Pension Fees

[NGUYEN]

I have just started a new PRSA with my current employer. Prior to this I was always in a defined contribution fund and the fee were paid by the employer (I think).

Does anyone know if fees of 5% on normal contributions and 5% on AVC's and 1% annual adm on AVC is over the top for a PRSA.

When I sat down with the pension representative is never once mentioned the fees and I never thought to ask as I never saw any fees on my previous pension schemes. It wasnt until I got all the paperwork on the PRSA that I realised there was fees.

Any thoughts on the 5% ?

Thanks
Nguyen

 

[GSheehy]

The standard charges on a PRSA/AVC PRSA are a contribution charge of 5% of all payments made and an annual management charge of 1%pa on the value of the fund.

Some companies reduce the 5% to a lesser %, depending on the level of contribution being made. It is also at the discretion of the advisor to reduce the 5% to a lesser amount. The contribution charge pays for the advice received.

If you set the PRSA/AVC PRSA up on an 'Execution Only' basis ie. no advice on product provider, type of product or funds to be invested in, you can eliminate the 5% charge completely.

article may help with your research.


GS