Personal Retirement Savings Accounts (PRSAs) – A ......PRSAs are generally low cost, easy-access...

Personal Retirement Savings Accounts (PRSAs) – A Consumer Guide

www.pensionsboard.ie

Copyright: The Pensions Board and Consumers’ Association of Ireland.

Researched, written and compiled by the Consumers’ Association of

Ireland in conjunction with the Pensions Board.

Consumers’ Association of Ireland

43 - 44 Chelmsford Road

Dublin 6

Tel (01) 497 8600

Website www.thecai.ie

Email [email protected]

The Pensions Board

Verschoyle House

28-30 Lower Mount Street, Dublin 2

Tel (01) 613 1900

Fax (01) 631 8602

Email [email protected]


The Pensions Board has prepared this booklet in conjunction with the Consumer

Association of Ireland for the benefit of persons interested in PRSAs. We have made

every effort to ensure that it is correct, however, no liability whatsoever is accepted

by the Pensions Board, its servants or agents for any errors or omissions in the

information contained in this booklet or for any loss occasioned to any person

acting or refraining from acting as a result of any statement in this booklet.

© The Pensions Board, 2007. All rights reserved.


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Contents

1. Introduction 2

2. PRSABasics 4

3. GettingmyPRSA 7

4. ContributingtomyPRSA 15

5. InvestingmyPRSA 19

6. GettingmyPRSABenefits 22

7. PRSACharges 25

8. Complaints 27

9. QuickTipsonPRSAs 29

10. Examples 31

11. UsefulContacts 33

12. GlossaryofTerms 37

Appendix1–Sample 39

PreliminaryDisclosureCertificateforaStandardPRSA

Appendix2–Sample 44

StatementofReasonableProjectionforaPRSA

�. Introduction

ThisbookletisaconsumerguidetoPersonalRetirementSavings

Accounts(PRSAs).Itshowsyouhowtoapproach,searchandapply

for,andmonitoryourPRSA.Indoingso,wehopeithelpsyouto

understandandmakeinformedchoicesaboutPRSAs.

ThelegislationbehindPRSAsisthePensions(Amendment)Act,2002.

ThisActwasmadelawon13April2002.Itintroducedtheframework

forPRSAsandtheirrelevantarrangements,rulesandtaxreliefs.

TheActalsoallowedfortheestablishmentofaPensionsOmbudsman.

ThePensionsOmbudsmanhasthepowertoinvestigateandresolve

complaintsaboutPRSAsandoccupational pension schemes.MrPaul

KennywasappointedasthePensionsOmbudsmanon6March2003

(seePart 11).

PRSAsaregenerallylowcost,easy-accessprivatepensionsavings

accounts.Theyaredesignedtoallowpeoplesaveforretirement

flexibly,tobeownedbyindividuals(regardlessofemploymentstatus),

transferablefromjobtojob,andavailablefromavarietyofproviders.

ThisbookletisproducedbytheConsumers’AssociationofIreland

(CAI)andthePensionsBoard.CAIisanindependent,non-profitand

non-governmentorganisationworkingonbehalfofIrishconsumers.

Itsaimistorepresentconsumersandmakesuretheirneedsas

consumersofgoodsandservicesaregivenhigherpriority.The

PensionsBoardwasestablishedbytheMinisterforSocialWelfare

underthetermsofthePensionsAct,1990.Itsmainfunctionas

setoutinthatActandamendinglegislationincludesmonitoring

andsupervisingtheoperationofthePensionsActandpension

developmentsgenerally,includingtheactivitiesofPRSAproviders,

theprovisionofPRSAproductsandtheoperationofPRSAs.


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ThePensionsBoardandtheRevenueCommissionersarejointly

responsibleforapprovingPRSAproducts.ThePensionsBoard

supervisestheactivitiesofPRSAprovidersinrespectoftheir

approvedproductsandmonitorscompliancewiththePRSA

legislation.SinceFebruary2003,theBoardhasapproved62

productsfrom10providers:27oftheseareStandardPRSAsand

35arenon-Standard.AlistofPRSAprovidersandtheirapproved

productsisavailableontheBoard’swebsiteonwww.pensionsboard.ie.

ThisbookletcontainsalistofFrequentlyAskedQuestions(FAQs)

forconsumerswhoareconsideringbuyingaPRSA.Throughoutthe

booklet,youwillfindtermsprintedinitalics.Theseareexplained

intheGlossary(seePart 12).

