New Job - Dont Qualify For Pension For 6 Months

duckmusic

I am 29 and have a decent sized pension pot built up as I started paying into it when I was 23. I recently changed jobs and will start paying into the new pension as soon as I can. However there is 6 month probationary period and I dont qualify for it till then.

Ideally I wouldn't want the 6 month gap in contributions as I know that it all adds up. Do I have any options? Is there anything I can do myself that I can then add into my pension pot once the 6 month period is up?

Thanks,

DM

You can still pay in yourself....... have you transferred your pension to the new employers one or is it still with the old?

duckmusic

Augeo wrote: »

You can still pay in yourself....... have you transferred your pension to the new employers one or is it still with the old?

It is still with the old one. They sent me a letter trying to get me to move but it was advised by the new one to leave it there till the 6 months are up.

loyatemu

If you can't pay into the old one and can't pay into the new one for 6 months, you'd have to setup a private pension, which seems like a lot of hassle for the sake of 6 months. Just save x% of your salary and then pay it into the new pension as an AVC when you can.

loyatemu

loyatemu wrote: »

If you can't pay into the old one and can't pay into the new one for 6 months, you'd have to setup a private pension, which seems like a lot of hassle for the sake of 6 months. ................

Small bit of hassle.
In the spirit of diversity I think anyone with an interest in the financial world etc should consider having a PRSA funded from AVCs instead of putting extra into their work pension.

Most employer pensions are high fees, one fits all type stuff that wouldn't be much better than an Irish Life offering.

Merowig

Augeo wrote: »

Small bit of hassle.
In the spirit of diversity I think anyone with an interest in the financial world etc should consider having a PRSA funded from AVCs instead of putting extra into their work pension.

Most employer pensions are high fees, one fits all type stuff that wouldn't be much better than an Irish Life offering.

My experience and understanding is that most occupational pension schemes are low fee and employers are often covering the fees as well.

In the situation of the OP I would simply put money aside and make an AVC into the new scheme after end of probation.

duckmusic

Thanks guys, appreciate the advice. Putting it aside for now seems like a good plan

Merowig

Merowig wrote: »

My experience and understanding is that most occupational pension schemes are low fee and employers are often covering the fees as well...............

Nope.
Many/most OPS are still subject to an annual % charge of the fund that the employer most definitely does not cover.

10 employees with a €200k fund each, 1% MC per annum, that's €20k.

Merowig

Augeo wrote: »

Nope.
Many/most OPS are still subject to an annual % charge of the fund that the employer most definitely does not cover.

10 employees with a €200k fund each, 1% MC per annum, that's €20k.

The annual management charge where I am mostly invested in is 0.34%.... I won't get any PRSA for that on the market.

Merowig

Merowig wrote: »

The annual management charge where I am mostly invested in is 0.34%.... I won't get any PRSA for that on the market.

And is that representative of most OPSs?

Merowig

Not necessarily.
But I haven't seen a source from you that most of OPS are high fees either

Merowig

Merowig wrote: »

Not necessarily.
But I haven't seen a source from you that most of OPS are high fees either

So one needs to back up each point the make with a source these days do they?


"My experience and understanding is that most occupational pension schemes are low fee and employers are often covering the fees as we"

Off you go kid, no doubt you don't have much experience of most OPSs though.

Merowig

You claimed something - I claimed something. No one sourced

http://www.welfare.ie/en/downloads/pensionchargesireland2012.pdf

Findings suggest that occupational pension schemes compare favourably to these benchmarks. The
average Irish occupational scheme reduction in yields (in relation to disclosed costs only) identified are
0.52% to 0.91% (Defined Contribution insured schemes of various sizes) and 0.30% ‐ 0.58% (Defined
Contribution non‐insured schemes of various sizes) compare favourably to the equivalent reduction in
yields calculated for UK Stakeholder pensions (1% and 1.63%) and the typical charging structure for
standard PRSAs (1.27 to 1.57%).

So OPS seem generally to compare better to PRSAs....

Henry Ford III

People get overly hung up on charges I think.

Sure lower charges are better everything else being the same, but a low cost solution is likely to offer less too. A better investment strategy and innovative thinking concerning structure diversification switching and timing are much more important and will potentially make a much bigger difference to your ultimate pension pot than a mini war about minor variations in contract charges. Good advise is always of value.



p.s. The big issue that everybody missed on this query is the difference in how and when benefits can be paid out. Under an OPS early retirement is possible form age 50+. Try telling someone that their blind pursuit of lower charges means they can't access money until 10 years after it's needed.

Henry Ford III

Henry Ford III wrote: »

....... Good advise is always of value..............

Depends on the cost.
Many QFAs and APAs being paid handsomely for doing little to benefit their clients.

Not everyone needs to pay someone to attain " A better investment strategy and innovative thinking concerning structure diversification switching and timing"

When a financial product peddler mentions "timing" "switching" and "will potentially" in the same sentence you know you are getting a speel of rubbish IMO, especially when they are trying to justify the "minor variations in contract charges"

Merowig

A broker is not investing himself - he is selling financial services / financial products and is getting then commision on the sold product for the rest of the lifetime of the product. Naturally maximisng his comission will be then his first priority.

