Woeful Fund Performance

CharlieMac said:
Can I ask would it cost this OP anything to switch their fund to another pension provider? Do pension funds sill have entry and exit charges on transfers?
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If it's an AVC rather than an AVC PRSA, then as @GSheehy says, there's a requirement at the moment for a Certificate of Benefits Comparison to transfer to an AVC PRSA. This costs around €1,200 + VAT.

On an AVC there's no restrictions on charges, exit penalties etc. So there might also be a charge on the fund for transferring out. You'd only find out by asking. (An AVC PRSA has regulations around what can be charged and you cannot be charged for transferring out.)

A possible workaround would be to start a new AVC PRSA for future contributions but leave the existing fund where it is. I'd ask IPF to confirm what the ongoing charge on the fund would be in that scenario. If it's 0.75% per year and nothing else then it would be okay.
 
Seems clear in most cases public sector workers should be making AVCs in to a PRSA AVC. But as I've discovered there are certain retirement options only available to them if their money is in an AVC. I wonder are there charges to transfer a PRSA AVC in to an AVC? Still no exit charge if transferring from that to an AVC?
 
As Protocol suggested this is IPF response....
They seem to be telling me only 95% of my contribution each month is allocated?

'Oh sorry I was looking in the wrong place on my system - my apoliges for the mini heart attack!
Yes your policy is active and ill email you over a statement for your records now

In regards to charges/ allocation, the only AVC plans to have then set up through your payroll is through IPF (0.75% annual charge + 95% allocation)
Or to move to Corn Market who are the other providers of the group AVC scheme. I'm unaware of what their charges are so I'm afraid I can't confirm them.

The alternative we looked at a few years ago was a PRSA AVC which can get up to 98% allocation, but it has a higher annual charge usually.

The policies that offer 100% allocation and have a lower annual fee are generally self managed meaning you either manage the policy yourself, or you would pay a broker directly if you needed advice for its management / at your retirement claim stage'
 
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Sunnygirl69 said:
Does this make sense to anyone?
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Yes. The allocation rate for contributions is 97% when paid in. So the allocation charge is 3%. That charge is only applied to incoming contributions.
Sunnygirl69 said:
I would be careful when looking for higher allocation rate policies because it typically means the annual management charge is more expensive (ie 100% allocation but 1%+ annual charge)
These policies end up costing more in the long run'
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This is not necessarily true. 100% allocation rates and sub 1% AMCs are not difficult to find these days.

The charges mentioned earlier are awful.
Sunnygirl69 said:
OK so they replied to me today.
My allocation rate is 97%
Fund management charge pa is 0.75%
Monthly policy fee is €3.81
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As Protocol & some others suggested, I asked IPF for higher allocation. This is their response. Seems like even worse deal for me....

'Oh sorry I was looking in the wrong place on my system - my apoliges for the mini heart attack!
Yes your policy is active and ill email you over a statement for your records now

In regards to charges/ allocation, the only AVC plans to have then set up through your payroll is through IPF (0.75% annual charge + 95% allocation)
Or to move to Corn Market who are the other providers of the group AVC scheme. I'm unaware of what their charges are so I'm afraid I can't confirm them.

The alternative we looked at a few years ago was a PRSA AVC which can get up to 98% allocation, but it has a higher annual charge usually.

The policies that offer 100% allocation and have a lower annual fee are generally self managed meaning you either manage the policy yourself, or you would pay a broker directly if you needed advice for its management / at your retirement claim stage'
 
Is that the verbatim response from them? If so it's shockingly badly composed.

As several people have said you probably need to see what, if any, charges or certificate of benefit comparison apply if you choose to transfer this policy out to somewhere with better charges.

And maybe park this one now and set up a better value (PRSA?) AVC elsewhere for future contributions.

Seems to be that all relevant advice that can be given in this context has been posted already. It's up to you to consider it and act as you see fit.
 
I would say it is lack of knowledge of differences in fees/allocation rates etc - most people probably just look at the tax relief they are getting, which is the same no matter the fund. So on the face of it, it is easier to let payroll take care of it and not bother with a tax return. The fact that people are making AVCs at all is a good thing! But like mortgages, the more you know, the better a deal you can get for yourself.
 
FWIW I have the same policy with New Ireland as yourself (with the same targeted retirement dates) and my gain (for approximately the same investment as yourself) is €4k gain of premiums contributed over value (or about 8% return). Even though I've held the AVC for over 15 years, I've contributed most of that sum within the past 3-4 years so the 8% is based on a growing sum from a relatively small base investment.

Incidentally not only are NI hard to contact but their website is also pretty scanty about the information available (my next premium contribution date is showing as >2 years ago!). This thread has provided food for though though regarding IPF and their fees so it's something I might have to look into further
 
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