Discount/execution-only pension options

Sarenco

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I’ve removed the winky face as that came across far more conspiratorial than intended :). However the perception was that the pension provider might be annoyed that the existence of this ‘direct’ model was being advertised.
You might as well go the full hog and tell us who the insurer is.

100% allocation, 0.75% AMC and zero policy fees - right?
 

Zenith63

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You might as well go the full hog and tell us who the insurer is.

100% allocation, 0.75% AMC and zero policy fees - right?
Yes and the provider was Zurich. Rang the number on their site, spoke to a very helpful chap on the phone who answered lots of my questions, met him at the Zurich offices in Blackrock to sign the paperwork, money was flowing into the plan within a couple of weeks, now have a nice dashboard where I can login and see premiums paid and the performance of the various funds I chose.

Just want to say again though that I had a strong idea of what I wanted, but I can very much see the value of proper advice when it comes to pensions. The concern I had as I met some brokers and researched this was the trivialising of the trailing fees that brokers earn and how quiet some of the cheaper options are kept. And here if I ran a business in this area I'd so the same thing, but there are certain areas where consumers need extra protections and pensions is one of them imho.

Edit: Apologies there is a €3.50 policy fee per month. But over the lifetime of a 30-40 year pension that is peanuts, if you can get your AMC down by even 0.01% (so 0.75% to 0.74%) you are saving money by paying that €3.50 every month on a €1m pension pot.
 
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gnf_ireland

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100% allocation, 0.75% AMC and zero policy fees - right?
Is this considered a great deal on pensions contributions ? Its one of those things which is very hard to compare without knowing what others are on. Are there other conditions applied to the policy - for example exit penalties for leaving within the first 5 years etc, or restrictions on the available fund choices (I know Zurich has access to funds which have a premium applied to them).
I assume this was for regular pension contributions and did it have a minimum contribution amount?

Can I ask if it also included a transfer of an existing pension into the policy, as its likely that may influence considerations as well?

I am just (selfishly) trying to assess the deal I got off them 3 years ago in terms of competitiveness :)
 

Sarenco

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Is this considered a great deal on pensions contributions ?
Well, it wasn't my title - I've suggested a change to the Mods.

But I did ask the Mods to split this out into a separate thread because I think it's worth highlighting.

A PRSA with 100% allocation, 75bps AMC and no policy fees - I haven't come accross a better value PRSA.

Whether or not a PRSA offers the best value pension product is an entirely different question...
 

Sarenco

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Hi @gnf_ireland

Long time, no hear.

Would you be willing to share the terms of your own pension contract with us for comparison purposes?

I don't see anything remotely selfish about seeking out the most competitive deal for any product or service.

Surely that's how market capitalism is supposed to work, no?
 

gnf_ireland

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@Sarenco yes it has been a while. Not as active on the site these days - life just got a bit busier I guess

Yeah, I have no issue in sharing certain levels of detail on the pension contract I have.

Executive Pension with Zurich, via a broker set up in 2016
Regular Contributions have an AMC of 0.75%, 100% allocations and no other charges other than 8 euro a year to Pension Board. Exit charges of 5-1% over a 5 year period
Balance transferred in has an AMC of 0.5%, 101.5% allocation with no other charges. Exist charges are 4-1% over 4 years

I am sure there is better out there, but that is the deal I got at the time, comparing against 3 different brokers !


Feel free to offer the same detail back in return :)
 

Sarenco

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@Sarenco Feel free to offer the same detail back in return :)
Happy to do so.

Personal pension, 99% allocation on new contributions, 0.4125% AMC (I appreciate that looks odd), €150pa policy fee.

I also have a smaller BOB, AMC of 0.75%, no policy fee.
 
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Sarenco

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@Sarenco yes it has been a while. Not as active on the site these days - life just got a bit busier I guess

Yeah, I have no issue in sharing certain levels of detail on the pension contract I have.

Executive Pension with Zurich, via a broker set up in 2016
Regular Contributions have an AMC of 0.75%, 100% allocations and no other charges other than 8 euro a year to Pension Board. Exit charges of 5-1% over a 5 year period
Balance transferred in has an AMC of 0.5%, 101.5% allocation with no other charges. Exist charges are 4-1% over 4 years

I am sure there is better out there, but that is the deal I got at the time, comparing against 3 different brokers !


Feel free to offer the same detail back in return :)
 

Zenith63

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A PRSA with 100% allocation, 75bps AMC and no policy fees - I haven't come accross a better value PRSA.
Just to be clear, my pension (brokers quoting 1.25%, same plan direct from Zurich at 0.75%) is an EPP, not a PRSA.
 

