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Pension query

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  • 15-01-2012 8:32pm
    #1
    Smartguy
    Closed Accounts Posts: 214 ✭✭


    I have three different pension funds (all DC).

    1. A scheme with an ex employer where I worked for 7 years
    2. A PRSA containing contributions from an employer where I worked for 12 months
    3. I have now joined the scheme of my new employer.

    All these are in managed funds with Irish Life

    I am thinking of transferring my old employer pension pot and my PRSA to the scheme of my new employer for simplicity reasons.

    Would this be done on an offer to offer basis as standard or would Irish Life sell them first and then repurchase at the higher rate?


    Is there anything else I should be aware of in doing this?


Comments

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    #2
    Pablo Sanchez
    Closed Accounts Posts: 1,207 ✭✭✭Pablo Sanchez


    Yeah they will sell the units you hold and buy news ones (even in the same fund) so you have a bid offer spread to pay right there.

    I would imagine there may be some element of an early encashment penalty as well. This all needs to be weighed up against the increased simplicity of having just the one pension contract.


  • Options
    #3
    ANXIOUS
    Registered Users Posts: 3,095 ✭✭✭ANXIOUS


    From the information you've posted. Yes they will dis invest the funds and re invest them. There wont be a charge for this.


  • Options
    #4
    Paraic OMuir
    Registered Users Posts: 9 ✭Paraic OMuir


    Your new employer should be able to tell you what the allocation rate is on transfers as it depends on how the scheme is setup. You should request a current statement from your ex employer and a current statement of your PRSA. These statements will indicate if any penalties apply on transfers.


  • Options
    #5
    Drumpot
    Registered Users Posts: 19,306 ✭✭✭✭Drumpot


    Questions to ask provider/broker:
    • Is Surrender Value = Transfer Value
    • Will you lose any benefits (eg guaranteed annuity at retirement) by transfering to your new Pension scheme - this will relate to Pension 1.
    • What is current management charge of Pension 1 and 2 (prob 1% on PRSA) and then find out what new management charge is.
    • What funds are available on your new Pension plan.
    If you want to take an active role in your Pension investment, dont just let them lob you into the Pension Consensus. Your new employer prob has a brokerage looking after the Pension plan, ask for them to go through what a diversified portfolio is. When trying to decide how to invest your pension monies I always ask people "how much would be an acceptable loss on your investment?". This usually focuses the mind as nobody wants to lose anything, but they dont factor it in when deciding how risky an investment to take.

    Irish Life have a Self Invested Fund option whereby you can get access to hundreds of funds, including Fixed deposit funds (bank deposits) which are ideal for Pensions that you have no access to and guarantee a fixed return. If you were not going to put all your funds into your new plan you could move Pension 1 into a Personal Retirement Bond in your name (same allocation etc) and may potentially get a lower management charge (as low as 0.75%).

    Disclosure: I am a Multi Agency Intermediary with multiple agencies with Life Assurance companies (including Irish Life). I am only providing information, not offering advice on this post.


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