Moneymakeover Time to give pension careful consideration

[Tradepoint]

Your age: 59
Your spouse's age: 59
Number and age of children: 3 children. All adults and self sufficient


Income and expenditure,
Annual gross income from employment Self employed: €65,000 plus €40-50k bonus depending on company performance (This goes to pension)
Annual gross income of spouse/partner: €105,000 Public servant
Monthly take-home pay: Me €3,650 (after maxing pension contributions)
Spouse €4,600 (Approx after buying maximum allowable notional service)


Type of employment: I work in private sector, Spouse works in public sector

Generally we live off one salary and the rest is saved Approx 4K per month.


Summary of Assets and Liabilities
Family home value: Estimated €1.2k
Mortgage on family home: No Mortgage

Investment property Value €550K- No Mortgage
Have owned this property for circa 25 years bought for €192K

Cash On hand: €450,000 Approx. (Due to the sale on an investment property last year and savings).

Pensions: Zurich, Prisma 4. Value is €690K (I only started funding this about 6 years ago and will continue to do so)
Small Irish life pension of approx €50K

Spouse has a public service pension due, as she will not have a full 40 years service at 65 she has been buying notional service.
She has a small pension from a previous employer which will pay €6K pa


Total net assets: €2980K Plus spouse pension.


Family home mortgage information
N/A

Other borrowings – car loans/personal loans etc
No borrowings

Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card? N/A

Pension information
Zurich Pension Prisma 4



Other information which might be relevant
We live is south Dublin close to all amenities and have no wish to move or down size at the moment., the investment property is also in SD and well located.
I do not rent the investment property as in the past i have been a landlord, i have no wish to return to it. 2 of my kids live there FOC. In future years we can make a decision on what to do with it.

Both myself any my wife enjoy our work lives, have short commutes to work and have no real plans to retire before 65.

What specific question do you have or what issues are of concern to you?

My Zurich pension has been moved to a Master Trust, i have been advised to move it in its entirety to an Aviva Personal retirement bond then going forward make any additional payments to an Aviva Non standard personal retirement savings account

Would the contributors think this is a good move? I know very little about pensions and find the whole think mind numbing

 

[Life_pondering]

What reason did your advisor give to explain why that made sense - it’s difficult to comment without more information especially on the fees and charges on the master trust and recommended options.

 

[Tradepoint]

The reason given is my age, with the master trust my spouse will only get 4 times salary if I die where as with the PRB the total can be taken.
The cost of withdrawal from the master trust is Approx 11K, if i place the total value with Aviva there will be 102% allocation off setting the Master trust cost (Approx 13K).

Seemingly Zurich have taken the approach of automatically transferring my pension to the master trust without informing me.

 

[Steven Barrett]

Sounds like a commission play to me.

The average 59 year old is expected to live for another 23 years, so unless you die in an accident, the treatment of your pension upon death before retirement is irrelevant. Under a Master Trust, the amount paid out is 4 times total earnings, so your bonus is taken into account, plus the value of personal contributions. With the remainder, your wife can either purchase an annuity or invest it in an ARF, so any excess is still paid to her. As it is under trust, it doesn't belong to you so it doesn't go through probate, so it is paid out quicker.

Under the PRSA, it is in your name, so it goes through probate, so it'll be around a year if everything is done quickly. The full value is cashed in and paid to your wife.


The death before retirement benefit should be one of the last benefits for transferring from one pension to another. It is often used as the first by brokers who are calculating the commission payable to them first. The fact that there are exit penalties on the master trust yet they are still trying to get you to move is sounding alarm bells in my head. Get a new advisor.

 

[Tradepoint]

Thank you Life_pondering and Steve Barrett
This is my concern as i had not heard form the advisor in years and now they are recommending that i change. Having no knowledge of the pensions industry it raised alarm bells.
Is it a situation where i can just stay with Zurich Master trust and continue making the payment as i have always done or am i best to seek independent advice and maybe move to a different broker/advisor?

 

[ClubMan]

My Zurich pension

What kind of pension is (was?) this? Occupational scheme, PRSA, Retirement Annuity Contract/Personal Pension Plan?

has been moved to a Master Trust,

When/why was this change effected?

i have been advised to move it in its entirety to an Aviva Personal retirement bond then going forward make any additional payments to an Aviva Non standard personal retirement savings account

As @Life_pondering asked...

What reason did your advisor give to explain why that made sense

 

[Tradepoint]

The Zurich pension is Titled as an Executive Pension
The change apparently happened as all executive plans have to be changed over to PRB's/PRSA's, if not they are put into Master trusts.
I'm told that a lot of providers gave the option to the holders to change in advance on 22nd April 2026 but Zurich took a different stance and placed all these types of pension in a Master trusts (I don't know if this is correct it is what i was told)
I answered Life_pondering's question in #3

 

[Steven Barrett]

Is it a situation where i can just stay with Zurich Master trust and continue making the payment as i have always done or am i best to seek independent advice and maybe move to a different broker/advisor?

You can just transfer to the master trust. Nothing really change, the changes are at trustee level, not at investment level. Depending on how old the policy is, it may be done automatically or you may have to sign a form and send it back.