Pensions Query

kippy

Right,
My dad (who knows little about finances) asked me (Who knows a small bit more than a little)to look into a few things for him.
He recently got a statement of his pension entitlements from a company he worked for for around 13 years. It is a construction industry pension.
He joined the scheme in 81 and left in 94 (He has been unemployed since)
Anyway his total input into the scheme was about 6-7k and the company was the same, putting the total value up at around 12K. (Sorry dont have the exact figures)
Anyway the statement showed how much was put in, how much it was worth now and how much it will be in 2012 when he "retires" (he hasnt been working since 94) and has no other pensions(Outside OAP).
Anyway, the value of the pension is 12,500 now, and they project the value at retirement will be 15,500.
I am really amazed at this. Pension grows in value by feck all in 14 odd years since he left it but will grow by 3000 in the next 4??

Whatever about this, I believe the 12,000 at the moment could be better invested than what it is at the moment.
I believe he can withdraw this money at no loss (tax wise) so long as it goes into a PRSA. If the money goes towards any other use then I believe that the tax must be repaid on this.

If anyone can give me any tips/explanations based on what I have said above, I would be grateful for them however my main query is:
Who best to speak to about this for financial planning information that:
a. Doesnt have a vested interest in what they advise.
b. Doesnt cost the earth.

I realise the sum is very small and to be honest I am worried that he isnt really that covered for when he does retire (outside of standard OAP pension), hence I want to see if that money can do better than it has been/is projected to.

Kippy

kippy

Anyone with any tips?
Maybe I should go to the Pensions Board or a bank??

Popsicle

What company is it invested with?
Shocking performance if it was worth €12,000 when he left in 1994 and here we are 13 years later, its worth €12,500?? Even with the peaks and troughs of markets over the intervening period, thats appalling.

First thing I would do, is go back and query the figures???

kippy

Popsicle wrote: »

What company is it invested with?
Shocking performance if it was worth €12,000 when he left in 1994 and here we are 13 years later, its worth €12,500?? Even with the peaks and troughs of markets over the intervening period, thats appalling.

First thing I would do, is go back and query the figures???

Hi Popsicle,
That is exactly what I thought. In general you would have thought that the right fund would have made a lot of money in the intervening period.
I suppose querying the firgure with the existing fund holders is the first option.
After that I will see what alternatives are there.
Kippy

broker2008

The figures don't add up. This may well be an initial unit policy where transfer values only equal notional values at maturity ie 2012. He may have increased his premium shortly before he left in 1994 whereby commission would have taken a large chunk of the contribution because it would have assumed payment until 2012. Write to the company in question asking for a history of pension payments, funds invested, transfer value, notional value. Ask for options available. If PRSA is available, remember 4 years is not a long period of time. One might consider extending the investment period. Remember Standard PRSAs only offer limited funds and no mad risk/high return potential funds. Look at existing management charge versus PRSA (max 1%). Try and pay for fee based advice rather than commission based advice as it is not a large sum of money and advice might be more beneficial than simply picking a company and investing in a PRSA.

I was never a great fan of this industry's pension offerings.

The Rooster

You should ask for a summary of the value of the pension after each year.

Sounds like only his own contribution and none of the company's is being counted. Even doubling your money in that time isnt great.

Something defo wrong - questions need asking!