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�. PRSA Basics

n What is a PRSA?

A PRSA is:

n Apersonalpensionplanthatyoutakeoutwithanauthorised

PRSAprovider,

n likeaninvestmentaccountusedtosaveforyourretirement,

n atypeofdefined contribution schemewhereyoumakeregular

contributionstoyourpension,whicharetaxdeductible,

dependingonyourage,

n aflexiblepensionthatallowsyoutoincrease,decreaseorstop

yourcontributionsatanytimewithoutanychargeorpenalty

fordoingso,

n aportablepensionthatcanbecarriedfromjobtojobor

transferredtoanotherPRSAprovider,withoutanycharge

orpenaltyfordoingso,

n apersonalpensionplanthatgivesyouflexibilityindrawing

downbenefitsatretirementageincludingthefacilitytocontinue

contributionswhiledrawingbenefits,

n apersonalpensionplanprovidingyouwithregularinformationto

allowyoumonitoritsperformanceandsuitabilitytoyourneeds.

n Who can take out a PRSA?

PRSAsareavailabletoyouregardlessofyourjoboremployment

status.Therefore,youcangetaPRSAifyouareapart-timeorcasual

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employee,ahighly-paidprofessional,self-employed,ahomemaker,

acarer,acontractor,anemployer,anemployee,apartnerina

partnership,orajobseeker.

YoucancontinuetocontributetoaPRSAafteryourretirement,

aslongasyouarenotaged75andover.

n What types of PRSAs are available?

TherearetwotypesofPRSA:aStandardPRSAandanon-Standard

PRSA.Themaindifferencesbetweenbothtypesarethechargesand

investmentoptions.

IfyouhaveaStandardPRSA,you:

n cannotbechargedmorethan5%onthecontributionsyoupayand

1%ayearonthemanagedfunds.(YourPRSAprovidercancharge

aslittleorasmuchasitlikes,uptothesemaximumlevels.),

n canonlyinvestinpooled funds,exceptfortemporary cash holdings,

and

n donothavetobuyanotherproduct,suchaslifeassurance,

whenyouareapplyingforyourStandardPRSA.(AStandardPRSA

maynotbemarketedorsoldifthepurchaseoftheproductis

conditionalonsomeotherproductbeingpurchased).

Ifyouhaveanon-StandardPRSA,thereisnolimitonchargesandyou

caninvestinarangeoffundsincluding(butnotrestrictedto)pooled

funds.


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n Who contributes to my PRSA?

YoucontributetoyourPRSA.Ifyouareanemployee,youremployer

maycontributebutisnotobligedtodoso.

n Is my PRSA risk-free or backed by any Government guarantee?

No,yourPRSAisnotrisk-freeorbackedbyanyGovernmentguarantee.

Likeotherpersonalpensionsanddefined contribution schemes,your

PRSAisaninvestmentaccountthatprovidesforyourretirement.

ThismeansthatthevalueofyourPRSAcanincreaseordecrease,

dependingontheperformanceofyourPRSA’sinvestmentfunds.

Likewise,ifyouremployerprovidesyouwithaccesstoaStandard

PRSA,youremployerisnotresponsiblefortheinvestment

performanceofyourStandardPRSA.However,thismaynotbethe

casewheretheemployerprovidesaccesstoanon-StandardPRSA.

n Who regulates PRSAs?

ThePensionsBoardandtheRevenueCommissionersarejointly

responsibleforapprovingPRSAproducts.TheBoardsupervisesthe

activitiesofprovidersinrelationtotheirapprovedproductsand

monitorscompliancewithPRSAlegislation.TheFinancialRegulator

isresponsibleforprudentialsupervisionofPRSAprovidersandthe

supervisionofthesalesprocessofapprovedproducts.

TheBoardalsomaintainsapublicregisterofPRSAprovidersandtheir

approvedproductsontheBoard’swebsitewww.pensionsboard.ie.

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�. Getting my PRSA

n Where can I get a PRSA?

TogetyourPRSA,youmustenterintoacontractwithanauthorised

PRSAprovider.AuthorisedPRSAproviderscanincludeinvestment

businessfirms,insurancecompaniesandcreditinstitutions.There

arecurrently10PRSAproviderswith62approvedproducts.

