PRSA Broker after Leaving A Job

Hi Folks,

My company (currently) don't have pension benefit. They facilitate PRSA (without employer contribution) - as required by law. The broker assigned to open PRSA account and have pension deduction at source is extremely slow and incompetent. I don't have choice, I will have to deal with this broker for now.

I am wondering what will happen after I leave this employer: will I have to deal with the same broker?

If yes, are there any fees to the broker other than AMC (the broker said my employer pay them to manage PRSAs for them)?

Thanks!

This scenario is something of a ruse in that an employee can set-up his or her own PRSA and get the tax relief coded into his or her tax credit certificate.

@Gordon Gekko, can you explain that please? What is the "ruse"? That makes it sound dodgy. Is that what you mean?

Info_Seeker said:

I am wondering what will happen after I leave this employer: will I have to deal with the same broker?

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No.

PRSAs are portable; you can carry your PRSA from job to job or transfer it to another PRSA provider without any charge or penalty.

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Info_Seeker said:

If yes, are there any fees to the broker other than AMC (the broker said my employer pay them to manage PRSAs for them)?

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You'll need to read any documentation from your employer and their PRSA provider carefully to check for details of things like annual management charge, any intermediary fees, allocation rate etc.

Standard PRSA charges are capped at 1% annual management fee and 5% on contributions (i.e. 95% of your contributions are actually invested) but that wouldn't be a great deal these days. You should ideally be aiming for 1% or even less AMC and 100% allocation rate and no other charges.
See here for illustrative charges for one execution only PRSA provider:

ClubMan said:

@Gordon Gekko, can you explain that please? What is the "ruse"? That makes it sound dodgy. Is that what you mean?

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The ruse is that the poster needs to deal with that PRSA provider in order to get tax relief through payroll because that’s the only one that the employer will deal with. One can set up one’s own PRSA and get the tax relief a different way, i.e. by getting the contributions coded into one’s Tax Credit Cert.

Thanks @Gordon Gekko.
So, regarding the original query...

Info_Seeker said:

I don't have choice, I will have to deal with this broker for now.

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You do have a choice and you do not have to deal with the employer's PRSA provider of you choose not to. You can set up your own PRSA with the caveat that you will not get tax relief through payroll but will have to contact Revenue yourself to arrange for tax relief to be granted.
I don't know if there's an option to get relief on an ongoing basis via adjusted tax credits or if the relief always has to be claimed retrospectively?

ClubMan said:

Thanks @Gordon Gekko.
So, regarding the original query...

You do have a choice and you do not have to deal with the employer's PRSA provider of you choose not to. You can set up your own PRSA with the caveat that you will not get tax relief through payroll but will have to contact Revenue yourself to arrange for tax relief to be granted.

How to claim the tax relief

This page outlines how to claim tax relief on pension contributions

www.revenue.ie

I don't know if there's an option to get relief on an ongoing basis via adjusted tax credits or if the relief always has to be claimed retrospectively?

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The employer only has to deal with the appointed PRSA provider in respect of running it through payroll.

What Gordon is saying is that you can have your tax credits adjusted to reflect the fact that you are making pension contributions. The contribution comes from your net salary but due to having higher tax credits, you net salary is higher. The net effect is the exact same as having it taken through payroll.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Steven Barrett said:

What Gordon is saying is that you can have your tax credits adjusted to reflect the fact that you are making pension contributions. The contribution comes from your net salary but due to having higher tax credits, you net salary is higher. The net effect is the exact same as having it taken through payroll.

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Thanks @Steven Barrett - that's the bit that I wasn't sure about.

ClubMan said:

Thanks @Steven Barrett - that's the bit that I wasn't sure about.

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Yes, you can get the same outcome/net pay, just a different way. The key element is the lack of an employer contribution. What you can’t do is set-up a PRSA elsewhere and get the employer contribution.

The broker that set up the PRSA Scheme does not have dominion over the scheme.

The OP can:

• Complete a new application, with the same provider, using a different intermediary, and ask that the provider replace the old policy with the new one. The provider just allocates the debit they collect from the employer account to the new policy. The employer doesn't have to sign off on this as (in this case) they are not contributing to the policy. Tax relief at source.
• Complete a new application, with a new provider, using a different intermediary, and pay it from their own bank account. PRSA1 Certificate is issued and OP can upload it via My Account immediately and Revenue adjust tax credits/grant tax relief.

Even if the employer was contributing, there is nothing to stop an employee asking them to replace a policy, with the same provider, if (say) they found better terms elswhere. It costs the employer nothing in time or money to do this as the provider will just be debiting the employer account for (say) €500 pm for policy A with them as opposed to policy B.

Where an employer may have an issues is where there is more than one intermediary selling the product to the employees i.e. actively canvassing employees on employer time because the employer is obliged to give the empoyee time to set up a PRSA.

Thanks @ClubMan @GSheehy @Gordon Gekko @Steven Barrett