GSheehy

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Just to be clear, my pension (brokers quoting 1.25%, same plan direct from Zurich at 0.75%) is an EPP, not a PRSA.
In the interest of further clarity: i) Was there a minimum contribution level eg €30 per month and ii) Are there exit penalties on your contract iii) Policy Fee?
 
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SPC100

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FYI - It looks like Zurich does have a .75% 0% contribution charges product - from The current version of the authority's PRSA excel sheet

Zurich PRSA -- RFAJ Regular - Individual 0% (Contribution) 0.75% (amc)
(APP/J/369/S)

They have about 100 products listed and maybe 4 of them are at .75%

Now how you access it is a different story...
 

GSheehy

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I had a chance to look at the mythical (EPP) pension product pricing structure that's the subject of this post.

It's of paramount importance that all the information is made available so that the folk that read these posts can make an informed decision.

  • The minimum contribution is €30 per month
  • There is a policy fee of €3.50 per month
  • There is a Pension Authority Fee of €8 pa
  • There are reducing early surrender/transfer charges in the first 5 years of 5%, 4%, 3%, 2%, 1%
  • You can buy it with 100% allocation and 0.75% AMC ( on the Matrix Range of Funds) - I doubt too many are 'sold'.
  • The Director of the Company is the Trustee - IMHO the rules on this will change and Directors will have to appoint (and pay for) external Trustees or pay the provider for that service. Or, revert to a PRSA.
You can buy the above without the policy fee and surrender/transfer charges, and with the cost of Trusteeship included, via an execution only/discount broker website on the following terms i) 100% allocation and 1% AMC or ii) 100% allocation and 0.75% AMC if the contribution is €500pm or more.
 
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gnf_ireland

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@GSheehy out of curiosity, what would you consider to be a 'good deal' for an Executive Pension and/or PRSA?

I appreciate everyone has different levels of pension pots and contributions, but as a general rule of thumb....
 

Blackrock1

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@GSheehy out of curiosity, what would you consider to be a 'good deal' for an Executive Pension and/or PRSA?

I appreciate everyone has different levels of pension pots and contributions, but as a general rule of thumb....
i think the point is you get a better deal at >500 pm via a broker
 

Zenith63

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I had a chance to look at the mythical (EPP) pension product pricing structure that's the subject of this post.

It's of paramount importance that all the information is made available so that the folk that read these posts can make an informed decision.

  • The minimum contribution is €30 per month
  • There is a policy fee of €3.50 per month
  • There is a Pension Authority Fee of €8 pa
  • There are reducing early surrender/transfer charges in the first 5 years of 5%, 4%, 3%, 2%, 1%
  • You can buy it with 100% allocation and 0.75% AMC ( on the Matrix Range of Funds) - I doubt too many are 'sold'.
  • The Director of the Company is the Trustee - IMHO the rules on this will change and Directors will have to appoint (and pay for) external Trustees or pay the provider for that service. Or, revert to a PRSA.
You can buy the above without the policy fee and surrender/transfer charges, and with the cost of Trusteeship included, via an execution only/discount broker website on the following terms i) 100% allocation and 1% AMC or ii) 100% allocation and 0.75% AMC if the contribution is €500pm or more.
Mythical?

FYI Zurich will act as trustee for €5 per month which is (currently) waived.

Out of interest I thought I'd do a very rough calculation of the fees for these various options so people can compare them. Assuming €1000 p/m contributions over 35 years, 5% growth p/a, which takes you to a pension pot of about €1m -
  • Original pension I was offered via a broker (1.25% AMC, €3 p/m plan fee) (there was also a 2% "initial" fee which I have not factored in as I don't know how it is applied) - €181k in AMCs and fees
  • Direct with Zurich (0.75% AMC, €3.50 p/m plan fee)- €109k
  • Execution-only discount broker option 1 mentioned by GSheey - €144k
  • Execution-only discount broker option 2 mentioned by GSheey - €108k

@GSheehy - Can you share who the execution-only broker is please?
 

gnf_ireland

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i think the point is you get a better deal at >500 pm via a broker
Fair enough, but what is considered a good deal via a broker?
When I moved mine in 2016, I got 3 different brokers to give me a quote and to be honest ranged a good bit. I eliminated the most expensive and asked the remaining two what was the best they could do (last opportunity with best and final offer), as otherwise they would be eliminated. Both provided better deals and I eliminated the worst of the two.

The eliminated one said they could do better, and I asked why they had not given their best one in the last offer !
Its not necessarily a race to the bottom, but its very difficult for people outside the industry to get an idea of what others pay for pensions - and over a 30-40 year window, the prices can rock up !
 
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