ApprovedPRSAproductsareavailablefrom:

n Ark Life–1StandardPRSA.

n New Ireland/Bank of Ireland Life–3StandardPRSAsand

3non-StandardPRSAs.

n Canada Life–4StandardPRSAsand4non-StandardPRSAs.

n Custom House Capital–2non-StandardPRSAs.

n Eagle Star Life–6StandardPRSAsand11non-StandardPRSAs.

n EBS Building Society–2StandardPRSAs.

n Friends First Life–2StandardPRSAsand4non-StandardPRSAs.

n Hibernian Life–2StandardPRSAsand3non-StandardPRSAs.

n Irish Life–7StandardPRSAsand5non-StandardPRSAs.

n Standard Life–3non-StandardPRSAs.

PRSAsarealsoavailableindirectlythroughagentsauthorisedtosell

PRSAproductsontheaboveproviders’behalf.


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YoucangetalistofapprovedPRSAproductsandtherespective

providersonthePensionsBoard’swebsite(www.pensionsboard.ie).

n Where do I get my PRSA documents?

YourPRSAproviderprovidesyouwithyourdocuments.Ifyoudonot

receiveallofthesedocuments(outlinedbelow),youshouldcontact

yourproviderandrequestthemdirectly.

n What are the PRSA documents?

Application Form:ToapplyforaPRSAwiththeprovider,youmust

complete,signandreturntheapplicationform.Youneedtoprovide

proofofageandyourPersonalPublicServiceNumber(PPSN)with

yourapplicationform.Youmustrequesttheapplicationformfrom

yourchosenPRSAprovider.

Contract:ThisoutlinestheTermsandConditionsofyourPRSA

contract.YoucanrequestaPRSAcontractfromaPRSAprovider.You

shouldreaditbeforeapplyingforaPRSAwiththatprovider.Youmay

needthisdocumentwhenapplyingforbenefits.

Cancellation Notice:IfyouwanttocancelyourPRSA,youmustsign

thisandreturnitwithyouroriginalPRSACertificatewithinthe30-day

cooling-offperiod.TheCancellationNoticeisusuallyenclosedwith

theStatementofReasonableProjection.

Preliminary Disclosure Certificate (PDC):Thisoutlinesthebenefitsona

sampleorpersonalisedbasisthatcanbereasonablyexpectedfromaPRSA

afteracertainperiod,basedonanumberofassumptions.Itoutlinesthe

PRSA’sinvestmentstrategy,charges,taxreliefarrangements,cooling-off

period,riskfactors,andexpectedbenefits.Youshouldreceivethisbefore

youapplyforaPRSA.(Itmayformpartofthecontract-seeAppendix 1).

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Statement of Reasonable Projection (SRP):Thisoutlinesthebenefits

thatcanbereasonablyexpectedforyoufromyourPRSAbasedoncertain

assumptions.Youshouldreceiveitwithinsevendaysafteryousigna

contractwithyourPRSAprovider,andonceayearafterthis.Ifyour

providerisincreasingitscharges(havinggivenyoutwomonths'notice

tothiseffect),youwillreceiveanupdatedStatementofReasonable

Projectionoutliningthesechargeswithinsevendaysofitsdecision.

Youmayalsoreceivesuchastatementonrequest.(SeeAppendix 2).

PRSA Certificate:Thisoutlinesthecontributionsyouhaveagreedto

payatthetimeofenteringthecontractandthecontributionmethod

youwilluse.YouwillreceiveitafteryouopenyourPRSA.Ifyouare

self-employed,youwillneedthisCertificatetoavailoftaxrelief.Ifyou

areanemployeeandyourcontributionsaretobedeductedfromyour

pay,youshouldgivethisCertificatetoyouremployerandkeepacopyfor

yourself.AllPRSAholderswillneedthisCertificatetogettheirbenefits.

Investment Report:Thisoutlinestheinvestmentperformanceonthe

underlyingfundsinyourPRSA.Youshouldreceivethiseverysixmonths.

Statement of Account:Thisoutlinesthecontributionspaidintoyour

PRSAbyyou(andyouremployer,whereapplicable),andthetransfervalue

ofyourPRSAatthedateofthestatement.Ifyouheldanotherpension

beforeyouopenedyourPRSAandtransferreditsbenefitsintoyourPRSA,

thestatementalsooutlinesthetotaltransfervalueasacontribution.You

shouldreceiveaStatementofAccounteverysixmonths.Thisdocument

mayberequiredbyyourlocalInspectorofTaxes.

