Multinational Sector Staff Advice

October 14, 2020

I have many times over the past 10 years sat across from clients – who work in multinationals – and marveled at how much the company provides for them. Typically they are in receipt of Salary, Bonus, Stock Options, Death In Service (Life Cover), Income Continuance (Sick Pay) and Health Insurance. That said, many in the sector will say they work hard for what they get and I would agree.

From a financial planning point of view, most is covered in the above. Where I have found Multinational Sector Staff to need advice is when they have moved company a number of times and have numerous pensions on different schemes.

These can prove difficult to manage for a number of reasons;

  • Moving House – pension companies can often be the last on the list of companies to update new address info. The upshot of this is that any pension info goes to your previous address. People quickly lose track of where the pension is or how to find out
  • Where to Start – if you have located your pension it can be difficult to make a clear assessment on what to do. Pension correspondence can have jargon and can be tricky to understand
  • Lack of Time – sometimes you just don’t have enough time or head space to start looking at these things. Work/Social Life/Exercise/Family takes up all available time and energy

To summarise options:

Company Pensions

If you have moved to a company with a pension scheme you may (most likely can) transfer into this scheme. This can be useful to streamline your pensions and keep everything together. It is useful to do a cost comparison to see what the charges are on transfer and also in the new pension scheme.PRSA’s​If the value of of your company pension is worth less than €10,000, you have less than 15 Years service or the pension scheme is winding down, then you can transfer into a PRSA – either company or individual. It is useful to do a cost comparison to see what the charges are on transfer and also in the new PRSA.​

Personal Retirement Bonds​

These are lump sum transfers from a company pension and can only take one transfer/contribution/payment. PRB’s typically give greater control over the management of a pension. The policyholder has greater ability to move funds and also can access a PRB from age 50. This can be a useful contingency fund but also allows a ‘staggered retirement’ where you can drawdown different pensions when it suits you.

There are merits to all options. Please contact us today on 0877785325.

Covid 19 and it’s impact on investments

May 1, 2020

Where to next for the investment markets?

There is a disconnect between that is happening in the economy and the performance of the stock market.

In February 2020, fear about the potential public health and economic consequences of COVID-19 began to rock the stock markets. What followed was a sharp and unprecedented drop in the markets that I have never seen before. Over the following 6 weeks, regular daily drops of 4-5% were recorded across global equities as investors fled equities and predicted a sharp recession and the knock-on effects on the listed companies on the stock markets.

Substantial Central Bank intervention turned the tides for investment markets as Central Banks across the World announced trillion dollar/euro fiscal stimulus packages, in addition, to already rock bottom interest rates and increased Government Spending.

How does all of this impact investment markets?

Economies are made up of business spending, consumer spending and government spending. Governments are increasing spending through a range of benefits such as Pandemic Unemployment Payment and Credit Guarantee Schemes to offset the drop in business and consumer spending.

Investors are forward-looking so they will be betting that, after lockdown during which the global economy contracted sharply (some countries contracted up to 25% during this time frame), that the global economy will begin to recover and will be helped massively by substantial Government and Central Bank intervention.
So while things are pretty bad on the high street, investors are betting the worst is over and they have been buying in at discounted levels on the basis of strong long-term returns from a low basis.

Investment markets typically move higher after monetary policy intervention (Central Bank stimulus) and periods of volatility. We have had significant amounts of both over the past 4 months so indicators are that investment markets will move higher albeit with some potholes. A COVID-19 second wave could put temporary pressure on returns.