Director's pension I no longer contribute

L

Lucuma

Registered User
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Hi there, I have a director's (private) pension that I no longer contribute to. I'm deeply unhappy with the amount of fees the company that run it have taken out of it over the years and I would like to end it/cash it in/convert it to something else. Are there any options for me? I really need the money at the moment as well!
 
If you are over 50 and no longer involved in that company, you can access it. If you are under 50/ still involved with the company, you can't but you can move it to another pension.

What percentage are you paying as an annual management charge?


Steven
www.bluewaterfp.ie
 
They have taken 250 - 300 euro per year out of it the last few years (the pension has a value of approx 40,000)
A few years ago I made a lump sum payment of 18,000 into it and they took 5000 as fees! I'm not joking........ I threatened them with the Pensions ombudsman and they reinvested some of the 5000
 
The annual management charge is 0.75% which is about standard. That pays for the company to hold your investment, administer your policy, pay for light & heat, staff, compliance etc. €300 a year isn't that much.

The €5,000 deduction from your lump sum was probably deducted as a commission payment and paid to the advisor who set up the policy. For regular payment premiums (paid monthly, quarterly or annually), the commission can be up to 25% of the contribution (it used to be up to 60%). I would guess that is what the big deduction was for. I have never seen an insurance company deduct €5,000 in charges up front for anything other than commission payments.


Steven
www.bluewaterfp.ie
 
The advisor who set up the policy no longer works for them. He was charged in court with fraud and theft and was dismissed from working with them. So I don't know who the money would have gone to, the person who took over managing my account from him I assume? I asked for clarity on the management fee and was told this: ''The management charge is 0.5% and you are also paying a policy fee. The RIY to age 65 is 0.6%''
What is RIY? I assume this means my total fee is 1.1%
 
RIY =reduction in yield. It's the average amount that the growth in the fund is reduced to cover charges. RIY of 0.6% is fairly reasonable. And you will find it hard to do better than 0.5% management charge.
Sounds like the 18k was set up as a regular premium and not a single premium.

If you do decide to move the pension it has to go to another revenue approved pension so you probably have to start paying a premium on the new plan.

You should get lots of quotations first on what existing plan will be worth at 65 if left as is, if premiums restart and from new pension on estimated fund if transfered in.
 
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