Wind down of SSAP decision - urgent

Hello, first time Forum user here so please take it easy on me if I have posted this incorrectly!!

I am looking for advice in relation to a SSAP situation and a general pension query.

I am a self-employed director with a number of pension policies. Overall my total funds are just north of the current SFT and I am at an age I could take benefits should I wish. Even if I do take benefits, I probably plan on continuing to work , albeit reducing my hours.

I consider myself reasonably financially savvy ( allowing for a few mistakes over the years - such as , against my own better judgement but still mea culpa, letting some of the hype around Irish property cloud my judgment back before the crash ) but overall , I have done ok.

However, and this is why I am here on Askaboutmoney , I am struggling with a decision in relation to my pension. I don't want to make a bad decision that is irreversible but equally I am being pressurised to make a quick decision.

Of total assets in pension of c. €2m about 40% is in my SSAP - The remaining 60% is spread across about 10 different policies ( mainly with the large insurance companies in a mix of company exec plans, PRBs and PRSA's) - a bit of an admin mess that I am seperately attempting to resolve and clean - up.

However, the SSAP is the pressing issue. _My financial "advisor " is a very large well-known broker - who I believe I no longer have a good relationship with and their advice I simply don't trust at this stage for a whole variety of reasons.. The registered SSAP administrator and trustee company has written now several times to me advising that I must URGENTLY start the winddown of my SSAP before the IORP II deadline of 31/12/2025 as they will cease providing services then.

Originally last year I had planned to go to post-retirement funds with an ARF but then the SFT rules changed so I decided it makes more sense to stay in pre- retirement funds and move the SSAP to a PRSA.


I do not need to take retirements benefits at this time , I could wait , maybe 7 - 10 years or even longer before I do so- should I wish but obviously plans may change and there is no point having it if you don’t spend it after all.

For an ARF with total assets of c. €2m. last year my broker was willing to do a deal as follows.

100.5% allocation from Aviva, AMC 0.65%,with exit charges 2/2/2/1.5/1

Brokers was getting a 2% initial commission , followed by trail commission of 0.2% p.a. , with a bonus of 0.05% year 6 onwards

But now as I have told them I plan to move the SSAP ( c. €800k) to a PRSA , they now want to charge 1% + 0.25% for "ongoing advice", -which seems like a very very bad deal - and I should mention that this same broker currently "manages" my other pension funds.

(I also have had a row with the broker as I decided to use Irish Life to help transfer 3 company exec policies this broker had originally set up, into a PRSA so I would have more control.-)

All in all, the broker relationship is not good, but the SSAP administrator (company whose name begins with “N” whose service is appalling won’t deal with me directly but only via the broker) .


So I am looking for advice that helps me optimise retirements benefits (perhaps stay in a PRSA until hopefully it reaches the €2.8m threshold, them move to ARF)

However, I don't want to let tax be the driving factor - anytime I have done that in the past , it has always ended badly.

(Incidentally as regards fund charges , I have a number of US based fund investments, outside of pension, that have an OCF of less than 0.3% so I view generally the AMC's /OCF's from the Irish fund providers/brokers as a rip – off.)

Having said that , as its my “pension” I want to be able to sleep at night so I do not want to anything too risqué.- been there , done that – having had accounts with Anglo Irish Private, Lehman brothers, Northern Rock etc and somehow managed not to get stung, I don’t want it to all go pear shaped now.!

I have spoken to other brokers in the past and some of them have mentioned for example. ITC – who seem to have low charges, but I know very little about them . How well regulated are they and indeed how good is the regulation?

I feel I am being screwed by my current brokers - they cannot even explain what exactly I get for their 0.,25% fee for "ongoing advice" and equally I feel I am being strong armed by the SSAP admin company into a quick decision.

Anyhow, I am open to suggestions/proposals/plan of action but I need to make a decision in the next week or so.

If you’re happy making your own investment decisions I’d go execution only

I just helped someone moving from pension to ARF

Can get 100% allocation and 0.35% amc with Aviva (ARf option d) or 101% with Irish life and 0.4% amc (iirc)

Went with Irish life cause we thought transfer would be smoother (to stay invested) but seems to be taking irish life forever to sort

Passive world equity investment strategy in each case

I didn’t do a huge amount of looking around so might be others offering similar rates

Cameo said:

I didn’t do a huge amount of looking around so might be others offering similar rates

Click to expand...

Maybe Royal London Ireland?
Thread mentions PRSAs but they also do ARFs and they are mentioned in the thread.

You either find a broker that you can trust and move on or make all the decisions on product/provider/fund/s yourself.

Being brutally honest with you, given your opinion of providers/brokers, I wouldn't lead with that if I was trying to find an alternative. An advisor reading your post above might be reluctant to take you on as a client.

There are so many moving parts and uncertainty in the above that it's highly unlikely that that you will be able to 'manage' the 11 policies yourself until you know exactly what you want to do regarding work/retirement.

Maybe it's just a matter of managing your expectations a bit better. What exact type of service are you looking for from a broker/advisor and what level of fees/commission do you expect to pay for that service.


Gerard

www.execution-only.ie

P.S. The 'real' SFT is likely to be circa €3.1m (my guess) if 2030 (year of assessment) when average wage growt is factored in.

Hi Gerard;

The question has to be what is the added value the broker is providing. I am the customer after all.

Being equally honest in return, I don't expect any broker to do me a favour by taking me on a client free gratis. At the end of the day brokers receive commission ( which incidentally I don't have an issue with) from fund providers or else it has to be fee based from the customer. However, in my case, a back of the envelope calculation is that my broker expects to receive around €2k p.a. for "advice" if I transfer my SSAP to a PRSA - this is in addition to the 1% AMC for the product provider.. When questioned on what exactly the advice would be and how often it would be provided - my current broker is very vague - possibly an annual meeting. I simply don't think that is value for money - especially given their track record ( with me at least ) is poor. (There are othe issues which occurred other the years which I didn't post but I have been with this brokers in one share or form since 1999. -- so they have done ok out of me)

What I am looking for to (a) exit the SSAP and (b) move this into a PRSA but it needs to be competitively tariffed and with ain investing approach that resonates with me and a relationship that I feel works for me.

In terms of investing, I favour passive index funds as the research indicates passive investing beats active.- over the longer term at leats . I can select the funds once I have KIDDs ,etc

I expect to stay in a PRSA for 7 - 10 years and then move to an ARF.

Regarding the II or so other policies, these are not a major issue as they are really spread across just 2 fund providers . I now have online access so can easily track performance . I did have 3 policies amongst the 11, which for some bizarre reason were set up set as 3 company executuve plans( veen though all were with the same employer though) by my existing broker . I am in the process of moving these to PRSA's so that I have portability.

In terms of fee's and commission , I expect transparency on fee's and to achieve an overall aggregate OCF's ( platform, broker etc ) in the range of 0.55%- 0.75%.

Specifically I need a service to wind down my SSAP and move it to a new PRSA .

There is some work in this but there is obvously a financial incentive in terms of ongoing fee's.

Last point, I need to satisfied that the funds are safe - otherwise I will stay where I am with my current broker. I have no concerns in that regard with them.

On the last point regarding the SFT future limits- noted - However, I doubt if my fund ,without further contributions,would reach €3m by 2020 - also in my opinion, the relative advantage of staying in pre- retirement funds with a PRSA/ PRB's versus an ARF has diminished somewhat as the tax advantaged lumpsum has remained constant at €500k. Yes , there is untaxed gross - roll up, and no taxable imputed distribution with from age 61 but there is the CET issue to consider.