Paying a lump sum into a pension to lower 2017 tax

Heres Johnny

I think that was my advice to you and I meant go to a few commission advisors and get a proposal from each. This won't cost you a penny just a bit of time.

Then bring it to 1 fee based advisor and let him analyse your quotes/proposals and make a recommendation.

St1mpMeister

I've just decided on a guy with 80 positive reviews on Google and he seems pretty forthcoming and clear in our conversations so far so I'll risk it

Thanks for advice all.. I'm sure I'll be back with a few more questions before I meet him...

St1mpMeister

I'm meeting the advisor next week, and in the meantime he has sent on a few pension comparison sheets with plans he suggests would be suitable for me (we select the fund next week). I originally thought that we would discuss this at the meeting but as the meeting is an hour long I'm guessing the meeting is there to focus on which funds to go for.

He had suggested Zurich Life.

So from the below list does anything jump out as good/bad options?


Name|Allocation Rate|Fund Management Charge|Policy Fee|Product Management Charge|Commission|Gross Allocation Rates
Aviva - Aviva Pensions Range 2 - single contributions|105%|0.9%|None|None|0% - 5% (in bands of 0.25%). A clawback period of 2 years applies to the commission paid. Fund Based Commission: 0% - 1.00%|The allocation rate for single premiums will be reduced if the term to retirement is less than 9 years at the date of payment. The reduction is 0.5% for every full year that the term is less than 10 years. For example, if the term is 6 years and 3 months, the full years remaining to retirement is 3 full years less than 10, so the allocation is reduced by 1.5%.


Friends First - Conductor (Financed Option |103%|0.65%|€52.50|Additional Plan Charge p.a: 0.25%|Initial commission of up to 5% can be deducted from the allocation rate; trail commission of up to 0.75% p.a. can be added with a corresponding increase in total fund charge.|100% + term factor. Term Factors: <€15,000: 0.33% * term, Max 3%, <€30,000: 0.33% * term, Max 4%, €30,000+: 0.33% * term, Max 5%. NOTE: Higher allocation (max 3%) applies where term is at least 9yrs. Higher allocation (max 4%) applies where term is at least 12yrs. Higher allocation (max 5%) applies where term is at least 15yrs.

Irish Life - Complete Solutions 2 Bond|100%|0.75%|N/A|Yearly plan charge: Either 0.25% or 0.50% of the value of the fund may apply, depending on the commission option chosen.|0.75% Base AMC Options (With No Trail Commission). Initial Commission: 0% to 5%. Alternatively, the commission options shown above are available with 0.25% or 0.5% Trail Commission. This increases the Base AMC by 0.25% and 0.5% respectively.| 100% Gross allocation rate (Before Commission) applies on amounts of €3,000 or more.

Zurich Life - Zurich Single Save Pensions|105%|1%|N/A|N/A|Single contribution commission: Full percent increments from 0% to 5% (or to the max gross allocation available dependent on age at entry). Trail commission Option: of 0%, 0.25% or 0.5% available| Max 105% gross allocation (before deduction of commission & age dependent). Maximum age at entry: 105% gross = 55 next birthday. 104% gross = 60 next birthday. 103% gross = >60 at entry. Early surrender penalties: 5/4/3/2/1% in years 1/2/3/4/5 on any full or partial encashments.



One thing I noticed in the Zurich Life one was for "Death Benefit" which is:

Death benefit: Bid value of the units held at the date of notification of death.

whereas all the others had

On your death the value of your policy is passed over to your dependants as part of your estate.

What's the meaning of the Zurich death benefit?

St1mpMeister

any thoughts on the above? Cheers

ANXIOUS

St1mpMeister wrote: »

any thoughts on the above? Cheers

€50, payable by bank transfer.

St1mpMeister

ANXIOUS wrote: »

€50, payable by bank transfer.

Meaning... ?

Oral Surgeon

https://www.youtube.com/watch?v=U7pnhmLuQmE

St1mpMeister wrote: »

Meaning... ?

https://www.youtube.com/watch?v=U7pnhmLuQmE

St1mpMeister

Riiight.

Hmm this thread was doing so well, but when I actually come with questions about specific pension plans it descends into farce.

Nice one lads, cheers

St1mpMeister

St1mpMeister wrote: »

Perfect thanks.

Does being self-employed change anything regarding the pension-related tax reliefs I can get, or just same as before?

if self employed so that you can qualify for an executive pension the effective tax relief includes the PRSI & USC too as you can make the contribution straight from company money.

