Move existing PRSA into Employers Scheme?

MandaC

Registered User
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I have had a PRSA with Irish Life since 2007. It set it up through a low cost broker and it was a nil commission and I have 100% unit allocation. I currently have paid in almost 17k and it is worth in and around 18,800.

Employer is now offering a new pension plan open to all staff. I was told that I could transfer my PRSA into it. However, am not sure if this is a good idea, as I am on low charges in my existing PRSA. Can I keep run 2 plans? I would be mad not to join the employers scheme (6% contribution this year and probably 4% thereafter?)

We have been invited to an open session for all staff on the pension - any idea of what questions I should ask?

Thanks for any responses.
 
Hi MandaC,

I'm assuming that your new employer's scheme is an Occupational Pension Scheme as distinct from a group of PRSAs.

Having all your funds in one place is neat, tidy and easy to track. But before making a decision on whether or not to transfer one fund into another, the current home and the prospective new home should be compared using the following criteria: -

  • Choice of funds and their suitability for your requirements
  • Charges
  • Options at retirement
  • Any implications for the vesting period in the new scheme if it accepts a transfer in from another scheme
The first two are questions to put to the new scheme representatives, so that you can compare your PRSA with the scheme. Options at retirement are likely to be harmonised following the next Finance Bill shortly. As your transferring fund is a PRSA, there should be no implications on your vesting period in the new scheme.

You’ll need to check with the scheme pension contact that the pension scheme can accept a transfer from a PRSA. It is possible for a scheme to refuse to accept inward transfers, although this is admittedly rare.

You could choose to leave your fund invested in your Irish Life PRSA, where it would continue to participate in the performance of the chosen fund(s). Possible arguments in favour of doing that would be: -

· Control: this PRSA remains under your control and you can choose or switch funds from the entire range offered by Irish Life or indeed move to another provider if you wish.
· Flexibility: If in the future you left your current job and became self-employed or joined another employer you could simply re-start contributions to your PRSA.
· Flexibility (2): If you have more than one pension arrangement, you can choose to phase in your retirement over a period, e.g. draw your benefits from your PRSA at age 60 and your benefits from the pension scheme at 65.

That said, you may decide that the administrative simplicity of having all your pension funds in one place outweighs the above.

If you join the employer's scheme, you can't continue to make contributions to your Irish Life PRSA and claim tax relief on them. But you could make Additional Voluntary Contributions (AVCs) to the scheme or you could arrange for your PRSA to be converted into an AVC PRSA and continue contributions to it that way.

Hope this helps.

Regards,

Liam
 
Thanks Liam, great advice as usual. We have already been told that we can transfer in our prsa s as there are 5 of us in the same boat. I am actually thinking of leaving the prsa and paying in avc s as you say. Am not keen on paying a yearly management charge on a fund that is nothing to do with the current provider. The new fund is through mercer and I note the interesting discussions in the other thread.

Thanks for your help!
 
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