Timing the market is generally a bad idea.
Even the lower cost funds have lifestyle plans as this the law where the funds switch over time automatically from shares to bonds/cash holdings towards the end of the of the working life.
The average Joe Doe is better off with having a passively managed funds in any case.

Nermal

Henry Ford III wrote: »

People get overly hung up on charges I think.

Sure lower charges are better everything else being the same, but a low cost solution is likely to offer less too. A better investment strategy and innovative thinking concerning structure diversification switching and timing are much more important and will potentially make a much bigger difference to your ultimate pension pot than a mini war about minor variations in contract charges.

Twaddle!

Henry Ford III

Augeo wrote: »

Depends on the cost.
Many QFAs and APAs being paid handsomely for doing little to benefit their clients.

Not everyone needs to pay someone to attain " A better investment strategy and innovative thinking concerning structure diversification switching and timing"

When a financial product peddler mentions "timing" "switching" and "will potentially" in the same sentence you know you are getting a speel of rubbish IMO, especially when they are trying to justify the "minor variations in contract charges"

Of course it depends on the cost! It must be reasonable.

I've seen many situations where people have made pretty serious errors in all those areas that have cost them significant amounts of money. They tend to be people who think they know more than they actually do.

Henry Ford III

Merowig wrote: »

A broker is not investing himself - he is selling financial services / financial products and is getting then commision on the sold product for the rest of the lifetime of the product. Naturally maximisng his comission will be then his first priority.

Timing the market is generally a bad idea.
Even the lower cost funds have lifestyle plans as this the law where the funds switch over time automatically from shares to bonds/cash holdings towards the end of the of the working life.
The average Joe Doe is better off with having a passively managed funds in any case.

Nonsense. You can pay for advice on a fee basis too.

Do you recall Equitable Life? Built an entire business on a "no commission" billboard. Many savers and investors still lost millions.

I'm not going to go through the entire compliance regime but it's heavily regulated and aims to protect the consumer. The broker must justify any advice given.

p.s. Interesting that you ignored the most important point in my post too. Advise on proper planning and structure is vital.

Merowig

True - though fee based advise is not that popular in Ireland.
There is a reason that the UK and other countries don't allow "financial advisors" to sell products...

Doing the retirement planning yourself is not rocket science...

Henry Ford III

Merowig wrote: »

True - though fee based advise is not that popular in Ireland.
There is a reason that the UK and other countries don't allow "financial advisors" to sell products...

Doing the retirement planning yourself is not rocket science...

IFA's can certainly sell products in the UK. Not sure about elsewhere.

p.s. If retirement and other financial planning were that easy there'd be no financial services operating, and no requirement for a degree level qualification to practice.

Henry Ford III

Henry Ford III wrote: »

IFA's can certainly sell products in the UK. Not sure about elsewhere.

p.s. If retirement and other financial planning were that easy there'd be no financial services operating, and no requirement for a degree level qualification to practice.

Level 7 on the national framework is indeed a degree level qualification, however an honours degree is level 8. The modern level 7 degree is what was a diploma in the early 00s.

You can be APA for Pensions after passing two QFA modules and that meets the central banks minimum competency requirement
Achievable in about 40 hrs study if you are averagely intelligent...... level 7 qualified too of course.

Henry Ford III wrote: »

Of course it depends on the cost! It must be reasonable.

I've seen many situations where people have made pretty serious errors in all those areas that have cost them significant amounts of money. They tend to be people who think they know more than they actually do.

I'm sure you've seen many follow advice that cost them significant amounts too if you're in the FS game.

Henry Ford III

Augeo wrote: »

Level 7 on the national framework is indeed a degree level qualification, however an honours degree is level 8. The modern level 7 degree is what was a diploma in the early 00s.

You can be APA for Pensions after passing two QFA modules and that meets the central banks minimum competency requirement
Achievable in about 40 hrs study if you are averagely intelligent.

I was of course referring to a QFA.

Henry Ford III

Henry Ford III wrote: »

I was of course referring to a QFA.

Which is level 7 on the NFQ.
4 more modules ......... 3 of which are multiple choice and the only year they gave a proper exam on the planning module there was uproar and pass marks for most if not all.

There are very intelligent people with level 8, 4 years degree who get the "degree level qualification" speel off a lad in a suit
If only they realised what little it takes to be a QFA.

jimmycrackcorm

To directly answer the ops point. The Six months don't matter other than the employer isn't paying their part, but the op can double up their own avc for the other six months to make up.

I'm assuming that they can't start paying in until then. There's no point staying a PRSA just for the gap as they'll get close to the same benefit from upping the avc during the year.

The Rape of Lucretia

loyatemu wrote: »

Just save x% of your salary and then pay it into the new pension as an AVC when you can.

Would you add it to your 'Normal Contributions' or to your 'AVCs' ?

Henry Ford III

The Rape of Lucretia wrote: »

Would you add it to your 'Normal Contributions' or to your 'AVCs' ?

More planning opportunities if it goes in as an AVC.

The Rape of Lucretia

Henry Ford III wrote: »

More planning opportunities if it goes in as an AVC.

Any negatives ? Technically what is the difference ? Can you declare all your personal contributions as AVCs ?

Henry Ford III

The Rape of Lucretia wrote: »

Any negatives ? Technically what is the difference ? Can you declare all your personal contributions as AVCs ?

Nope. You have to set them up in advance as an AVC I think.