PRSA Questions

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Pablo NL

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Hi everyone,

I'm a 28-year-old Spanish national living and working in Dublin. I’m planning to open a PRSA to take advantage of the tax relief available in Ireland during the next 2 or 3 years, before I return to Spain permanently.
I’ve already looked into opening a pension plan from Spain directly, but after comparing scenarios, it turns out that opening a PRSA here in Ireland is more profitable, even though I plan to stop contributing once I leave.

My current situation:
I earn €30,000 gross per year, and since my company covers most of my living expenses, I’m able to make relatively high monthly contributions. I also have a lump sum available to invest. I have a PPS number and I am a tax resident in Ireland.

Planned PRSA strategy:
I’m considering a Zurich PRSA (Prisma 4), with this contribution plan:
  • 2025: €2,700 lump sum (starting in July) + €300/month from July to December
  • 2026: €1,250 lump sum (January) + €300/month for the full year
Respecting the €4,500/year tax relief limit (25% of income)

Main questions:
  1. Any recommendations on which provider or intermediary to use? I’ve seen intermediaries like Moneycube, Davy, LABrokers online, but I don’t know any of them personally.
  2. Does this strategy seem optimal for someone staying only 2 more years in Ireland?
  3. Would it be more efficient to contribute the full €4,500 annually as a lump sum instead of combining with monthly payments?

Thanks a lot for your help!
 
1. If you are happy to choose your own funds and risk level, you should contact an execution only broker. You will get a better deal with lower fees by doing this. LABrokers, PRSA.ie or Ferga.com offer execution only service. Email each of these and ask for a PRSA application pack.

2. I don't know anything about Spanish tax rules for pensions.
But if it's a better deal to use the Irish PRSA system, at your age you should opt for a higher risk fund, maybe Prisma 6 for example.

3. This is really a matter of choice. Whichever is easiest for you to operate. The efficiency of a lump sum versus monthly payments is a matter of chance. If for instance you bought in monthly you would be buying at different rates each month. Depending on the performance of the markets you could win or lose versus a single lump sum payment.
 
S class said:
Prisma 6 for example
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Hi, thanks a lot for your response.

I had one follow-up question:
Even if I'm only staying in Ireland for 2–3 more years and plan to stop contributing to the PRSA once I return to Spain, would you still recommend Prisma 6?
I’m quite new to all this and a bit lost when it comes to how these fund options actually work. I understand that Prisma 6 might offer better long-term growth, but since I’ll only be contributing for 2 or 3 years before leaving, I’m wondering if it’s still the best option in my case.


Thanks again for your help!
 
Pablo NL said:
Even if I'm only staying in Ireland for 2–3 more years and plan to stop contributing to the PRSA once I return to Spain, would you still recommend Prisma 6?
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Maybe for that reason and the good chance of a market correction in the coming years you should mentally aim to be happy enough getting the tax relief added to your contributions and the most important thing could be to explore what Steven has suggested so you could transfer your savings back to Spain with the least amount of hassle and tax liability.
 
Pablo NL said:
. I understand that Prisma 6 might offer better long-term growth, but since I’ll only be contributing for 2 or 3 years before leaving, I’m wondering if it’s still the best option in my case.
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If you will be able to transfer the pension such that it remains invested for your retirement, and not triggering a taxable event as mentioned above, then you should really be in the highest risk/reward/diversified equity content fund available at your age. But if it's going to be a case of having to cash in and pay tax on some or all of the proceeds then you may want to be more cautious.
 
Thanks a lot to everyone for your insights and suggestions! I wasn’t aware of some of these options, so I’ll definitely look into that and gather a bit more information before moving forward. Really appreciate the help!
 
Kaixo Pablo, there is the theory and the practice in the world of pension transfers in the EU.

If what you want to do is to transfer your pension to Spain in 2 or 3 years when you leave you need to be aware that is not an easy task. EU pension transfers are recognised and need to follow the so called ROPS conditions but there are still far to be harmonised in the EU specially for Private pensions.
This will change coz it needs to as the mobility or workers in Europe is one of the principles of the EU and hopefully all will be in place when you reach retirement age.
For the moment as far as I know only the public pensions can be transferred without problems in Spain.
It also depends on where you will be based in Spain (due to the rules in each autonomy) and where you are working in the EU.

The transfer of a pension needs to happen with a recognised overseas pension scheme following the ORP II requirements.
I really do not believe you will find today the possibility to transfer a private pension in Spain from Ireland but I will be very happy to be wrong in this matter and if someone can explain how this is done.
The EU is working on finding a harmonised solution for what they call Paneuropean pensions.

