Buy out bond or stay in occupational scheme

B

bobinvest

Registered User
Messages
16
Hi All

I have a pot of about €110k from a previous occupational pension scheme which is sitting with Irish Life. It's in their 'Indexed World Equity Fund' and the AMC attached to it is 0.55%.

I am planning on moving this to a buy out bond through Royal London on execution only basis at an AMC of 0.45% in a similar indexed fund. It seems like a no-brainer to me as it gives me more control over that pot and allows me to access cheaper rates.

Is there any downside of moving the money from the occupational scheme to a buy out bond? I have 30 years to retirement if that is relevant.

Thanks
 
Can't see any downside here assuming that the former/paid up occupational scheme is a defined contribution scheme and by transferring to a BOB you don't lose out on any guaranteed benefits from the occupational scheme.

Edit: oh, might you need to get a certificate of benefits comparison in this case which could cost a few grand?

Edit 2: COBC only applies to a transfer from an occupational scheme to a PRSA.
 
I can only see upsides here - no reliance on the occupational scheme trustees decades down the line, lower AMC, qualification for the discretionary Royal London Ireland ValueShare bonus next year etc.
 
The only thing is, you'll need to make sure the trustees of the scheme correctly complete the PRB application to show your dates of service and you'll want to keep evidence of your salaries from that employment. Stops things from getting difficult at draw down.
 
JimmyB99 said:
I'm just wondering how you secured such a competitive deal?
Click to expand...

Personal Retirement Bond (PRB) - Royal London IE

Here you'll fine information about our Personal Retirement Bond (PRB) product. This is also sometimes called a Buy‑Out‑Bond. It's an individual pension bond established in your name, that receives a single contribution into it, usually as a transfer payment from your current or previous pension...
www.royallondon.ie

Customer Support - Royal London IE

You don’t need an excuse to give us a call or send us an email – sometimes it’s nice just to chat. But if you do have something specific in mind you’d like to talk to us about, we’re only a phone call or email away in Dublin, to help you in any way we can...
www.royallondon.ie
See also this thread - the title mentions PRSA but it deals with other pension products too.

Probably the best (cheapest) PRSA in the world?

The launch of Royal London Ireland's new pension product in late November 2024 seems to have finally offered customers accessible, lost-cost PRSAs. Through an execution-only broker, it is relatively easy to access a passive fund AMC of 0.55% or significantly lower on larger transfers. Taking...
www.askaboutmoney.com
Some (or all?) of the following offer execution only services and deal with RLI:

Ferguson and Associates

Pensions (including Self Administered) Life Assurance - Income Protection Savings - Investments
ferga.com

PRSA Ireland | PRSA.ie

Low Cost Pensions Ireland Zurich LIfe The Value Pension Website Execution Only PRSA AVC PRSA Pensions www.prsa.ie
prsa.ie
 
Thanks @ClubMan

Where does it say which execution broker to contact to achieve a total charge of 0.45% (for Indexed Intl Equity) as per the OP? I'm not seeing it - I hope that's because I'm blind!
 
JimmyB99 said:
Where does it say which execution broker to contact
Click to expand...

Find a Financial Broker - Royal London IE

A broker provides impartial advice on a number of financial services and products, ranging from life cover to serious illness cover, pensions, investments, and more.
www.royallondon.ie
JimmyB99 said:
to achieve a total charge of 0.45% (for Indexed Intl Equity) as per the OP? I'm not seeing it - I hope that's because I'm blind!
Click to expand...
It's not any special deal - it's their standard pricing.

PRB Customer Charges - Royal London IE

Transparent PRB Customer Charges
www.royallondon.ie
 
@JimmyB99 - I contacted two of the brokers @ClubMan mentioned in his post - ferga.com and prsa.ie. Some slight variation in pricing so best to check with at least two of them.
 
Last edited:
@JimmyB99 - yes that's the total fee although I think there may be a miniscule additional fund charge of about 0.01% on top of that. The overall price is probably based on the fact that its a lump sum of €110k. Suspect you wouldn't get that price for say €10k fund.
 
JimmyB99 said:
What I'm trying to understand is which broker allows you to access this so that the total charges are 0.45%?
Click to expand...
In many cases brokers are remunerated by the underwriter via trailing commissions that are basically a cut of the AMC.
 
100% allocation with an AMC of 0.45% for a €110k single transfer is certainly very good value in an Irish context.

Like @JimmyB99 I would be very interested to know which execution-only broker offers that deal.
 
@Sarenco - do we take the silence as an answer? The claim seemed unlikely - without evidence, I remain to be convinced!
 
Last edited:
There is no margin for an execution only broker to provide an AMC of 0.45%. Unsure if Royal London deal directly with clients and perhaps they provide these terms directly
 
@JimmyB99 my message at 3:17pm yesterday lists the two brokers to try on this. I have been offered this and am working through the application form. Believe whatever you like.
 
Why don’t you just tell us what broker offered you this deal?

Why the cryptic responses to a straightforward question?
 
Royal London
ARF and PRB

  • Single Contribution - Minimum €100,000
  • PRB Minimum Term to Normal Retirement Age is 5 Years
  • ARF Maximum Age at entry for ARF is 75.
  • No Entry or Exit Charges and No Policy Fees
  • 100% Allocation. (A 99% allocation may apply to some ARFs)
  • Blackrock Developed World Equity Index Fund (Article 6)
  • AMC is 0.60% on 8 Index Funds (Active Funds AMC is 0.65%)
  • Lower AMCs available depending on age, value and accepting early encashment charges.
  • Intermediary remumeration included in AMC pricing
  • NB: The Funds Other Ongoing Costs and Portfolio Transaction Costs are included in the fund performance figures on the Royal London website. AMC is not.
This is an extract from execution-only.ie run by Ger Sheehy, perhaps 0.45% is available with exit penalties?
 
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