What Type of Pension Should I Get

C

curiosity00

Registered User
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Hey,

I'm 29 and earning about €50,000 pa. My employer doesn't run an occupational pension.

I want to know what type of pension should I take out: a PRSA or PPP (personal pension policy) or something else again?

Advice on with whom also welcome?

Is it worth getting a broker on board.

What are the fees likely to be for whatever pension/s you are recommending?

What is the broker getting - and do brokers get more commission from some companies than others - if so which and how much?

And what, crucially are the downsides of whatever you are recommending?

Links to documents etc. most welcome.

Thanks
 
You can't set up a Personal Pension (basically because you're an enployee rather than self-employed).

So the PRSA is the way to go.
 
Yes he can, he's in non pensionable employment.

It comes down to fund choice and charges. Personal pensions are more flexible than PRSAs.

As to whether you want to use an advisor or not depends on whether you know what you are doing. If you need advice on contract structures and investment strategy, use an advisor. If you can do it yourself, do a DIY.

A big advantage of an advisor is they are that second opinion, stopping you doing something stupid (like selling when the markets are falling) or pointing out flaws in an investment strategy (I've lost count of the amount of times people thought they were diversifying by investing in a number of funds that were more or less the same).


Steven
www.bluewaterfp.ie
 
You're right. I've just always thought a PRSA would be better because the employer could start contributing and because the employee could access it earlier.
 
Most people aren't in a position to retire at 50 anyway. Drawing down your pension at that age usually ends up with a fund being depleted early. Also, as the fund is being drawn down early, the pot is usually quite small, meaning a large proportion of it is stuck in an AMRF, so only 4% can be accessed each year.


Steven
www.bluewaterfp.ie
 
An employer can't contribute to personal pension plans. There is no cap on fees either.

In my opinion most people are best off with one of the cheap PRSA available (Zurich/Irish Life via LA Brokers or Davy Self Direct).


http://www.consumerhelp.ie/personal-pension-prsas
Transfers from PRSAs and Personal Pension Plans
Transfers can be made from a PRSA to:

  • Another PRSA. PRSAs must allow transfer to another PRSA without penalty
  • An occupational pension scheme of which the individual is a member
  • An overseas pension arrangement provided certain conditions are met
Transfers can be made from a Personal Pension Plan to:

  • Another Personal Pension Plan at any time
  • A PRSA if the life company operating the Personal Pension Plan is agreeable.
Click to expand...

So for me the PRSA is more flexible from my point of view.
 
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The cap on fees is the structure you signed up for at the beginning, the insurance company can't change them.

The management charge on PRSA's is higher than most personal pension plans. The difference over the lifetime of a pension plan can be huge.

Whether an employer can contribute is a moot point, the OP said their employer isn't contributing.


Steven
www.bluewaterfp.ie
 
Current employer - most likely there will be several future employers. You can move your PRSA to an occupational scheme with a future employer (or abroad should the pension levy come back). That flexibility I am not aware is available with a personal pension plan.
If you move your PRSA later in life to an occupational scheme a future employer is offering, in most cases the employer is covering the charges of the occupational scheme...


Is there an overview of costs of persional pension plans (including policy fees and comissions) somewhere available?
I only saw so far persional pension plans with low fees where you put very significant amounts in it.
 
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It's not that difficult to move a personal pension plan. Nor is it a problem to have more than 1 pension (I currently have 3).

There are 30+ different personal pension contracts in the market at present. Within them, they all have different charging structures, so it is near on impossible to construct an understandable matrix of charging structures. As an advisor, I just discount the ones that are poor value and pick ones that represent good value. When a new contract is introduced, I analyse whether it is better than the ones I use, if not, it gets discarded.

Steven
www.bluewaterfp.ie
 
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