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Personal pension vs. PRSA (BoI life)

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  • 16-10-2013 11:29am
    #1
    kingQuez
    Registered Users Posts: 1,210 ✭✭✭


    I was advised by BoI life to take out a personal pension, rather than a prsa, based on their fund management charge that I'd be paying. I was told it would be fixed at 0.75% pa for the life of the policy, as opposed to the 1% associated with a prsa. Given the main difference between a personal pension vs. a prsa is the regulation of their notifications, the fixed charging structure, and capped fees, I was on the fence until they told me that the management fee was fixed for the life of the personal pension policy.

    I received the policy documents recently, which explicitly state that they can change the fund management fee. After calling them to ask about it, I was told that they wouldn't commit to that fixed fee in the policy, but that historically they have never changed the fee when a policy has been opened.

    The fee being fixed was the sole reason I was willing to opt for the personal pension over a prsa. This not being part of the contract is a concern for me, even if it hasn't changed historically. Surely this was why PRSAs were setup and regulated as they are?

    I'm curious if anyone has experience/concerns/thoughts on this? I'm tempted to dump the personal pension and reopen it as a prsa.


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    #2
    Browney7
    Registered Users Posts: 3,100 ✭✭✭Browney7


    kingQuez wrote: »
    I was advised by BoI life to take out a personal pension, rather than a prsa, based on their fund management charge that I'd be paying. I was told it would be fixed at 0.75% pa for the life of the policy, as opposed to the 1% associated with a prsa. Given the main difference between a personal pension vs. a prsa is the regulation of their notifications, the fixed charging structure, and capped fees, I was on the fence until they told me that the management fee was fixed for the life of the personal pension policy.

    I received the policy documents recently, which explicitly state that they can change the fund management fee. After calling them to ask about it, I was told that they wouldn't commit to that fixed fee in the policy, but that historically they have never changed the fee when a policy has been opened.

    The fee being fixed was the sole reason I was willing to opt for the personal pension over a prsa. This not being part of the contract is a concern for me, even if it hasn't changed historically. Surely this was why PRSAs were setup and regulated as they are?

    I'm curious if anyone has experience/concerns/thoughts on this? I'm tempted to dump the personal pension and reopen it as a prsa.

    Its a caveat that the providers put into the conditions but its something they'd do as a last resort. I googled the Irish life policy conditions and they also have a caveat saying they can increase the management fee if the board of directors passes a resolution to do so.

    Non standard PRSAs wouldn't be as regulated but you'd have greater fund choice than on a standard PRSA because PRSA regulations prohibit specialist concentrated funds being made available to Standard PRSAs


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