When do you plan on retiring...?

Geuze

dingding wrote: »

Also applies to the TUI. Surely the union should act in the best interests of their members. Not in every case, many of the financial products represent very poor value or are bundled with less necessary products to boost cornmarkets profits.

You can buy a PRSA-AVC from other providers.

gaiscioch

rainbowtrout wrote: »

What have you done with your Cornmarket AVC?
Is it just frozen until retirement? Will there be any fees on it? Can you transfer any of it to another AVC?

Just took out the file there to find the precise details. The old Cornmarket AVC was transferred to Zurich as well. It now forms one of the two PRSA 'contract numbers' that constitute my 'fund'. I make no contributions to that AVC but the management charge per annum is 0.75% and there are no other 'contract charges'. It's in a Prisma (Risk Level 6) fund, the 'Unit Type' is 'Accumulator', and its value grew by just over 6% in the previous year. I'm not sure if I could transfer it to another PRSA/AVC, but the management charge was lower if I just left it 'frozen' there.

The Zurich AVC/PRSA fund that I do contribute to is also in a Prisma (Risk Level 6) investment fund and the 'Unit Type' is 'Accumulator'. It has a management charge of 1%, but as this is an active AVC there was also a 'contract charge' which works out at 3.5% of my annual contribution (although that might have been a once-off charge connected with moving as it didn't appear in a more recent mid-year statement). Lastly, the value of that PRSA contract had grown by 6.2% in the previous year.

It might be worth people's time to check their own management fees and returns to see how they compare.

A type of pension called a Personal Retirement Savings Account (PRSA) is one of the easiest ways to open your own pension if your boss does not offer one or if you are self- employed.

There are two types of PRSAs - a standard PRSA and a non-standard PRSA. The charges on a non-standard PRSA might be higher than on a standard PRSA.

With standard PRSAs, you cannot be charged more than a 1pc annual fund-management charge (a fee for the management of your pension fund), while the contribution charge (charged every time you make a contribution to your pension) cannot be higher than 5pc.

A contribution charge of 5pc is still high, however, so go through a low-cost broker if you are opening a standard PRSA. By doing so, you may avoid a contribution charge altogether, which means that your entire savings are invested into your pension from day one - rather than having a chunk of your contribution gobbled up by charges.(60-second guide to getting a PRSA)

This low-cost broker has positive reviews elsewhere on this website, and has a section on that link aimed at teachers who want to take out a PRSA/AVC. They don't give advice, though, but once you've got your advice you should save by purchasing through them (check if there is a 'contract charge' or 'contribution charge' on top of the 1%).

amacca

Sorry if this is a silly and very basic question

are there tax benefits to PRSA/AVCs ...like tax deductibility

does the govt match contributions or a percentage or anything


would a prsa be preferable to making your own investment decisions and investing index trackers/etfs/shares oneself....assuming you knew how of course

acequion

Hi guys, great thread.

I'd be a fairly interesting case as I was almost 40 before I was up and running with pensionable service. Which means I'll have to keep working into my 60's which is fast approaching, but though I hate the train wreck they've made of our profession, I like working and I like teaching so fingers crossed I'll be able for it in my 60's.

However, I'm also quite materialistic and don't fancy the idea of impoverished nether years so I've been doing my best to make provision and here's what I've done:

1. Buying 10 years notional service. Now I hugely pondered over that or AVCs and paid a lot for independent advice which hugely advocated the former. On my contract I have to keep paying it until 65 but am hoping to go at 63 or 64 and yes I know there's a penalty, but what I was told was that how the penalty works is that I'd be docked a few years, so would get 7-8 years back rather than 10 if I went a year or two earlier than contract. Sounds ok to me. I found the pension people in the Dept very helpful and answered all my questions as obviously I had many, requiring a lot of phone conversations with them.
   
2. A Zurich AVC. About 2 years ago I decided I should boost my retirement savings and again after much research decided an AVC was the way to go. I fully second the poster who said we need a sticky pensions thread here for teachers as I had to go all over Boards to get the info but I did get everything I needed here,including the advice not to AVC through Cornmarket, but by an independent broker like Zurich. Very sound advice. However it's a No Advice AVC and if like me you're in the Pass class on all matters financial, it can be very daunting and you will need advice. An accountant friend of mine put me in touch with a financial consultant who set up the whole thing for me completely free of charge as he would get the commission from Zurich. He gave me all the advice I needed and then I got in touch with revenue to organise the tax relief. That took a while to get sorted but once it did it was fine. However, if at any time I modify the amount I'll have to have the tax cert amended again, so it's less hassle to stick with the original amount.

Now people might wonder about all those years up to 40.Well, many of them were spent freelancing abroad so they're lost. However I was back teaching in Ireland by age 35, subbing etc and 2 years TWT, so will be able to get something for them.

Obviously I'm now paying a fortune into my pension but it is tax deductible and hopefully it will be worth it. Definitely people need to make provision in advance,however even with only a few years left it's worth getting an AVC. Much better than regular savings because of the tax incentive. The older you are the more you're allowed save towards a pension, so it's the logical thing to do with any spare cash.

