Statement of Reasonable Projection

Having said last week that I was not going to keep looking at the prsa given that I only started it this year and it is well down, lo and behold this thing arrives in the post called statement of reasonable projection.

I dont understand the rationale behind this, so phoned them up. Given that year 1 is almost past, I dont see why this is still a projection and not based on actual figures. I have already made a lump sum contribution this year which is not included, so it is actually flawed from year 1 and the person on the phone said, how could we take this into account, we did not know you were going to do this and I said, you did, because it is paid since January. They are still projecting a 6% rise for year 1 as well, which is going to be tough to get given that I only have one month to get ahead by 6%, when I am already down 25% overall at month 11.


Anyone tell me what is the point of sending this document? It is not reasonable to expect a 6% rise in year 1, so where are they coming from.

MandaC said:

Having said last week that I was not going to keep looking at the prsa given that I only started it this year and it is well down, lo and behold this thing arrives in the post called statement of reasonable projection.

I dont understand the rationale behind this, so phoned them up. Given that year 1 is almost past, I dont see why this is still a projection and not based on actual figures. I have already made a lump sum contribution this year which is not included, so it is actually flawed from year 1 and the person on the phone said, how could we take this into account, we did not know you were going to do this and I said, you did, because it is paid since January. They are still projecting a 6% rise for year 1 as well, which is going to be tough to get given that I only have one month to get ahead by 6%, when I am already down 25% overall at month 11.


Anyone tell me what is the point of sending this document? It is not reasonable to expect a 6% rise in year 1, so where are they coming from.

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Mandac, you are correct in your assessment of your figures, but have obviously been misunderstood as to how your pension should work.....

Firstly, your figures were based on what you would invest and assumptions based on a 6% growth on this investment (normally assumed on a regular monthly premium). Any lump sum you invest initially or incidentally could not seriously be included in a quote you originally get. Unless you included your inclusive lump sum, you cannot seriously hold any company accountable for innacurate figures.

The problem with these figures is simple. You obviously dont have a proper understanding of the whole structure of investments. Im not being sarcastic but people dont seem to understand that if they invest money in anything other then guaranteed bonds or cash, that they shouldnt lose any money.

MandaC said:

Anyone tell me what is the point of sending this document

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Disclosure Regulations.

The PRSA Provider has to issue you with a Statement of Account every 6 months. A Statement of Reasonable Projection must be issued annually (along with the SOA).

I have a fair grasp of how investments work given that my work involves large tax based investment projects. The tone of your post is a bit patronising to be honest, and I would hope you would not have that view of your clients. I have enough understanding to know that you cant tell me at the end of Year 1 that it could have grown 6%, when it has actually lost 25%.

However, given that at November 2008, €8.5K is paid, I do not see the point in sending a statement of reasonable projection stating that prior to taking up the investment, I was going to pay in €3k a year. Surely the figures should be based on actuals rather than pie in the sky projections. I dont expect them to do a Mystic Meg and predict what I am going to pay in the future, but I certainly expect them to know what I have paid into it, in the past.

I would certainly not get away with sending this type of thing to clients. You invested in project X 2 years ago that has now lost €25K, but here is a statement of reasonable projection going back to day 1 saying that the investment could have grown 6% a year. They would tell me to get off the stage.

If that is the case, they could just photocopy this same document and keep sending it for the next 30 years, irrespective of what is paid into the plan.
Boaber, that makes sense, if it is a disclosure document they have to send. But unless the figures change to actuals somewhere along the line, there is little point in sending it. That is what I am trying to ascertain here.

Also included in that was a leaflet advising, if your figures are below X, you need to be paying in more, which should not be included, or included with a warning, given that the figures are inaccurate. It does not state this anywhere on the document that this is not based on your actuals, so it is a bit misleading.

Mandac,

It is, as boaber put it, a disclosure document they have to send out.

And no, I am not normally patronising (and did not mean to be) to clients, but alot of people (on this website and out in the real world) dont seem to grasp the concept of Investments being a risk, whether they be pensions or simple investments. So apologies for assuming that you are one of the many that cant actually understand that their fund value has gone down.

To keep things to the point, it is reasonable to normally accept 6% growth in year one of your contributions.

That said, I agree with your point that it really means nothing to you to get a document that has little to do with your specific regular contributions or indeed the decline in its value.