AIB Personal Pension Plan

La Madame

Hi Folks,
I have a question about my AIB personal Pension Plan - I am kind of unsure if it is worth to keep up with the monthly payments, I am a bit of an amateur when it comes to Banks & Money. Have I actually lost money on this?? Would it be possible and wise to invest this money elsewhere?
The Facts: Start Date: 2002
Finished Date: 2020
Monthly Premiums: Euro 102
Total Premiums paid: Euro10.229
Current Value: Euro 10319
Fund Name: Pension Managed S11

Projection Growth Rate @ 3 % = Euro 21285 in 2020
Projection Growth Rate @ 6 % = Euro 24994

I would be grateful if anybody could shed a bit of light on this.

murphaph

Yes you would have been better off putting it all into a savings account I'm afraid. It clearly hasn't kept pace with inflation. The management fees have likely gobbled up a lot of your contributions :-(

coylemj

Are you self-employed or in employment where there is a company pension scheme?

La Madame

This was meant as an additional private Pension provision.
I work as a Nurse in a Hospital.
What options are there?
Would it be wise to continue contributing for another 7 years?

Henry Ford III

murphaph wrote: »

Yes you would have been better off putting it all into a savings account I'm afraid. It clearly hasn't kept pace with inflation. The management fees have likely gobbled up a lot of your contributions :-(

No income tax relief though.

coylemj

La Madame wrote: »

This was meant as an additional private Pension provision.
I work as a Nurse in a Hospital.
What options are there?
Would it be wise to continue contributing for another 7 years?

Do you have an AVC option at work? Making contributions via AVC at work means you get the tax & PRSI relief straight away. I assume you're claiming tax-relief in arrears on those contributions you're making to the AIB scheme?

At this stage the salesman's commission has been paid so I'd say you should keep paying into the fund because by now most of the money that you pay each month is actually going into your fund (typically almost all of the first year's contributions go in commission) but if there's an AVC option at work, I'd switch to paying into that instead.

La Madame

Thanks everybody for their help! I have to find out about this AVC option.

coylemj

La Madame wrote: »

Thanks everybody for their help! I have to find out about this AVC option.

Ask the HR department but if you're working in a public hospital you may be as well off asking the INMO.

okiss

I would contact prsa.ie.
You can make set up a avc prsa with them and you just pay the management fee each year of the company your policy is with. Prsa.ie get paid directly by the company who you take you pension out with for bring them your business.

A lot of banks/insurance companies will take a % of the funds you pay in each month into your pension ie you pay €100 and they take as an example - 6% so they then put €94 into the funds you have picked or they funds they have advised you to get. Along with this you will also pay a management fee each year on your pension.
Also you may be able to transfer the value of the policy you have at the moment into a new prsa avc.

From what you have told us I would advise you to meet an Independent Financial Advisor you will pay x amount for each hours work they do with and for you.
When you contact them ask what information they need to get from you so you can bring the current policies ect with you to the meeting.
They will look at your own financial circumstances and ask you questions about your age, if you married, if you have a family, about your mortgages, about what pensions, savings, life cover ect you have.
They will then advise you on your pensions, life insurance, savings ect.
You are paying them for there advice so they give you the best product to suit you without considering that company A pays them more commission than company A. Also they will give you a written report showing why you should have product a, b, c.
This could cost you €150 to €300 but it could save you far more money than this long term.
Your own bank will only advise you on the products they have.
I know that a lot of people find pensions ect a bit of a mine field but I hope the information I have given here helps you out.
Like us all you work hard for your money so your money needs to work hard for you.

coylemj

okiss wrote: »

I would contact prsa.ie.
You can make set up a avc prsa with them and you just pay the management fee each year of the company your policy is with.

You cannot setup an AVC independent of your employer's pension scheme.

okiss wrote: »

I would contact prsa.ie.
Prsa.ie get paid directly by the company who you take you pension out with for bring them your business.

And where do you suppose that money comes from?

You are advising the OP to take out a PRSA where the intermediary gets a kickback and you're recommending that she pays for the advice - that's called getting screwed on the double.

The OP has already been fleeced by commission, if she starts a new scheme she will simply be setting the clock back to zero and the next 12 months of contributions will go to that guy who's website you're promoting.

It's also not the first time that you've plugged that guy, your brother perhaps??

http://www.boards.ie/vbulletin/showpost.php?p=84010757&postcount=3

okiss

No this person is not my brother or in any way connected with me.
If I can put money into a pension with out paying for example 6% a month to a bank/insurance company every time I contribute I will let other people know about it.
If you pay €200 a month into a pension and lose €12 euro a month due to % the bank take each time you put money into a pension - this is how much of your money will be taken by the bank over the space of x period of time
€12 x 12 months = €144
€144 x 10 years = €1440 over 20 years = €2880 over 30 years = €4320

The above figures do not take in to consideration that you may increase your payments over this period of time. Nor does in take into consideration that from your first payment into the pension your money is buying more units.
Over a long period of time this can make a big difference to the value of a pension fund as you will have a higher number of units.

The values of these units can rise and fall over this period of time but if you buy 20 unit for €100(€5 a unit) today and in 30 years time these same units are worth €40 euro each.

A) In 30 years time each unit is worth €40
20 units = €5 today / in 30 years time €40 x 20 = €800

Doing via a bank
You are buying 18 units at €5 / in 30 years time €40 x 18 = €720

The value of fund when you get to pension age will be higher in a than in b.
I am not a actuary so am unable to work out the apox value of a pension fund over a 20 or 30 year time frame.

The reason I mentioned an Independent financial advisor is that she will pay x amount for there advice which will suit her own particular circumstances.
Every persons circumstances are different and depend on a number of factors - your age, what age you want to retire at, if you have a mortgage, if you have children and what ages they are ect.

If some one told you that on €100,000 you have in savings you can earn €1940 or €1430 before dirt on a 9 month fixed rate account (taken from nca.ie website) which would you pick?

Liam D Ferguson

coylemj wrote: »

You cannot setup an AVC independent of your employer's pension scheme.

You can set up an AVC PRSA of your own choosing.

I have no connection with PRSA.ie although I know the firm's owner, Gerard Sheehy. PRSA.ie is an execution-only service, which means that it doesn't provide advice. In lieu of advice, it reduces the charges on PRSA products. By doing this, 100% of every contribution is invested without deduction and the only remaining charge is the 1% annual charge, which is common to almost all PRSAs.

coylemj wrote: »

...and the next 12 months of contributions will go to that guy who's website you're promoting.

No that's incorrect. See above. 100% of every contribution is invested and the only charge is 1% per year. Have a read of the website www.prsa.ie

Bren157

Liam D Ferguson wrote: »

You can set up an AVC PRSA of your own choosing.

I have no connection with PRSA.ie although I know the firm's owner, Gerard Sheehy. PRSA.ie is an execution-only service, which means that it doesn't provide advice. In lieu of advice, it reduces the charges on PRSA products. By doing this, 100% of every contribution is invested without deduction and the only remaining charge is the 1% annual charge, which is common to almost all PRSAs.



No that's incorrect. See above. 100% of every contribution is invested and the only charge is 1% per year. Have a read of the website www.prsa.ie

By law, a PRSA can only charge 1%pa unless you opt for a non-standard version. So the PRSA.ie deal is grand but not worth it if there is no advice with the fee. Use a fee based "advisor" and not a fee based execute- only office. No comparison...