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pension question

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  • 15-01-2007 6:26pm
    #1
    bullrunner
    Closed Accounts Posts: 383 ✭✭


    Quick question for those out there in the know on pensions


    If I had 1 pension with a final sum of 1 million in it, would it give the same return as if i had 4 with 1/4 mill each?


    Basically i am looking at spreading my pension between what my work give me and another pension provider in order to reduce the risk of being stuck with a bad pension fund..(diversification and all that!). ...in other words do you get economies of scale for bigger sums of money?


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    #2
    Blackjack
    Registered Users Posts: 3,611 ✭✭✭Blackjack


    bullrunner wrote:
    Quick question for those out there in the know on pensions


    If I had 1 pension with a final sum of 1 million in it, would it give the same return as if i had 4 with 1/4 mill each?


    Basically i am looking at spreading my pension between what my work give me and another pension provider in order to reduce the risk of being stuck with a bad pension fund..(diversification and all that!). ...in other words do you get economies of scale for bigger sums of money?

    Possibly yes, and possibly no. If all 4 are invested in identical proportions of the same thing, then they'll be the same. If they are in Different things, then the return will be totally different.

    Having 1 as opposed to 4 will reduce the costs if costs are fixed. If the costs/Charges are dependant on valuation, then it depends on the %age of the valuation that may be charged as any management fees etc.

    It really does depend on what they are invested in to be honest. You can have a fund of 1 Million as equally diversified as 4 seperate funds, if you are able to specify the funds and asset classes the 1 Million is invested in.


    Edit - Lol at the thread title.


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    #3
    bullrunner
    Closed Accounts Posts: 383 ✭✭bullrunner


    I think I may not have been 100% clear on my question on pensions...

    i meant that if the end value of the pension was 1 mill vs 4 seperate at 1/4 mill...would the 1 pension annuity give the same as 4 smaller pension annuities.



    and yes i spelt the title incorrectly!! Doh!!!:p


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    #4
    Blackjack
    Registered Users Posts: 3,611 ✭✭✭Blackjack


    bullrunner wrote:
    i meant that if the end value of the pension was 1 mill vs 4 seperate at 1/4 mill...would the 1 pension annuity give the same as 4 smaller pension annuities.

    sorry, don't know about that, but I can see no reason as to why they would be different.

    There is a Pensions calculator on the Irish Pensions Board website, it may cover this.


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    #5
    kevhenry
    Registered Users Posts: 4 ✭kevhenry


    Annuity rates will be the same no matter what level of pension you are buying at retirement..

    if you intend on building up a fund of 1 million you probably won't, well depending on your age now, be buying an annuity pension.

    There is a different type of pension available where you dictate your income. These are called 'Approved Retirement Funds' and they essentially work in the same way as your invested pension now but you can draw down on this fund as you please...subject to limits.

    if you want to know anymore...reply


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