Certificate of Comparison:YouneedthisCertificateifyouarea

memberofanoccupational pension schemeandaretransferring

yourbenefitsintoaPRSA.ThisCertificatecomparesthebenefitsthat

mayaccruefromthetransferringoccupational pension schemewith


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thebenefitsthatmayaccruefromthePRSAcontract.Youshouldget

thisCertificatebeforetransferringyourmember’sentitlementfrom

anoccupational pension schemetoaPRSA.Youshouldalsoreceive

awrittenstatementoutliningreasonswhysuchatransferisinyour

bestinterests.TheremaybeachargeforprovidingthisCertificate.

ACertificateisnotrequiredwherethetransfervaluefromthe

occupational pension schemeisinrespectofadeferredmember

andthevalue:

n islessthan€10,000,or

n representsarefundofcontributions,orthevalueofaccrued

benefits,toamemberwhoseemploymentrelatedtothe

occupational pension schemeislessthan2yearsandwhohas

nopreservedbenefit,or

n istakenfromanoccupational pension schemethewinding-up

ofwhichhasbeennotifiedtothePensionsBoard.

Disclosure Declaration:WhereitisproposedtoenterintoaPRSA

contractthatreplacesanexistingPRSAcontractoraRetirement

AnnuityContract(RAC),aDeclarationmustbeprovidedtoyoubefore

theinitialStatementofReasonableProjection(SRP)isissued.The

Declarationsetsoutadditionalinformation,includingthefinancial

consequencesofthereplacementcontract.

Non-Standard PRSA Declaration:Thisdocumentisissuedbythe

FinancialRegulator.Youshouldreaditbeforeyoubuyanon-Standard

PRSA.Yourprovidershouldprovideyouwiththisdocumentbutitis

alsoavailabledirectlyfromtheFinancialRegulator(seePart 11).You

mustsignthisDeclarationifchoosingtoinvestinanon-Standard

PRSA.YoushouldalsokeepacopyoftheDeclaration.

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n Do I need to hold onto my PRSA documents?

Yes,youshouldretainallPRSAdocumentsforyourownrecordsand

asevidenceofcontributionsmade.Youwillneedcertaindocuments

toavailofyourPRSAbenefits(PRSACertificate,Contract).Ifyouare

self-employedorpayingcontributionsdirectlyintoyourPRSAyourself,

youwillneedcertaindocumentstoavailoftaxrelief(PRSACertificate,

StatementofAccount).

Youshouldalsoletasolicitor,friendorrelativeknowwhereyoukeep

yourPRSAdocumentsincaseyoudieorbecomeseriouslyill,beforeor

afteryoubegintoreceiveyourPRSAbenefits.

n What are my employer’s obligations in relation to PRSAs?

Since�� September �00�,allemployersarerequiredtoentera

contractwithaPRSAprovidersothataccesstoatleastoneStandard

PRSAisavailableforall“excludedemployees”.

Insummary,youarean “excludedemployee”if:

n youremployerdoesnotofferanoccupational pension scheme,or

n youareincludedinanoccupational pension schemefordeath-in-

servicebenefitsonly,or

n youarenoteligibletojointheoccupational pension schemein

yourcompanyorwillnotbecomeeligibletojointhescheme

withinsixmonthsfromthedateyoubeganworkthere,or

n youareincludedinanoccupational pension schemethatdoesnot

permitthepaymentofadditional voluntary contributionsbythe

members.


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Ifyouareacontractor,self-employedorunemployed,youcan

approachaPRSAproviderdirectlytoorganisesigningaPRSAcontract

withthem.YoucanresearchthePRSAproductsavailablebyconsulting

thisguideandrequestingtherelevantbrochuresfromthevarious

PRSAproviders.Alternatively,youcouldseekindependentfinancial

advice.Alistofapprovedproductsandtheproviderswhosellthemis

availableonthePensionsBoardwebsite:(www.pensionsboard.ie).

n How does my employer provide access to a Standard PRSA?

