Transfer into PRSA from old employer's scheme

A

ang1170

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I recently took out a PRSA.

One of my motivations was to consolidate the benefits from two previous employer's schemes, both defined contribution. I left both years ago. One is valued at about €5k, the other about €50k.

My understanding was that I could transfer the benefit of both into a PRSA, and indeed from all I've read, I can.

However, there seems to be a catch: for amounts of over €10k my understanding is that there's a number of requirements, including a statement to be prepared comparing the schemes and why it might or might not be in my interests to transfer. The catch seems to be that noone seems prepared to produce this documentation.

I'm being given all sorts of stories, about professional imdemnity cover etc. However, I know what I'm doing (I think!) and would be quite happy to proceed even if the comparison statement said it wasn't in my interest to transfer.

My question is whether there's any way the transfer can me made, and if so how?
 
ang1170 said:
I'm being given all sorts of stories, about professional imdemnity cover etc.
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This is the case as far as I know. Either the cost of getting the required statement is generally prohibitive or else nobody has the required insurance to issue these and I'm pretty sure that it's the latter so the theoretical option is nost actually an option at all in practice.
My question is whether there's any way the transfer can me made, and if so how?
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No - not for the > €10K (?) amount anyway as far as I know. You cannot simply waive the need for the relevant statement because you think you know best. The Pensions Board require it and the rule is not negotiable as far as I know.

Remember that while consolidating pensions may be handy from an administrative point of view it may not always be the best option from a cost and diversification point of view.
 
ClubMan said:
You cannot simply waive the need for the relevant statement because you think you know best. The Pensions Board require it and the rule is not negotiable as far as I know.
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I can understand this, but it wasn't a matter of waiving the need for a statement of comparison.

Depending on who you read, either the statment must say "it's in my interest to move" or why "it may or may not be in my interest". What I was trying to say was that even if the comparison said "there's no good reason to move" or even "you're worse off", I'd be happy to proceed. There's no chance I'd go back to whoever gave me the advice and sue them, as they'd be able say is "we told you so!". Or is this impossibly naive on my part?

By the way, my main motivation over moving (aside from my being simpler administratively) is that I have absolutely no control over the ex-employer scheme: at least with the PRSA I can switch funds or even provider should the need arise.
 
ang1170 said:
I can understand this, but it wasn't a matter of waiving the need for a statement of comparison.

Depending on who you read, either the statment must say "it's in my interest to move" or why "it may or may not be in my interest". What I was trying to say was that even if the comparison said "there's no good reason to move" or even "you're worse off", I'd be happy to proceed. There's no chance I'd go back to whoever gave me the advice and sue them, as they'd be able say is "we told you so!". Or is this impossibly naive on my part?
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As far as I know the Pensions Board and/or relevant legisaltion simply requires this statement so I don't think that you can do anything about it given that you cannot get one. Basically transfers from occupational schemes to PRSAs are theoretically possible but practically impossible for all but sums under €10K or whatever the limit is or if the occupational scheme is being wound up etc.
By the way, my main motivation over moving (aside from my being simpler administratively) is that I have absolutely no control over the ex-employer scheme: at least with the PRSA I can switch funds or even provider should the need arise.
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You should look at switching the occupational fund into a suitable pension retirement/buy out bond that offers the charges and investment flexibility/control and fund selection that you need.
 
Clubman is correct.....if no provider is willing to provide a Certificate of Comparison, then you will be unable to transfer any fund value over €10K into a PRSA (unless the scheme is formally winding up).

You say now you won't sue, but how can the provider be so sure you won't in the future? that's why the indemnity is so huge (last I heard it was about €1M), and that's why no one provides the Certifiactes of Comparison.

As he states, the only option available to you (given that you do not want to leave it where it is), is to transfer to a Personal Retirement Bond (aka Buy Out Bond).
 
Bear in mind that you should be able to get a PRB/BOB with at least as competitive charges as a low charges (0%/1%) PRSA and you may even be able to get better than that (e.g. > 100% allocation rate even after any bid offer spread/commission and an annual management charge of c. 1%). Of course there are also other things to consider such as fund selection etc.
 
ClubMan said:
Bear in mind that you should be able to get a PRB/BOB with at least as competitive charges as a low charges (0%/1%) PRSA and you may even be able to get better than that (e.g. > 100% allocation rate even after any bid offer spread/commission and an annual management charge of c. 1%). Of course there are also other things to consider such as fund selection etc.
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Any idea on where I should start looking for this?
 
boaber said:
You say now you won't sue, but how can the provider be so sure you won't in the future? that's why the indemnity is so huge (last I heard it was about €1M), and that's why no one provides the Certifiactes of Comparison.
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Party A says: there's no benefit to doing option X over Y, and in fact it may be worse for you. Party B goes ahead and does X anyway. Bad things happen. Party B tries to sue Party A. Party A says: "I told you so and you ignored me, why are you suing me?"

As I said, I probably have avery naive view of the true legal situation....
 
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