Need a hand with my pension!

One More Toy

Hello!

Really need a hand with this one, I have a PRSA, which I contribute 15% of my salary (maximum allowed for tax deduction)

I want to join the occupational scheme, the employer matches up to 5%

Can I join the scheme at 5%, and reduce my PRSA to 10%? Thereby still reaching the maximum?

padjo5

You can stop/start/restart/reduce/increase prsa payments at any time really, so that should be no problem at all. Just speak to your provider/advisor for a steer on how best to make the change....

PaulM1977

You can. You could also stop the contributions in to the PRSA and pay the full 15% in to your work scheme to maximise your entitlements at retirement, which can be more advantageous than a PRSA. You can also transfer in your existing PRSA to your work scheme, but if it is worth over €10k you may need to get comparison quotes done for this fund value, based on if it was left in the PRSA or transferred to your work scheme.
Also consider if you see yourself working at this company for the long-term and possibly to retirement age so as to get your full benefits through this scheme.

One More Toy

PaulM1977 wrote: »

You can. You could also stop the contributions in to the PRSA and pay the full 15% in to your work scheme to maximise your entitlements at retirement, which can be more advantageous than a PRSA. You can also transfer in your existing PRSA to your work scheme, but if it is worth over €10k you may need to get comparison quotes done for this fund value, based on if it was left in the PRSA or transferred to your work scheme.
Also consider if you see yourself working at this company for the long-term and possibly to retirement age so as to get your full benefits through this scheme.

Thanks, work only matches up to 5% AFAIK. Plus I wont be staying with them in the long term but I believe the occupational scheme can be transferred into the next workplaces' scheme?

PaulM1977

It can be transferred to a new employer if you leave your job, but the contribution limits for an individual who is paying in to a PRSA or a work scheme are the same, so you can pay the 15% in to your work plan or divide it between the two if you prefer, if you don't see yourself staying there long term.

tomfoolery60

Consider the fees and charges on your occupational scheme v. PRSA. I imagine they are lower (mine were 80% lower!) And it may be worth it to move the old PRSA into the new work scheme if permitted.

Another point - I don't think it is correct to say you can divide the contributions between the work and PRSS - AFAIK you can only contribute to a PRSA in respect to income form an employment if you are not a member of an occupational scheme. So unless OP has a second distinct pensionable income, this wouldn't be allowed.

One More Toy

tomfoolery60 wrote: »

Consider the fees and charges on your occupational scheme v. PRSA. I imagine they are lower (mine were 80% lower!) And it may be worth it to move the old PRSA into the new work scheme if permitted.

Another point - I don't think it is correct to say you can divide the contributions between the work and PRSS - AFAIK you can only contribute to a PRSA in respect to income form an employment if you are not a member of an occupational scheme. So unless OP has a second distinct pensionable income, this wouldn't be allowed.

Interesting, do you have a source?

Carawaystick

If the op contributes 15% to the new work pension and leaves before 2 years, he can get the contributions back with a low rate of tax at a later date if he ever needs cash.

mbradso2003

One More Toy wrote: »

Hello!

Really need a hand with this one, I have a PRSA, which I contribute 15% of my salary (maximum allowed for tax deduction)

I want to join the occupational scheme, the employer matches up to 5%

Can I join the scheme at 5%, and reduce my PRSA to 10%? Thereby still reaching the maximum?

Be careful contributing to 2 pensions at same time from same salary. It was always assumed you could contribute to PRSA and your occupational scheme at same time, but this has be questioned recently, in my place of work.

Speak to your PRSA broker or insurance company and ask for assurances this is ok.

NewCorkLad

One More Toy wrote: »

Interesting, do you have a source?

He is correct if you are contributing to an occupational pension scheme you cannot also contribute to a PRSA and get tax relief. However you can set up a PRSA AVC and continue to pay into this separately to your main scheme.

One More Toy

NewCorkLad wrote: »

He is correct if you are contributing to an occupational pension scheme you cannot also contribute to a PRSA and get tax relief. However you can set up a PRSA AVC and continue to pay into this separately to your main scheme.

Just emailed the pensions board last night, they said that I could, Im really rather confused

"Generally, a PRSA can be used as an AVC fund. Under Revenue rules, any contributions that you pay to your occupational pension scheme need to be taken into account when determining the amount of PRSA contributions eligible for tax relief. If your PRSA Provider is not aware that you are also contributing to an occupational pension scheme, you should notify your Provider immediately, so they can ensure compliance with Revenue rules. "

mbradso2003

One More Toy wrote: »

Just emailed the pensions board last night, they said that I could, Im really rather confused

"Generally, a PRSA can be used as an AVC fund. Under Revenue rules, any contributions that you pay to your occupational pension scheme need to be taken into account when determining the amount of PRSA contributions eligible for tax relief. If your PRSA Provider is not aware that you are also contributing to an occupational pension scheme, you should notify your Provider immediately, so they can ensure compliance with Revenue rules. "

I only discovered this recently and I have 15 years industry experience. If your PRSA is classed as AVC PRSA this would be OK but that would run along side your Occ Scheme.

If in doubt speak to broker and/or Occ Scheme administrators, this is what they are being paid for!!

NewCorkLad

One More Toy wrote: »

Just emailed the pensions board last night, they said that I could, Im really rather confused

"Generally, a PRSA can be used as an AVC fund. Under Revenue rules, any contributions that you pay to your occupational pension scheme need to be taken into account when determining the amount of PRSA contributions eligible for tax relief. If your PRSA Provider is not aware that you are also contributing to an occupational pension scheme, you should notify your Provider immediately, so they can ensure compliance with Revenue rules. "

This just means that you can have a PRSA along with your occupational pension but it must be set up as a AVC. Im not sure if your current PRSA can be turned into a PRSA AVC or if you would need to set up a new one, you will need to contact you PRSA provider to clarify this. You should probably contact an adviser in your area to ensure this is done right.

Just to make you aware if you plan on leaving your current role in the next 2 years your employer can and generally does take back their contributions to your pension. If you are contributing for over 2 years they cannot take back their contributions.