PRSA Iris Retirement Fund

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Hi there

After 17 years in the software industry 2 years ago on redundancy I started with new much smaller ( not a pressurised coporate) employer and I am very happy there however as the company is so small ( 9 employees ) there is no occupational pension available , I am however signed up to the PRSA made available to me through an independent broker. I have a couple questions from a company point of view - my role within the company is senior and thankfully my boss does value my input - would a an occupational pension be an option - what are the costs associated with setting it up and I know we need to set up trustees which I think can be outsourced ? If pension route if not suitable for our company and we continue with PRSA is the Iris retirement fund best suited for my needs - I am 18 years away from retirement I have moderate appetite for risk. On leaving my last role I had built up a considerable pension pot and went for buy out bond with Zurich ( previous companies pension provider) Prisma risk level 3

I am contributing regular 8% avc 2 % my employer matches 8%- there is a 3% contribution charge and a 1% fund management charge

Any advice appreciated
 
How much is the PRSA and buyout bond currently worth as these can be combined into the new occupational scheme depending on objectives
 
Hi Marc

Approx €17K after 2 years , and €250k respectively ( it took a bit of hammering last statement I am hoping that it will have recovered by time I want to access 25% in 3 years)
 
Definitely worth looking into the pros and cons of consolidation vs early access at 50. I recently retired some of my pensions at age 50 and it was the best financial decision.

globalwealth.ie

UK to Ireland Pension Transfers - Everlake

This is a detailed analysis of the issues to consider if you live in Ireland and have UK pensions and or a UK National Insurance Number
globalwealth.ie globalwealth.ie

Alternatively, you could have a single member occupational scheme for yourself with unfettered flexibility and lower charges than an insurance company scheme

see our guide to tax efficient employee benefits here

[broken link removed]

calendly.com

Quick chat on Zoom - Marc Westlake CFP, TEP, APFS, EFP, QFA

Please use this link to book a time for a chat
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Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie
 
Last edited:
"there is a 3% contribution charge and a 1% fund management charge"
I would dump that PRSA plan

Setting up an Occupational Pension Plan would be to much for such a small employer
 
RedDevil said:
"there is a 3% contribution charge and a 1% fund management charge"
I would dump that PRSA plan

Setting up an Occupational Pension Plan would be to much for such a small employer
Click to expand...
Thank you, although the company has employees in other countries the Irish office is small, are there better value PRSAs available?
 
There aren't much options on the management charge, PRSA's are much more expensive than personal or executive pensions and 1% is the standard charge. You could ask your employer to pay the advisor a fee so you don't have to pay it through a 3% contribution charge. That way the advisor gets paid and you get 100% of your contribution invested. Your employer is basically offering you a pension scheme but you are paying for it.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
There is a distinction between Standard PRSA and Non-Standard PRSA.
Yours must be a Standard PRSA, they are allowed under the Legislation to charge up to 5% on Contributions and a 1% fund management charge.
DavySelect have a Non-Standard PRSA which has a 0.75% annual management charge, which I would consider excessive.
The equivalent SIPP in the United Kingdom have a charge of 0.25%.
I would be hopeful with Pan-European Pension Products coming on stream that charges will decrease.
 
RedDevil said:
There is a distinction between Standard PRSA and Non-Standard PRSA.
Yours must be a Standard PRSA, they are allowed under the Legislation to charge up to 5% on Contributions and a 1% fund management charge.
DavySelect have a Non-Standard PRSA which has a 0.75% annual management charge, which I would consider excessive.
The equivalent SIPP in the United Kingdom have a charge of 0.25%.
I would be hopeful with Pan-European Pension Products coming on stream that charges will decrease.
Click to expand...
Thanks Red Onion I rather act on what’s available now than make speculative decisions on what might be a better option in the future
 
RedDevil said:
I would be hopeful with Pan-European Pension Products coming on stream that charges will decrease.
Click to expand...

It is unlikely that there will be a PEPP in Ireland this year. Not sure how much interest there would be in the product here.

"Cost-efficiency is also one of the major goals for the success of the PEPP. In case of the Basic PEPP the annual cost will be limited to 1% of the PEPP saver’s accumulated capital at the end of each year. The Basic PEPP – the core or default investment option – has been specifically regulated to offer a relatively high level of capital protection, which can be further extended to a capital guarantee. The cost of providing that guarantee is excluded from the cost cap but must be expressly disclosed. "

Gerard

www.prsa.ie
 
Going by the Pension Reform Report and other papers that have been issued previously, you can expect higher charges in the future, not lower ones. The recommendations are to reduce the number of different pensions and use the, much more expensive PRSA structure instead. I can't see the auto enrollment scheme being any cheaper either as the IT infrastructure investment for this is going to be huge and it will take them a long time to recoup these costs, even at a 1% amc on the small premiums that they will be taking in. Add in the Pensions Authority is looking for more influence (the authorise PRSAs but have no control over personal pensions), there will be additional costs to pay for their additional levels of supervision. Currently they charge members of company schemes €8 a year (I think) and 0.05% of the amc on a PRSA.

Using executive pensions, personal pensions and buy out bonds are all much cheaper ways of running your pension than PRSA. They will mostly be gone in the future.

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