“But how often are you going to have two (or more) pension products that invest in exactly the same underlying assets to make such a comparison meaningful? Index trackers tracking the same index maybe, but anything else is surely apples and oranges? Don't we (in Ireland) simply have to accept that TER may be higher than the stated headline charges and work within that constraint? Unless something like a self managed/directed (?) pension is an option which I presume is only an option for high net worth punters?”
It doesn’t matter if your PRSA invests in one option and the occupational pension another.
All you are trying to establish is the answer to your question; “what should I expect the actual costs to look like for each plan?”
Let’s say for sake of argument that the occupational scheme says it also has an AMC of 1%.
How are you supposed to compare the merits of moving the PRSA to the occupational scheme?
All you can do is pick one or more funds from each scheme against which you can measure against a relevant benchmark.
Yes an index fund with a recognised index is ideal.
That this might tell you is that the PRSA returned say 1.5% implied cost but the occupational scheme 1.25%
It’s not foolproof but at least it’s giving you another way of looking at the comparative merits of the two options.
In practice a more relevant consideration is the availability of relevant investment options.
If your prsa only offers (and I’m being flippant) an Irish equity fund and a cash fund and the occupational scheme offers global developed equites, emerging market equities, euro hedged bond funds, cash, REITs, specialist funds like value weighted and smaller cos then it’s a slam dunk, go for the occupational scheme.
It doesn’t matter if your PRSA invests in one option and the occupational pension another.
All you are trying to establish is the answer to your question; “what should I expect the actual costs to look like for each plan?”
Let’s say for sake of argument that the occupational scheme says it also has an AMC of 1%.
How are you supposed to compare the merits of moving the PRSA to the occupational scheme?
All you can do is pick one or more funds from each scheme against which you can measure against a relevant benchmark.
Yes an index fund with a recognised index is ideal.
That this might tell you is that the PRSA returned say 1.5% implied cost but the occupational scheme 1.25%
It’s not foolproof but at least it’s giving you another way of looking at the comparative merits of the two options.
In practice a more relevant consideration is the availability of relevant investment options.
If your prsa only offers (and I’m being flippant) an Irish equity fund and a cash fund and the occupational scheme offers global developed equites, emerging market equities, euro hedged bond funds, cash, REITs, specialist funds like value weighted and smaller cos then it’s a slam dunk, go for the occupational scheme.
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