ToprovideaccesstoaStandardPRSA,anemployermust:

n enterintoacontractwithaPRSAprovidertoprovideatleastone

StandardPRSAto “excludedemployees”(seedefinitionabove),

n notify“excludedemployees”oftheirrightstocontributetoa

StandardPRSA,

n provide“excludedemployees”withaccesstoatleastoneStandard

PRSA,

n allowPRSAprovidersorintermediariestohavereasonableaccess

to“excludedemployees”attheirworkplacesothatPRSAscanbe

arranged,

n allowreasonablepaidleaveofabsence,subjecttowork

requirements,to“excludedemployees”sotheycansetupa

StandardPRSA,

n takePRSAcontributionsfromyourwagesatyourrequestandforward

thesecontributionstoyourPRSAproviderwithin21daysofthe

endofthemonthinwhichdeductionsweremade.Youremployer

cannotchargeyoufordeductingcontributionsfromyourwages.

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n adviseyouinwriting(normallypayslip)atleastonceamonthof

yourtotalcontributionandyouremployer’s,ifany.

n Can I hold a separate Personal Pension and a PRSA at the same time?

Yes,butthecontributionstobothareaddedtogetherwhen

calculatingyourmaximumtaxrelief(whichisdependentonyourage).

n If I am a member of an Occupational Pension Scheme can I take out a PRSA?

Yes.AmemberofanemployersponsoredOPSmayalsotakeout

ataxrelievedPRSAforadditional voluntary contributions.

n Can I cancel my PRSA after signing a contract with a provider?

Afteryousignacontractwithaprovider,youhavea “cooling-off”

periodof30days,fromthedateyouaregiventheStatementof

ReasonableProtection,duringwhichyoucancancelyourPRSA.Ifyou

cancelwithinthe “cooling-off”period,younormallygetafullrefund

ofallcontributionsandtransferspaidtoyourPRSA(Theremaybea

chargewhereyourPRSAproviderisalifecompanyandwheresingle

contributionswereusedandalossincurredasaresultofmarket

volatilityduringthe “cooling-off”period).

n Can PRSA products be suspended or withdrawn?

Yes,thePensionsBoard,inconsultationwiththeRevenueCommissioners,

cansuspendorwithdrawaPRSAproductifaPRSAprovider:

n requestsso,

n hasstoppedtradingformorethan6months,

n hasfailedtomeetitsstatutoryobligations.

n What happens if my PRSA product is suspended or withdrawn?

YourPRSAprovidermustwritetoyouinformingyouthatitsproduct

isbeingsuspendedorwithdrawn.Wheretheproductiswithdrawn,

theprovidermustimmediatelyarrangetotransferyourPRSAassets

toanotherprovider.YouthereforewillcontinuetopayintoyourPRSA

asnormal,butthroughanotherprovider.ThePensionsBoardmust

publishanoticeofaproduct’swithdrawalinatleastonenational

newspaperwithin28daysofthewithdrawal.


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�. Contributing to my PRSA

n Is there a minimum amount that I must contribute to my PRSA?

YourPRSAprovidercannotaskyoutocontributemorethan€300

ayear,€10perelectronicfundstransfer(includingdirectdebit),

or€50forothertypesofpayment.

n Is there a maximum amount that I can contribute to my PRSA?

YoucancontributeasmuchasyouwanttoyourPRSA,aslongas

youmeettheminimumcontributionlevelsassetoutintheliterature

ofeachprovider.However,theamountoftaxreliefyoucangeton

contributionsdependsonyourage.

n How much tax relief do I get on my contributions?

Theamountoftaxreliefyoucangetoncontributionsdependson

yourageasfollows:

Age Limit

Under30 15%

30–39 20%

40–49 25%

50–54 30%

55–59 35%

60orover 40%

Ifyouareasportspersonorprofessionalwhousuallyretiresearlier

thanthenorm(suchasanathleteorjockey),youcangettaxrelief

on30%ofyournet relevant earnings,regardlessofyourage.Reliefis

givenatyourmarginal(higher)taxrate.Thereisamaximumamount

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ofearningsof€262,382for2007(indexedinlinewithanearnings

adjustmentfactorwhichisdecidedbytheMinisterofFinance

eachyear)inayearforwhichtaxreliefwillbegiven.Ifyoumake

contributionsbutdonotgettaxreliefonthembecauseyouexceeded

yourtaxrelieflimitsorarenotworking,youcanapplyfortaxrelief

onthesecontributionsinthefuture.

CertainpeoplecanalsogetPayRelatedSocialInsurance(PRSI)relief

onPRSAcontributions.

YoucangetmoreinformationonthetaxrulesrelatingtoPRSAsfrom

theRevenueCommissioners’A Guide to Personal Retirement Savings

Accounts (PRSAs).YoucanviewthisdocumentonRevenue’swebsite:

(www.revenue.ie).

n How regular must my contributions be?

