Starting a pension at 30

Merowig

Augeo wrote: »

As well as the trail commission does the advisor get some proportion of the 0.9%?

I was under the impression that with Davy for example, of the 0.75% annual fee they may pay up to 0.5% of that to your advisor if you have one.

According to an Excel I got from the Pensionsauthority if you go through an intermediary for the Davy Select PRSA (Execution Only) the AMC is 1%.

That's interesting, the broker seems to get 0.25% of the fund per annum so based on that, not bad if they do nothing except sign you up but personally I would expect the following
- detailed overview of product benefits etc before sign up
- a plan of a portfolio, where my money could/should go and what we could expect to see going forward obviously accepting "the past performance is no guarantee..... " bla bla
- visibility of potential further charges (as we've seen in this thread US domiciled ETFs cost €25 to buy and there's the 15% withheld on dividends)
- strategy on how to avoid them by buying alternatives
- I'd expect annual or bi annual communications, email would be fine, not face to face
- I'd expect the broker to be on the ball regarding currency impact potentially making certain products attractive, for example the FTSE100 is more attractive now that this time last year due to current UK£ weakness
- I'd also expect them to be explaining to me that obsessing over currency etc can be counter productive and that the averaging over time is a safety net when making regular contributions, that considered if I was making my investment every few months rather than monthly it would be semi relevant.
- I'd expect some kind of semi logical strategy for when the market dips significantly how I could potentially benefit or mitigation why no such strategy is worthwhile if one has time on their side for a market recovery.

For all that I'd be happy to pay over 0.25% per annum considering the default Davy Investment Strategy option is 0.75%

Merowig

Augeo wrote: »

That's interesting, the broker seems to get 0.25% of the fund per annum so based on that, not bad if they do nothing except sign you up but personally I would expect the following
- detailed overview of product benefits etc before sign up

makes sense - though the main benefit is 0.75+x amc - if you go through a broker the amc will be then over 1% +x in total

Then a PRSA through LA brokers is cheaper

- a plan of a portfolio, where my money could/should go and what we could expect to see going forward obviously accepting "the past performance is no guarantee..... " bla bla

Makes sense

- visibility of potential further charges (as we've seen in this thread US domiciled ETFs cost €25 to buy and there's the 15% withheld on dividends)
- strategy on how to avoid them by buying alternatives

The first point can be clarified with Davy directly and the second one possibly as well...

- I'd expect annual or bi annual communications, email would be fine, not face to face

Every PRSA has to send you twice a year a projection etc.

- I'd expect the broker to be on the ball regarding currency impact potentially making certain products attractive, for example the FTSE100 is more attractive now that this time last year due to current UK£ weakness
- I'd also expect them to be explaining to me that obsessing over currency etc can be counter productive and that the averaging over time is a safety net when making regular contributions, that considered if I was making my investment every few months rather than monthly it would be semi relevant.
- I'd expect some kind of semi logical strategy for when the market dips significantly how I could potentially benefit or mitigation why no such strategy is worthwhile if one has time on their side for a market recovery.

makes sense though doesn't justify for me paying year over year 0.25% on top which overthise would be invested in the PRSA

For all that I'd be happy to pay over 0.25% per annum considering the default Davy Investment Strategy option is 0.75%

I am not as the 0.25% difference most likely won't be recovered through a higher return as a result of that "advice".

Merowig

Merowig wrote: »

.........


I am not as the 0.25% difference most likely won't be recovered through a higher return as a result of that "advice".

I'm the same as you really, I'd be happy paying it if I didn't have a clue. You must remember many people wouldn't know what an EFT was nevermind that some cost money to buy depending on where they are domiciled.

If you didn't have a clue going with a good broker who would actually try and manage your pension by advising you regularly I'd imagine you'd recover the cost compared to following a default strategy or the off the shelf so to speak offerings from Zurich or Irish Life etc.

Merowig

In my opinion only people with some basic financial knowledge (which can be learned quickly) should go with a Davy PRSA - I am doubtful that replacing that knowledge by going through a broker will generate a higher return than going with an of LA broker offerings for Zurich (if you opt for a fund there with just equities) or a passively tracked fund with Irish Life.

The total cost would be over 1% - and this accumulates quickly over the years to significant sums.

I can't speak from experience as I don't use a broker myself but the Zurich and Irish life offerings are terribly traditional in high risk/high reward (ie equities) in early years and move to bonds/deposits towards retirement.

Surely there are plenty brokers who are exchange rate & market peak/trough savvy who can advise prudently at times when there's opportunity or overperformance.

I suppose finding them is the issue, I certainly spoke to none thst persuaded me to go with their offerings.

Merowig

You don't need to go with the lifestyle option/ default strategy for any PRSA - you can pick any of the offered funds and mix&match.

