer.

These fees may be the result of negotiation between the employer and the broker.

I suspect that the contribution charge goes to the broker, and also Irish Life may pay some of the AMC to the broker.
 
It's not a PRSA. It's an Occcupational Pension Scheme and the possibility of getting 100% accurate charges on it are low. There's no obligation on advisor or product provider to disclose.

It's likely that there's trail commission built into the AMC of its 1.79%. Who chose the fund initially? Is there a policy fee mentioned?

The allocation rate is good but we don't know if there's a bid/offer spread (5% charge) on it.

You could set up a separate (from the scheme) AVC PRSA but you'd need to do a bit of research on that yourself and be comfortable that you know exactly what you're doing.

You have to buy the product through a regulated entity, be it provider direct or intermediary.

The advisor set up the scheme, agreed the terms with the employer, services the scheme and probably wants to meet you for a well overdue review (?). Take the meeting, have your questions ready, maybe ask for replies in writing, decide if you're happy to proceed based on replies.
 
Thanks for the replies..

If its not a PRSA why does it have it in the name: Complete Solutions PRSA Standard (1.5%)?

And Im sure the AMC is .99%, cant find now where I saw it yesterday.. they dont make it easy.. plans are so convoluted, difficult to find anything again..

"wants to meet you for a well overdue review"? To review what, I just asked to increase my AVC's to the max for my age.. Maybe its my scepticism, but any sales guys who wants to talk I rarely have any time for them :)

So basically nothing I can do here, this is how the system works? Its just seems very odd that he gets so much for doing very very little, Im definitely in the wrong job
 
Can you just say ' thanks but no thanks - i don't wish to have a review, please increase my contributions to 30%'?
Sounds like your plan fees are based on advice which means your are entitled to have a chat - but you don't have to.
Or you could go along anyway, ask some questions about fees, then ask for the contributions to be increased.
It might be a good learning experience too. You're paying for it anyway.
 
Im gonna go along with it, as you say Im paying for it anyway..

Thanks, Just wanted to clarify what the fees are, and that I have to go thru the broker (not that I need him, its just the way Irish Life do things)! So I have no choice but to pay him the fee for doing nothing :(
 
@GSheehy you say "The advisor set up the scheme, agreed the terms with the employer, services the scheme and probably wants to meet you for a well overdue review (?). Take the meeting, have your questions ready, maybe ask for replies in writing, decide if you're happy to proceed based on replies."

when you say 'services the scheme', what do you mean? I thought Irish Life actually looked after the investment side of things? Other than setting it up last Feb, the advisor has done nothing since? Just curious as to what Im getting for his fee?

I suspect nothing (dont know how this can be legal!), but from what I read above this is how it is and nothing I can do about it? As it is a company scheme, I cant get the benefits of this company scheme if I go out and set my own up?
 
So had my meeting, guy was all over the place, had to correct his math now and again..

Turns out if you are investing less than 10k, you get charged more..
I have upped my contributions to meet this threshold so now I have a 1% mgmt charge, thats it
100% of funds are invested..
 
Isn't it possible that incurring an extra 0.1% on the
AMC while avoiding the 0.8% charge on each contribution will result in you paying more in charges in the long run?
 
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