IfyouarearrangingyourPRSAthroughanemployerscheme,your

paymentswillusuallybemadeonceamonth.Ifyouarepayinginto

yourPRSAdirectly,mostprovidersallowyoutopaymonthly,quarterly,

half-yearlyandyearlythoughsomeprovidersofPRSAsallowyou

topayweekly.Youcanalsomakeadditionaltop-upcontributions

toaPRSAatanytime.

n How flexible can my contributions be?

Youarefreetostop,startandincreaseyourcontributionsatany

time.Youarealsofreetodecreaseyourcontributionsatanytime,

aslongasyoumeettheminimumannualcontributionlevels,ifany,

setoutbyyourPRSAprovider.Youmustusuallygiveyourprovider

advancenoticeifyouarechangingyourcontributionlevels,restarting

orstoppingcontributions.Youcannotbechargedforchangingyour

contributionlevelsorstoppingandrestartingyourcontributions.

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Youcanmakeadditionaltop-upcontributionstoaPRSAatanytime.

Mostprovidershavean“indexation”optionthatallowsyoutoincrease

yourregularcontributionsinlinewithinflationeachyear.

n How can I pay my contributions?

Theacceptablepaymentmethodforcontributionsisatthediscretion

ofyourPRSAprovider.Mostproviderscurrentlyacceptregular

contributionsbydirectdebit,whilelump-sumpaymentsortransfers

areacceptedbycheque.Ifyouareanemployee,youremployermay

arrangetodeductyourmonthlycontributionsfromyoursalary.

n What happens if I don’t pay my contributions?

Youcanstopyourcontributionsatanytimewithoutbeingcharged

orpenalisedfordoingso,butrememberthiswillreducethepension

benefitsyoumayexpectatretirement.

Ifyoudonotpaycontributionsfortwoyearsormoreandthevalueof

yourPRSAfundis€650orless,yourprovidercanterminateyourPRSA

andgiveyouarefundofthevalueofyouraccount.Yourprovidermust

giveyouthreemonths’writtennoticebeforeterminatingyourPRSA.

n Are there any rewards or bonuses if I pay my contributions?

Someprovidersapplybonusunitsorlowerchargesifyour

contributionsareoveracertainlevel,youconsistentlymeetyour

monthlycontributions,oryouretireatthedateinitiallyspecified

whenyousignedyourcontract.IfyouinvestpartorallofyourPRSAin

certainfunds,youmayalsoreceivebonusesonandafterretirement.

n What happens if I change jobs?

Ifyournewjoballowsyoutobecomeamemberofanoccupational

pension scheme,youcantransferyourPRSAbenefitsintoyour

occupational pension scheme.Alternatively,ifyournewjobis

notpensionableoryoubecomeself-employed,youcannormally

continuetocontributetoyourPRSA.

n Can my employer contribute to my PRSA?

Yes,youremployercancontributetoyourPRSAbutisnotobliged

todoso.


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�. Investing my PRSA

n What happens to my contributions once they are put into my PRSA?

YourPRSAcontributionsareinvestedinarangeoffundsandthe

valueofyourPRSAcanincreaseordecrease,dependingonthe

performanceofthesefunds.

n In what types of asset will my PRSA invest?

MostPRSAswillinvestinpooled fundsthataremanagedbylife

assurancecompaniesorotherinvestmentmanagers.Apartfrom

temporary cash holdings,StandardPRSAscanonlyinvestinpooled

funds.Thereisusuallyagreaterchoiceoffundstoinvestinwith

non-StandardPRSAs.

n What is a Default Investment Strategy?

ADefault Investment Strategyisacollectionofinvestmentfunds

thatisexpectedtomeetyourretirementsavingsexpectations.The

Default Investment StrategyforeachindividualPRSAproductisbased

ongeneralgoodinvestmentpracticeinsavingforretirementand

approvedbytheprovider’sPRSA-appointedactuary.Althoughitis

notarisk-freeinvestment,itisdesignedtoreducethelevelofrisk

oftheinvestments.

n Who decides how I invest my PRSA?

AllPRSAsmusthaveaDefault Investment Strategy.Thisstrategyis

anautomaticinvestmentstrategytobeappliedunlessyouindicate

otherwiseinwritingwhenyouapplyforyourPRSA.Inaddition,your

providerwillgiveyouachoiceofinvestmentfundsoutsidetheDefault

Investment Strategywhichyoumaychoosetoinvestin.

