PRSA and commission

You mean that in return for making higher contributions, the charging structure has changed as follows:

99.2% allocation rate, 0.8% charge, has been revised to 100% allocation.

The 0.99% AMC has been increased to 1.00%

Is that the case?
 
@Protocol Yep that seems to be the case
@ClubMan sorry dont know what you mean?

But going from .99% to 1% is only a .01% increase, not .1%, makes a huge difference

For example if you are putting away 700pm, with an allocation of .8% = €67 approx per year
Whereas going from .99% to 1% on say 100k (I have no wehere near this yet) is just €10 per year
So I am better off, am I right?
 
Last edited:
colin44 said:
@ClubMan sorry dont know what you mean?
Click to expand...

PRSA and commission

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...
www.askaboutmoney.com
 
colin44 said:
But going from .99% to 1% is only a .01% increase, not .1%, makes a huge difference
Click to expand...
That's 0.01% on the full value of your fund every year. That could add up to a lot. And, in particular, it could add up to more than paying a once off charge on each contribution.
colin44 said:
So I am better off, am I right?
Click to expand...
Without running the numbers for the two charging scenarios over the likely investment timeframe based on some assumed annual growth level it's difficult to say.
 
Well we do have the figures!

Based on this example, I am way better off?
For example if you are putting away 700pm, with an allocation of .8% = €67 approx per year
Whereas going from .99% to 1% on say 100k (I have no where near this yet) is just €10 per year
My fund would have to reach over 670k to be paying €67 extra a year (@ .01% increase)?

My fund ATM stands at 9k, so .01% of the equates to 90 cent per year, which is better than the current €67 allocation rate of .8% per year?

Is this correct, or am I missing something?
 
I'm genuinely trying to figure out if my above figures are correct, or if Im oversimplifying it, or missing something?
 
You are looking at it too simplistically. You'd need to model it over several years using the total fund increasing with contributions and some assumed growth figure in order to see the overall impact of the two charging structures. You'd probably need to do this in a spreadsheet.
 
Ok thanks, I think I get it, however I think you are being overly pessimistic.. .01% represent 1/10,000 of each years fund value.

It will be many many years before this overtakes the other charge, as I will be paying tthis fund for the nxt 13yrs approx then I will retire

Fund value estimated to be 250k when retire, so a .01% charge only equates to 25 euro well below the 67 per year I currently pay in the other charge.. ?

Is that correct, or am i
Missing something again?
 
Last edited:
You could be right, but if it was me I'd be looking to sanity check any assumptions. The calculator here may assist:

Pension charges calculator

I've been comparing the PRSA offerings from different providers recently and haven't found a way to easily compare the impact of the various charges applied i.e. all other things being equal, is a PRSA with 0.5% annual management charge (AMC) and 90% allocation better than one with 1.5% AMC and...
www.askaboutmoney.com
BTW even 0% on contributions and 1% AMC isn't necessarily competitive and an even lower AMC should be possible for an execution only/no advice PRSA. E.g. 0.75% or even lower isn't unusual these days.
 
@colin44 - You mention that you have an Irish Life Complete Solutions Standard PRSA 1.5. I'm familiar with this product and I think some of the information you've posted above is wrong. I've cut and pasted the table below from Irish Life's own brochure and it's consistent with the idea that your entry charge is eliminated above €10,000 per year. If you were previously paying more than €5,000 but less than €10,000 I suspect that you were being charged 0.75% of each contribution (i.e. 99.25% allocation rate).

1738938203280.png

On the annual charge, from the same booklet...

1738938370990.png

On their Standard PRSA product the annual charge is 1% regardless of your contribution so I suspect this hasn't changed. I'm not aware that Irish Life ever had a 0.99% annual charge on PRSAs.

Can I suggest that you ask the broker to confirm the "before and after" charges for you in an e-mail? There should only be two: a charge on each contribution and an annual charge on the overall fund.
 
@ClubMan thanks, i dont have much of a choice tho as Im with a company plan..
@LDFerguson Thanks will ask broker then

So the AMC is charged by month, not every year, so this would change things alot! an awful lot!

Thanks for all the replies lads, difficult to get your head around all of this as a novice!
 
colin44 said:
So the AMC is charged by month, not every year, so this would change things alot! an awful lot!
Click to expand...

The monthly collection of the 1% annual charge doesn't change things drastically. Each month it's 1% / 12.

If it was charged as 1% of the fund at the end of a year it would be worse for you as the fund should be at its largest at the end of the year, because you've made 12 months contributions into it. By charging it as 1% / 12 each month this effect is smoothed out.
 
@LDFerguson good to know, thks for explaining..
@ClubMan with the company plan, I get an additional 10% contribution of what I contribute, from employer

Now the question is, is that additional 10% better that reducing the charge from 1% to .75%? :) if I go out on my own?

my head is spinning!
 
colin44 said:
Now the question is, is that additional 10% better that reducing the charge from 1% to .75%? :) if I go out on my own?
Click to expand...

The 10% employer contribution is easy to calculate. It's 10% of whatever you're putting in.

The 0.25% annual reduction in charges is 0.25% x your fund value, per year. But it's harder to evaluate because your fund value should be going up each year. You'd need to model it on a spreadsheet between now and when you retire.
 
You must log in or register to reply here.
Back
Top