In Spain the only recognised group that I am aware of that accepts transfers is Itzarri which works only with Public Pension schemes.

What I would do is think what you want to do with those savings and if you can afford to leave them in Ireland as a deferred member until you can transfer them or can get at your pot after 50 years old. This idea might be mad all together at your age!

I don't know if the "Master Trust" option that @Steven Barrett mentions is the solution here.
It would seem that today you should open a Master Trust coz they must follow the ORP II requirements however my question would be is there any other Master Trust in Spain that will "accept" that transfer today?

It would be good to have some more background on this if anyone knows an specific case.
I just think that today the theory is there but not the practice.
 
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Pablo., I have done a quick search to see if there was any update since 2024 when I checked this last. I can see if it the same. The idea and framework has been agreed at EU level but has not been followed by the Spanish gov as yet. Financial institutions are not offering the possibility of a transfer (with an exception for the UK),
See below
- ING
- MAPFRE (article from end of 2023)
- BBVA
- Indexa Capital
Mercer and others... It is just not happening as yet
 
VInterested said:
Kaixo Pablo
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Eskerrik asko for the response, really appreciate it!

To be honest, I’m quite unsure about what to do at this point.

I’ve spoken with two different advisors so far: one from Zurich told me it’s better not to open a PRSA (You would not be able to continue paying into your PRSA once you had left the state.
VInterested said:
are not offering the possibility of a transfer
Click to expand...

Also, if you were to transfer the benefits of your PRSA to a provider in Spain this can sometimes create problems with finding a provider to accept the transfer for you.)
But another advisor told me that opening a PRSA would actually be a good idea, and that it’s better to make higher monthly contributions (instead of a lump sum), especially since I only started working in May and wouldn’t be able to benefit fully from tax relief on a large upfront payment this year.
So right now I’m not 100% sure what the best option is. I’m leaning towards sitting down with an advisor soon to clarify all this in detail. If things remain unclear, I might just allocate that savings amount into investments (like ETFs) instead of starting a PRSA here, and then open a pension plan once I’m back in Spain.

Thanks again for all the insights
 
Pablo NL said:
But another advisor told me that opening a PRSA would actually be a good idea, and that it’s better to make higher monthly contributions (instead of a lump sum), especially since I only started working in May and wouldn’t be able to benefit fully from tax relief on a large upfront payment this year.
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This doesn't sound right. What sort of "advisors" have you been speaking to?
 
ClubMan said:
This doesn't sound right
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Haha, it sounded strange and honestly surprised me a bit. I think they saw that I had some money available to invest and noticed I wasn’t too familiar with how the Ireland–Spain pension relationship works, so maybe they saw an opportunity there…
I contacted Zurich directly and also spoke with Moneycube. Zurich told me not to open but Moneycube said the opposite
 
ClubMan said:
This doesn't sound right. What sort of "advisors" have you been speaking to?
Click to expand...
They don't seem to be taking into account that the OP is going to move back to Spain in a few years...and obviously will want to move their pension.

As VInterested pointed out, what can be done in theory is very different to practice. As it is on "the other side", it is not something I have actually done (it is for the other advisor to do). But I do know that trying to transfer a PRSA will create a taxable event. A Master Trust/ Group pension structure is the only structure that can facilitate a pension transfer to another EU country.
 
Steven Barrett said:
They don't seem to be taking into account that the OP is going to move back to Spain in a few years...and obviously will want to move their pension.
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This could also trigger clawbacks on pension contributions too, I.e. having it invested for only 2-3 years.

I suspect the better option might just be to leave the PRSA in Ireland, even if moving back to Spain.
 
Hi everyone,

I spoke again with Moneycube and they told me this:
If we were to do a recommendation for you, we would set you up with what is called a PRSA (short for Personal Retirement Savings Account).
I understand you will be in Ireland for 2/3 years.
You can set up a PRSA now and pay into it for 2/3 years. If you move back to Spain, you can just stop your monthly contribution then.

At this point when you move back to Spain you will have 2 Options.

Leave your PRSA invested in Ireland, and it will continue to grow which will be for approx. 30 years as you are still quite young. You will have online access to your benefits if you move back to Spain and can check in on your pension daily online and you can also consult with your financial advisor. At Moneycube we offer an annual review service and are always here to answer any questions you have.

Transfer the PRSA to a Private Spanish Pension if you have one set up in Spain and so long as your Spanish provider can accept it. These types of international pension transfer are quite common nowadays as people move from country to country for work.


But as I mentioned, Zurich told me it’s better not to open anything for now and just wait until I’m back in Spain…

I’m a bit lost to be honest, haha.
 
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