You can fund an executive pension heavily if you do wish... there's an actuarial calculation that takes into account your salary, age, existing pension pot etc that tells how much you can contribute per annum

Heres Johnny

Augeo wrote: »

if self employed so that you can qualify for an executive pension the effective tax relief includes the PRSI & USC too as you can make the contribution straight from company money.

You can fund an executive pension heavily if you do wish... there's an actuarial calculation that takes into account your salary, age, existing pension pot etc that tells how much you can contribute per annum

Self employed can't fund an executive pension, only if you have a limited company can you do that, you are then technically not self employed anymore you are a company director.

Heres Johnny

Heres Johnny wrote: »

Self employed can't fund an executive pension, only if you have a limited company can you do that, you are then technically not self employed anymore you are a company director.

"if self employed SO that you...." was my lazy way of addressing that.

company directors of one director companies are essentially self employed in most cases....they own, manage and work in their own company. Self Employed, as you well know.

St1mpMeister

Ignoring the self-employed aspect for now and concentrating on the plans I mentioned, assuming I put in the max allowable per month (25% of monthly income) do any of those plans stand out?

again use a hypothetical 1.25K per month as the 25%.

Heres Johnny

Augeo wrote: »

Heres Johnny wrote: »

Self employed can't fund an executive pension, only if you have a limited company can you do that, you are then technically not self employed anymore you are a company director.

"if self employed SO that you...." was my lazy way of addressing that.

company directors of one director companies are essentially self employed in most cases....they own, manage and work in their own company. Self Employed, as you well know.

I know people that are directors often call themselves self employed but it's an important distinction in this industry as to the type of pension allowed.

Henry Ford III

St1mpMeister wrote: »

Ignoring the self-employed aspect for now and concentrating on the plans I mentioned, assuming I put in the max allowable per month (25% of monthly income) do any of those plans stand out?

again use a hypothetical 1.25K per month as the 25%.

Your adviser will tell you all this. That's what you are paying them for. You and he/she will need to agree the charging structure too - it's negotiable.

p.s. The death benefit for Zurich is the same as the others but just expressed differently.

St1mpMeister

Henry Ford III wrote: »

Your adviser will tell you all this. That's what you are paying them for. You and he/she will need to agree the charging structure too - it's negotiable.

So I'm guessing I just say "I want to use the plan where I pay the least" ?

noodler

St1mpMeister wrote: »

Riiight.

Hmm this thread was doing so well, but when I actually come with questions about specific pension plans it descends into farce.

Nice one lads, cheers

Ah come on now, people have been incredibly patient with you.

St1mpMeister

noodler wrote: »

Ah come on now, people have been incredibly patient with you.

In general yes, but once I reached a fairly critical decision I got two meaningless posts a few days after posting.

I appreciate the help, not the nonsense.

Oral Surgeon

St1mpMeister wrote: »

In general yes, but once I reached a fairly critical decision I got two meaningless posts a few days after posting.

I appreciate the help, not the nonsense.

Dude, you need to relax, you take the good with the bad on a free forum.

Henry Ford III

St1mpMeister wrote: »

So I'm guessing I just say "I want to use the plan where I pay the least" ?

If that was the case you'd go with a discount Broker.

You need a good value plan, with the most appropriate investment options, and costed in such a way that the advisors costs will be met.

So if the advisor costs say 10 hours at say €150 an hour and there's a commission credited against your bill leaving your overall costs optimised.....

Talk to the advisor. It's not that straightforward.

St1mpMeister

Oral Surgeon wrote: »

Dude, you need to relax, you take the good with the bad on a free forum.

This isn't After Hours, the posts were irrelevant to the discussion which has otherwise been great and were conspicuous by being the only responses to a serious question.

Henry Ford III wrote: »

You need a good value plan, with the most appropriate investment options, and costed in such a way that the advisors costs will be met.

OK gotcha, hence the negotiation part. Thanks.

St1mpMeister

Perhaps this has been mentioned already but, for the record, what is the benefit of going through as broker vs approaching Zurich / Aviva directly?

Will they not be able to match the same Annual Management fee as they offer through brokers?

Henry Ford III

St1mpMeister wrote: »

Perhaps this has been mentioned already but, for the record, what is the benefit of going through as broker vs approaching Zurich / Aviva directly?

Will they not be able to match the same Annual Management fee as they offer through brokers?

I've mentioned it earlier.