Sorry for the long post,folks. Like I say I'm in the Pass class on these things, so not able to be more succinct. Happy saving OP.:)

Geuze

amacca wrote: »

Sorry if this is a silly and very basic question

are there tax benefits to PRSA/AVCs ...like tax deductibility

does the govt match contributions or a percentage or anything


would a prsa be preferable to making your own investment decisions and investing index trackers/etfs/shares oneself....assuming you knew how of course

All pension conts attract tax relief.

PRSA/AVCs are personal pensions, so no employer cont.

You can think of the tax relief as the Govt cont.

Geuze

acequion wrote: »

Hi guys, great thread.

However, I'm also quite materialistic and don't fancy the idea of impoverished nether years so I've been doing my best to make provision and here's what I've done:

1. Buying 10 years notional service. Now I hugely pondered over that or AVCs and paid a lot for independent advice which hugely advocated the former. On my contract I have to keep paying it until 65 but am hoping to go at 63 or 64 and yes I know there's a penalty, but what I was told was that how the penalty works is that I'd be docked a few years, so would get 7-8 years back rather than 10 if I went a year or two earlier than contract. Sounds ok to me. I found the pension people in the Dept very helpful and answered all my questions as obviously I had many, requiring a lot of phone conversations with them.
   
2. A Zurich AVC. About 2 years ago I decided I should boost my retirement savings and again after much research decided an AVC was the way to go. I fully second the poster who said we need a sticky pensions thread here for teachers as I had to go all over Boards to get the info but I did get everything I needed here,including the advice not to AVC through Cornmarket, but by an independent broker like Zurich. Very sound advice. However it's a No Advice AVC and if like me you're in the Pass class on all matters financial, it can be very daunting and you will need advice. An accountant friend of mine put me in touch with a financial consultant who set up the whole thing for me completely free of charge as he would get the commission from Zurich. He gave me all the advice I needed and then I got in touch with revenue to organise the tax relief. That took a while to get sorted but once it did it was fine. However, if at any time I modify the amount I'll have to have the tax cert amended again, so it's less hassle to stick with the original amount.

Now people might wonder about all those years up to 40.Well, many of them were spent freelancing abroad so they're lost. However I was back teaching in Ireland by age 35, subbing etc and 2 years TWT, so will be able to get something for them.

Obviously I'm now paying a fortune into my pension but it is tax deductible and hopefully it will be worth it. Definitely people need to make provision in advance,however even with only a few years left it's worth getting an AVC. Much better than regular savings because of the tax incentive. The older you are the more you're allowed save towards a pension, so it's the logical thing to do with any spare cash.

Sorry for the long post,folks. Like I say I'm in the Pass class on these things, so not able to be more succinct. Happy saving OP.:)

Zurich are an insurer/pension company, not an "independent broker".

Nothing is "free of charge" - the financial consultant may be charging you as much as Cornmarket would.

The commission comes out of your fund, your money.

Did you check that?

acequion

Geuze wrote: »

Zurich are an insurer/pension company, not an "independent broker".

Nothing is "free of charge" - the financial consultant may be charging you as much as Cornmarket would.

The commission comes out of your fund, your money.

Did you check that?

Yes of course I did. While I can't remember off the top of my head how he is paid, I remember being fully satisfied with everything when it was set up and getting it all in writing. This person was recommended by a good friend of mine. It definitely is a much better deal than I'd get with Cornmarket.

And yes I know what Zurich are,do forgive my fluffing the terminology! But thank you for your concern.

Geuze

For information, here are the Cornmarket AVC fees for the TUI scheme:

https://www.cornmarket.ie/uploads/12748_Update_AVC_charge_statements_11-17_rebranded_TUI.pdf


525 set-up fee
2% ongoing charge on each regular contribution

Both of these are avoided if you use an execution-only service.

AMC = 1.00%

I note that the AMC falls to 0.75% and 0.50% as the fund size increases.


Say you save 500 pm for ten years, so 60k contributed.

You will pay 1,200 + 525 = 1,725 in fees for advice.

I would argue this is bad value.

Geuze

https://cornmarket.cdn.prismic.io/cornmarket%2F9664aa53-335c-47e3-b5af-deca11cb6534_14010+avc+charges+statement+-+irish+life+multi_11-18_form.pdf

More info on Cornmarket fees above.

Applicable for members of the following Irish Life AVC Schemes:
AHCPS, ASTI, DCU, Fórsa (Civil Service), INTO, Local Authority & State Agency,
Nurses and Other Health Professionals, SOLAS, TUI.

This seems to be a more recent document than the one in my previous post.

Scheme Charges:
Consultancy Fee
(deducted monthly from contributions in year one): €595
Contribution Charge
(as a % of each regular contribution): 0%
Contribution Charge
(as a % of each single premium contribution): 4%

Seems to be better value as the 2% contribution charge is gone?

realdanbreen

I think when they make it illegal(it's already immoral) to have teachers giving grinds to their pupils in a hotel lobby two hours after they were 'teaching' them in the classroom might be the time to cash out.

trihead

Information on Notional Service Scheme

https://www.education.ie/en/Education-Staff/Services/Retirement-Pensions/Teaching-Staff/Notional-Service-Scheme

dingding

https://www.education.ie/en/Education-Staff/Services/Retirement-Pensions/supplementary-pension-explanatory-note.pdf

Supplementary Pension Explanatory Note.