r/irishpersonalfinance Sep 21 '21

What age are you, and how much is in your pension(s)? Retirement

With pensions in the news, I thought this would be an interesting discussion.

I am 30, and have 1 pension that currently contains €62,399.

I currently contribute 15% and my employer contributes 6%. Come January, I will up my contribution to 20%. I would have 2 pensions, but I merged them as my current one has much lower fees. My pension is 100% in Indexed Global Equity.

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u/privlko Feb 02 '22

Hey, I have a question about this. I'm trying to invest a portion of my money into a specific Indexed Global Equity Fund, but the sales rep is constantly redirecting me towards a PRSA. Am I right in thinking that this is a different thing? When I ask about setting me up with a specific fund that I want to join he replies 'it's not available on this plan [PRSA]'.

I could be totally wrong, I have no idea about pensions. Am I missing something?

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u/0mad Feb 02 '22

PRSA = Personal Retirement Savings Account. It is an account where you "save" (invest) for retirement.

There are many different PRSA providers such as Irish Life, Zurich. Each provider (typically) limits the funds available to for investment in their PRSA. Irish Life want you to invest in Irish Life funds (MAPS). Zurich in theirs (PRISMA).

Typically these are expensive, actively managed (a con), and have poor performance. Typically. I believe my pension (Invesco) have an Indexed Global Equity Fund Irish Life fund available - which I invest in.

sales rep is constantly redirecting me towards a PRSA

Sales reps work on commission, and active funds are expensive for this reason, $$$. I believe (don't quote me) it is in their best interest to shill an Active fund. If the sales rep cannot provide what you are looking for, move on. No need to settle here.

As well as fund choice (Indexed Global Equity Fund is exactly what you should be seeking) you should be looking at fees. There is an AMC (average? management fee), lower = better. But there is also contribution fees/rates. You will often see 95% contribution. This is bonkers! Every €100 you contribute, they take €5. This can and should be avoided at all costs.

This is not financial advice, but here are other areas to explore:

  • Tell your sales rep exactly what you are looking for, and drop him if he cannot provide it. He is selling a product you do not want.
  • Research Davy's PRSA. It is often mentioned on this sub due to it's low fee (i think 0.75%), it's fund choice (you can invest in Vanguard funds), and it's 100% contribution.
  • LA Brokers often pop up here too. Read their PRSA page (nice explainer on the 5% charge), 100% contribution, Zurich
  • Shop around. Everyone wants your business, so be sure you get what you want.