St1mpMeister

Sorry yes post #60

Henry Ford III wrote: »

Going to an Insurer direct won't get you was good deal either. They'll advise you get a Broker, or talk to their direct sales people who are tied agents. See paragraph 2 above.

What is a "bad" deal out of interest (by going direct)? As in what are the different specific factors that would make going direct a bad idea?

For example as listed earlier, I know what Zurich's costs are going through the broker.

If Zurich offered me the same deal, except I don't need to pay the brokers fee, what other possible disadvantage is there?

Fund selection worse or something else?

Henry Ford III

So you're using a broker to identify the most suitable product and fund and then going direct to avoid paying for the advice?

As has been mentioned a discount broker is what you're looking for in that case. Going direct won't get you any discount.

p.s. If I was the broker who did the legwork for you I'd bill you for the time.

Heres Johnny

OP I think you are massively hung up on charges and don't want anyone to make money from your business. Being that hung up on charges is going to result in you either not starting a pension or investing in the cheapest passively invested fund out there.
You are paying for the fund manager in the investment arm of whichever company you go with, you are paying for the ongoing advice of the broker or agent that sets you up.
You are going to end up with a discount broker offering no advice at all and no control over how your money is invested in an asset split.
I advised for years and I made good money and I keep an eye on the funds I placed people in, and over the term of a pension they will make back what I cost them multiple times (think 30 to 50 times) and make no apology for charging and charging well.
You are looking for execution only prices which is the cheapest, nastiest way to invest and it's good for someone in the know about how they want to invest.

St1mpMeister

Henry Ford III wrote: »

So you're using a broker to identify the most suitable product and fund and then going direct to avoid paying for the advice?

As has been mentioned a discount broker is what you're looking for in that case. Going direct won't get you any discount.

p.s. If I was the broker who did the legwork for you I'd bill you for the time.

No I'd pay him for the time alright. He didn't do any legwork apart from just send me on the latest fees for 4 pension companies he represents.

No reports are done or anything, but I'll pay €200 or whatever it was for forwarding on the document.

But I don't need to pay €500 extra for the full financial plan and application forms etc.

I'm trying to establish what downside there is for going direct to Zurich, for it is they that have the best deal apparently.


e.g. .. broker says management charge is 0.75%, and no sign up fees. So I go ahead and pay another €500.

I contact Zurich and they say they can offer the same. I go ahead and don't pay €500.

What's the difference?

As in, I'll be choosing the funds myself as I want control in this area and will do the groundwork research etc.

Henry Ford III

4 agencies? What sort of broker is that?

This isn't the first time I've said this but going direct won't get you extra value. You'll end up with the insurers direct sales people (who are tied agents).


p.s. If you chose and control the funds yourself why not just go with a discount broker?

St1mpMeister

Henry Ford III wrote: »

4 agencies? What sort of broker is that?

I thought brokers have pension plans they recommend based on a selection of companies they use? The guy I received the documents from listed 4 options, but didn't offer anything from HSBC etc.

Henry Ford III wrote: »

This isn't the first time I've said this but going direct won't get you extra value. You'll end up with the insurers direct sales people (who are tied agents).


p.s. If you chose and control the funds yourself why not just go with a discount broker?

Is "Discount Broker" an actual term I search for on google, or is it just a cheaply priced broker?

St1mpMeister

When I googled "Discount Pension Broker", the aforementioned LA Brokers came up, but they only seem to deal in PRSAs.

I'm still not clear on what a PRSA is, just that it isn't "as good" as a normal pension for larger monthly payments (like 25% of my salary).

Anyway back on point.. their Zurich page mentions the Annual Management charge for them is 1% (with .25% commission) whereas the broker I was talking to says he can get it for 0.75% (and I pay him the €700 once off fee, which works out cheaper over the long term).

So in this case I can see the benefit of going to the broker.

But apart from that saving, I still don't know why a broker is required because I'm up for doing the fund research myself.
Should I expect him to monitor my pension status of the years to come? I'll be doing that myself anyway.

I'm already on the best mortgage rate available too as I did my own research. I do monthly financial reports so I'm fully in control of my finances.

So in one sentence why is a broker a good idea (apart from the cheaper management fee in the above case). I'm just curious what service I should be expecting as I've never needed outside advice on my finances before.

Heres Johnny

If you dont want to pay anyone anything at all and are well able to control your own fund, what you want is a small self administered scheme. See how you get on with that. Have a Google.