Choosing a PRSA for a New Employer

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Beau&Jodie

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I am moving to a new employer and this is the first time I was not in an occupational scheme. The new company is UK based and is paying me through a payroll company. The payroll company recommended a broker who is setting me up with a Zurich pension.

I have done a lot of research over the last few days and I am coming to the conclusion that if I had done some extra research earlier I could have gotten a better provider such as LAbrokers. It looks like there is a 5% contribution charge and 1% Annual charge with this Zurich pension. I need to request information around the total costs.

My new company will pay 10% and I will contribute 15% which will be a 35k contribution per year. I may also look at adding a large bonus each year. I am at the stage now where it would take a lot to reverse this decision. The question I have is should I be looking at getting out of this arrangement and into a lower cost setup in the next 12 months.

If there is any important detail I am missing please let me know.
 
Regarding your plan to pay in a large annual bonus on top ….pay attention to the Revenue limits on employee contributions which take into account your age and a capped income for calculation purposes of €115,000.
 
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Kev1964 said:
Regarding your plan to pay in a large annual bonus on top ….pay attention to the Revenue limits on employee contributions which take into account your age and a capped income for calculation purposes of €115,000.
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I am aware of the limits for my age. The broker said that the employer could choose to pay any amount into my pension. The example she gave was if I wanted 100% of my wage to go in that this could be done. I am making an assumption now that they would pay my bonus in this manner.
 
I don't believe there is anything stopping you switching your PRSA to any other provider of your choosing. Perhaps confirm that with your employer.

If it's less hassle just continue the setup process with Zurich then switch to a lower cost option in a few months? The 10% employer contribution sounds generous so that's a big positive for you.
 
It should not be a big deal to change to an execution broker.
All your pension contributions are paid directly to Zurich.

Your new broker would deal directly with Zurich and change the fees and allocation rate.

I changed brokers for my ARF. The original broker was not involved in this procedure. The new broker did all the setting up with Zurich.
 
CharlieMac said:
I don't believe there is anything stopping you switching your PRSA to any other provider of your choosing. Perhaps confirm that with your employer.

If it's less hassle just continue the setup process with Zurich then switch to a lower cost option in a few months? The 10% employer contribution sounds generous so that's a big positive for you.
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I assumed there would be nothing stopping me. I just dont want to come across as painful with a new employer. They gave me some freedom to choose and I made the mistake of taking the easy option and only doing the research now.

In terms of future pension contribution I can probably negotiate wage increases through my pension. Example 10% increase could be split 5% pension and 5% salary.

I am assuming people think paying the fees for the Zurich pension is not very sensible?
 
Beau&Jodie said:
I am assuming people think paying the fees for the Zurich pension is not very sensible?
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If you mean 5% contribution charge (95% allocation rate) and 1% AMC then those charges seem punitive and you could do a lot better. E.g.

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
 
ClubMan said:
Well, couldn't you exceed your age related tax relief percentage but you just won't get tax relief on the excess?
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Is the age related tax relief not just related to what you pay in? I am saying that they would pay more in for me.

Is there a % that a company is limited to paying in?
 
ClubMan said:
If you mean 5% contribution charge (95% allocation rate) and 1% AMC then those charges seem punitive and you could do a lot better. E.g.

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
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I do, thanks.
 
Beau&Jodie said:
Is the age related tax relief not just related to what you pay in? I am saying that they would pay more in for me.
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Yes, sorry, I didn't realise that you were focusing on employer contributions.
Beau&Jodie said:
Is there a % that a company is limited to paying in?
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Personal Retirement Savings Accounts (PRSAs)

This page gives information on Personal Retirement Savings Accounts (PRSAs)
www.revenue.ie www.revenue.ie
From 1 January 2025, there is an employer limit for contributions to an employee's PRSA. This limit is 100% of the employee's salary. Any contributions above this limit will result in a benefit-in-kind charge to the employee.
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Beau&Jodie said:
In terms of future pension contribution I can probably negotiate wage increases through my pension. Example 10% increase could be split 5% pension and 5% salary.
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The company can contribute 100% of your salary directly in to your pension fund and none of this will count toward your age related limit on how much of your gross salary you can get tax relief on making pension contributions.

In this case would it be a better choice for the OP to ask for wage increases by way of larger employer contributions to their pension?

The OP then has large scope to build up a pension fund and more quickly. Of course this choice is also determined by what their needs are for day to day spending and cost of living outgoings.
 
Beau&Jodie said:
I just dont want to come across as painful with a new employer. They gave me some freedom to choose and I made the mistake of taking the easy option and only doing the research now.
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It might be that they wouldn’t care a bit considering they’re using a payroll company to do their admin on it. It should be no skin off their nose in that case - in fact, I’d prefer my new employee to be happier that I did them a favour that actually cost me zero effort!
 
Can you simply ask for your bonus to be paid into a pension?

I thought that would be salary sacrifice and not allowed.

But I am not an expert.
 
CharlieMac said:
In this case would it be a better choice for the OP to ask for wage increases by way of larger employer contributions to their pension?

The OP then has large scope to build up a pension fund and more quickly. Of course this choice is also determined by what their needs are for day to day spending and cost of living outgoings.
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I think that is the route I will go.
 
Brendan Burgess said:
Can you simply ask for your bonus to be paid into a pension?

I thought that would be salary sacrifice and not allowed.
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If they're allowed to pay 100% of your salary surely that bonus could just be your salary (increase the % they pay in for a period). The reality is that it will be over a year before I need to worry about that.
 
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