Help! Advice Needed by Company Director

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cossieh

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Hi,

I am one of two company directors - in a company that started trading April 2007. We are the only shareholders

We have had a good year comemrcially and as I have never before made pension provision (mix of sole trader and PAYE), we have decided to set up an executive pension plan.

I am looking to commit 60k of profits to kick it off this year and would be hopeful of being in a position to keep up this level of contribution in future years.

I have had advice from a few quarters and am currently examining a recommendation for a mixed managed fund, where 1% management and admin charge applies. Net allocation is 99% (net of all entry charges)

I am now a bit confused and have a few Qs on which I'd really appreciate informed advice

1. What will these charges actually mean in pounds and pence if I put in 60k per annum
2. what are the arguments for a managed fund over a self administered fund, which someone initially suggested to me? is there a case for me to look at self-administered options?
3. my own accountant has advised me to simply keep all money 'in cash' for the next eighteen months until things settle with equity and property markets. is this advice sound? is it possible within a pension framework?
4. in the long term, is there any great difference between the performance of different pension providers? basic internet research suggest to me that the firm recommended to me has not performed well in recent years.

all advice on these questions - or just generally would be hugely appreciated

cossie
 
cossieh, welcome to AAM. Firstly you have not mentioned what age bracket you are in - this is important for the purpose of setting up a Pension scheme. Next thing in part your Accountant maybe somewhat correct. I would take a view that if this is a long term thing, assuming you are young, now would be a good time to invest in Managed Funds -- get in when the markets and all that. I do believe that you would be better getting a book on the entire pension benefits, especially the Tax angle for investing in markets and also in property. In fact a decent untied broker should be able to advise you. Regarding investing in Funds, I am also aware that past performance should not be used to base any investment structure or decisions. However the performance of AIB funds have performed poorly, but Eagle Star and New Ireland have a relatively good past record, allowing for the matter that New Ireland funds are managed by BIAM who in the recent past have had their own troubles. What part of the country are you in ? Might be able to recommend a decent agent. I have no connection whatsoever. In fact don't even have a pension as I am self employed and the manner I do my affairs is somewhat different.
 
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If you wish I will give you the name of an broker who might be able to assist you. He is an agent for most of the Financial product institutions and knows the run of the Pension legislation. Old fashioned but what one needs if investing for the long term. Based in Templeogue, I started using him over 15 years ago before I left Dublin and I still use him.

Let me know and I will send you a PM with the details.
 
If you are dubious of managed funds you should be looking at tracker funds or EFTS and decide what markets you are interested in and look for the lowest management charges.
Over the long term the tracker funds give you the average mkt return,managed funds can underperform the average and sometimes when they beat the average it is eaten up by the higher fees.
You could build up a fund over 10 years or so and if you have developed a more active interest in the stock market and knowledge by then you can always move into a self administered pension and buy whatever shares ,funds etc you want

People expect to much from brokers /advisors ,do they know any better than anyone else what is going to yield the best returns ? I don't think so.
 
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