What is a Pension?
Put simply, a pension (also know as a retirement pension or retirement annuity) is a long term savings plan for retirement, with tax relief on money contributed. When you stop working, your income stops also. A pension is to help provide an income in retirement.
Many people acquire several pensions over their working careers. These can be from different types of employment, or personal pensions. We help people to track down their pensions, amalgamate them (if possible) and project forward to retirement to let client’s know what their pensions will be worth to them at that point. This allows planning towards retirement, making the necessary contributions to achieve financial security and comfortable standard of living in retirement.
Company Pensions
These are pensions that you contribute through payroll at work. Contributions are deducted from your pay before tax is applied. Your employer must contribute to a Company Pension Scheme on your behalf. Tax relief is available and contributions are invested.
Company PRSAs
These are pensions that you contribute through payroll at work. Contributions are deducted from your pay before tax is applied. Your employer can also contribute to a Company PRSA on your behalf. Tax relief is available and contributions are invested.
Personal Retirement Bonds
These are lump-sum transfers from a company pension. You will have received tax relief on the contributions. These pensions can only take one transfer/contribution/payment.
Personal Pensions
These are pensions that you contribute to on a personal basis. They are separate to a company pension. Tax relief is available and contributions are invested.
PRSAs
These are pensions that you contribute to on a personal basis. They are separate to a company pension. Tax relief is available and contributions are invested. PRSAs can be amalgamated into company PRSAs and company pensions.
Pensions – what to look out for
The key criteria to look out for in a pension are cost, service, fund performance and product selection
Costs
The main costs to consider are the Allocation Rate and Annual Management Charge. The Allocation Rate is the amount of your monthly investment that gets invested into the pension (eg 98% so that means a 2% charge). The Annual Management Charge is paid annually on the entire pension investment and is usually circa 1%
Service
This relates to the service you get from your advisor regarding technical advice on pensions and general day to day enquiries
Fund Performance
Consistent strong fund performance is crucial to make your money work for you and to see the benefits of compound interest
Product Selection
Most life companies and investment companies have a range of managed funds that are invested in bonds, property, cash and shares. Ethical investments as well as specialised investments such as Clean Energy are not available through all companies
40%
Number of Irish adults who will be fully reliant on State support for income in retirement and will have no pension according to the Central Statistics Office (CSO)
51%
Number of self employed workers who contribute to a pension according to the CSO
Safety Net
This is one of the highest priority goals we recommend for investors, designed to ensure you have an emergency fund.
Pension Calculator
Get in touch
hlambert@Integralfinancialplanning.ie
13 Classon House, Dundrum Business Park, Dundrum, Dublin 14