It is difficult to time the entry into a market right - better is to consistently invest in monthly over long periods to average entry costs out.
In my opinion investing differs from trading. In trading you buy at bottom and sell at top in opposite to buy and hold.

yabadabado

Im 33 and have been paying into a public service pension for 10 years.I have received 10K from a scheme I was in and am wondering what would be a good place to invest in?
Would it be worth my while putting this into a private pension and also paying in a sum every month or what would be a good route to go down ?

billyhead

yabadabado wrote: »

Im 33 and have been paying into a public service pension for 10 years.I have received 10K from a scheme I was in and am wondering what would be a good place to invest in?
Would it be worth my while putting this into a private pension and also paying in a sum every month or what would be a good route to go down ?

You should start an AVC plan. I have mine with New Ireland Assurance and like you am a public servant

tatumkelly

yabadabado wrote: »

Im 33 and have been paying into a public service pension for 10 years.I have received 10K from a scheme I was in and am wondering what would be a good place to invest in?
Would it be worth my while putting this into a private pension and also paying in a sum every month or what would be a good route to go down ?

You can move these funds into a PRSA if you wish to continue making contributions. Level of contribution will be a factor in who is the best provider to go with is/who will actually take the business. Some providers have a minimum level of contribution.

For the person above who asked if the broker gets a portion of the AMC quoted; the answer is no. The Annual Management Charge is the flat rate a life co charges for the admin of the scheme. A broker has the option of adding PMC (Plan management charges also known as trail comm) in increments of 0.25%. This is added to the AMC to give the total management charge.... most brokers will not explain the breakdown of the total.

Re Davy's 0.8% AMC, no the broker does not get 0.5% of this. This is Davy's fee.

DK man

Hi folks.

I am a teacher and Just had a meeting with a cornmarket fa re pension.


Entered teaching age 30 so won't have full state pension age 60 (if I last that long). Considering avc - now age 46.

Was very surprised to learn that when I retire age 60 I will get my pension 30/40 minus state pension until I am 68! Seems very unfair... He said I would have 14k / year from 60-68 (why do I bother working! Would probably have more on the dole)

I can afford to top up pension but want to do some homework to make sure I understand the variables. Fa was a nice guy but no doubt he was telling me what he wanted me to know...

I could afford to pay €400 / month.... Also considering buying an investment house as another pension option...

Any opinions would be most welcome

Geuze

DK man wrote: »

Hi folks.

I am a teacher and Just had a meeting with a cornmarket fa re pension.

Entered teaching age 30 so won't have full state pension age 60 (if I last that long). Considering avc - now age 46.

Was very surprised to learn that when I retire age 60 I will get my pension 30/40 minus state pension until I am 68! Seems very unfair... He said I would have 14k / year from 60-68 (why do I bother working! Would probably have more on the dole)

PLEASE, PLEASE, note that Cornmarket are sales reps earning commission, so they won't always know everything, and are biased.


Please note that is you retire at age 60, with 30/80ths work pension, yes, it's true that the State Pension won't start till age 68.

BUT

You may be eligible for a "supplementary pension" between age 60 and 68, until the SP starts.

Please do some research on that.

PLEASE - make sure you know exactly what you are doing before you sign up to Cornmarket.

DK man

Thanks geuze - much appreciated.

I think I need to go to an independent fa... Does anyone know any in the Dundalk area who are good?

Thanks dk

JJs Left Hand

Hi.. I set up a personal pension plan in June which I pay by direct debit every month out of my net pay.

Can anyone tell me when I'm supposed to apply to the revenue for the tax back on these contributions? Do I wait the 12 months or do it in the calender year or.....?

BrianD3

DK man wrote: »

Thanks geuze - much appreciated.

I think I need to go to an independent fa... Does anyone know any in the Dundalk area who are good?

Thanks dk

I have yet to come across anyone (independent financial adviser, union rep, payroll dept or anyone else) in any location who can give me information about the public service supplementary pension and give me confidence that they know what they're talking about.

I think the problem is that not many Class A public servants have retired yet and many senior staff working in payroll/HR and union reps would have entered the service pre 1995 i.e. be class B/D and don't give a crap about the pensions of their Class A colleagues.

Then you have Cornmarket reps being invited into public service workplaces and failing to mention the supplementary pension (as in your case) either because of ignorance or because "forgetting" it helps them to sell AVCs. You shouldn't have to come on his website saying that you are thinking of an AVC and then have it pointed out to you that there may be a supplementary pension which could change your calculations very significantly.

IMO the unions messed up by agreeing to let these salesmen into workplaces to give their "information sessions" :rolleyes: Probably because many union people are financially illiterate and are ripe for having the wool pulled over their eyes.

Merowig

In regards to opening a PRSA and having the Tax benefits: you can as well open one.



In regards to an occupational pension scheme
http://www.pensionsauthority.ie/en/LifeCycle/Joining_a_plan/Part-time_work_job-sharing/