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Worth moving this Personal Pension to a PRSA?

  • 25-11-2002 7:04pm
    #1
    hamster
    Registered Users, Registered Users 2 Posts: 1,766 ✭✭✭


    Should I transfer to a PRSA next year?

    I have been contributing to an Eagle Personal Pension (my 1st) for last 3 year (April 2000). I'm now 29 years old. In that time I have contributed 15% of my PAYE earnings each year into this. I have handed over 19K euro. This is in the Dynamic managed fund (which I was told by Eagle Star is in now the Gross rollup version). The actual value now is approximately 12K which sounds about right since for Aggressively Managed Funds. I'm comfortable with risk but I wonder is the pension charges here a little steep? I'm on the 42% bracket.

    - My pension is in two parts: A monthly (for monthly contributions) and a Single (for AVCs)


    For monthly premiums (flexible contribution policy):
    - The first year 50% of all 12 monthly contributions was taken by Eagle Star, remaining used to purchase units.

    - Annual Management charge: 0.75%
    - Bid/Offer Spread: 5%
    - Allocation of units: 96%
    - Also finally, a policy fee of 3.49 Euro per month.

    I'm assuming that only 96% of a premium is invested then the 5% offer/bid spread kicks in. I think this is case as the single contribution policy below is different.


    For the single contribution policy (for AVCs):

    - Annual Management charge: 1%
    - Bid/Offer Spread: 5%
    - Allocation of units: 100%


    * I'm wondering if the monthly policy is fair and good value for money?
    * Does the relatively low yearly management charge (normally 1%-ish) offset that the fact that only 96% of premium is invested?
    * Even again after the 5% spread?
    * If not, Should I ask for a surrender value and transfer to a PRSA early next year?
    * What charges should I look for? 1% Management charge with a 2%-5% bid/offer spread?
    * To avoid distructive re-entry charges for the transfer should I look seriously at Quinn Life's simple but elegant tracker where wysiwyg and the only charge is a flat 1% Management charge? But would they statistically be around after 40 years like a big name like Eagle Star?
    * Any advice offered would greatly be appreciated. Should I go to someone like myAdviser? Could they really do better? Or I should wait until sometime next year. PRSA "friendly".

    * A final note, after re-reading my policy documents, a conversion to PRSA may be possible:
    "Eagle Star will transfer the value of the Unit Account to the new contract offered by Eagle Star and will inform you of the future terms and conditions at that time, including charges on the new contract. Eagle Star will not charge for the transfer and the value of the new contract will equal the value of the unit account prior to transfer".

    After reading this, this would mean that Eagle Star would have to reduce their charges (ie increase the allocation back to 100%) if I asked for a PRSA conversion to meet the criteria? Would this be worthwhile chasing as it would avoid having to get a surrender value?

    Sorry for list of questions but that 96% allocation escaped my attention (I assumed it what was left after bid/spread offer but obviously not).


Comments

  • #2
    Alan Cummins
    Closed Accounts Posts: 3 ✭Alan Cummins


    Hi,
    I just happened on your thread as part of my research into PRSA's (for an article in the personal finance section of Ireland on Sunday). I am hoping to do a brief interview with a member of the public about their experience so far as PRSA contributors. Ideally (but it's not a definite requirement) I'm hoping to speak to someone who has an occupational pension and has been investigating the possibility of taking out a PRSA also, since the Revenue has introduced new rules to make it easier for this type of pension holder to take out a PRSA. If anyone posting on this thread would be interested in contacting me they can call me on: 0872725732.

    I look forward to your replies.

    Kind regards,

    Alan Cummins


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