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n Should anything influence the choice of investment funds for my PRSA?

You(andpossiblyyourinvestmentadvisor)shouldconsiderthe

numberofyearsyouhaveuntilretirementageandyourexpectation

forretirementincomewhendecidingyourinvestmentfunds.

Generally,asyouapproachretirement,investmentinhigher-risk

fundsshoulddecrease.

n Can I change or switch between investment funds after I sign the contract with my PRSA provider?

Yes,youcantransferbetweenfundsormovefuturecontributionsinto

adifferentfund.However,someprovidersrequirethatyouholda

minimumamountofmoneybeforeyoucantransferbetweenfunds.

Also,someproviderslimitthenumberoftimesayearthatyoucan

switchbetweenorchangefundswithoutcharge.

n How do I know how well my investment fund is performing?

Everysixmonths,yourprovidermustsendyouanInvestmentReport

(seePart 3)thatoutlinestheperformanceofthefundsinyourPRSA.

n Should my PRSA investment fund meet any criteria?

YourPRSAinvestmentfundmustmeettherequirementsofthe

EuropeanCommunitiesDirectiveonUndertakingsforCollective

InvestmentinTransferableSecurities(UCITS),1985,asamended.These

regulationsaredesignedtoprotectinvestorinterestsbyrequiringa

spreadofinvestmentswithinanyonefund.(ThisDirectivewasfurther

amendedinFebruary2002toregulatemanagementcompanies,

simplifiedprospectuses,andtheinvestmentofUCITS.)


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n What does the European Communities Directive on Undertakings for Collective Investment in Transferable Securities (UCITS), �� do?

TheDirectivelaysdowncommonstandardsforanumberofinvestment

areasintheEU,includinginvestmentrestrictions(forexample,how

muchyoucaninvestincertainstocks),borrowingpowers,reporting

arrangements,prospectuses,andmarketing.

n What level of risk is associated with my PRSA?

Generally,itislikelythatmostofyourPRSAfundwillinvestinhigher-

riskfundsintheearly-to-midyearsofyourperiodtoretirement,

movingtomiddle-riskfundsinlateryears,andlower-riskfunds

asyounearretirement.Thisshouldallowyoutotakeadvantage

ofthegrowthofaggressivehigher-riskfundsandhavethesecurity

oflower-riskfundsasyounearretirement.

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�. Getting my PRSA Benefits

n When can I take my PRSA benefits?

Youcannormallytakeyourbenefitswhenagedbetween60and75.

Incertaincircumstances,youcantakeyourbenefitsbeforethen,such

asifyouretirefromemploymentatage50orover,orifyoucanno

longerworkbecauseofaseriousillnessordisability.

However,itisnotusuallypossibletocashinyourPRSAbeforeyou

reach60yearsofage(orretirement).Likewise,youcannotuseyour

PRSAassecurityforaloanorassignittosomeoneelse.

n What documentation do I need to get my PRSA benefits?

YouwillneedyourPRSACertificateandContract,yourbirthcertificate

andPersonalPublicServiceNumber(PPSN).Youmayalsoneedto

provideevidenceofhealthifyouareretiringearlierthannormal

formedicalreasons.

n Do I have to take all my PRSA benefits at retirement?

No,youcantakegradualbenefitsfromyourPRSAandcontinuetomake

PRSAcontributions.However,youmusttakeyourPRSAbenefitsatage

75andstopanycontributionsbeforethatage.Thereisacondition

forthisoption.YoucangetmoreinformationfromtheRevenue

Commissioner’sA Guide to Personal Retirement Savings Accounts

(PRSAs)whichisavailableontheRevenue’swebsite(www.revenue.ie).

n What will my PRSA benefits consist of?

YourPRSAbenefitswillconsistofthetotalcontributionspaidby

yourselfandyouremployer,whereapplicable,theinvestmentearned

onthosecontributions,lesscharges(Youremployercancontributeto

yourPRSA,butisnotobligedtodoso).

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n Am I taxed on the investment return earned on my PRSA?

No,youarenottaxedforcapitalgainsontheinvestmentreturnyou

getonyourPRSA.

n What options do I have at retirement?

Youcanalsotakeatax-freecashlumpsumatretirementof25%

ofyourPRSAfund’svaluesubjecttoamaximum,and

n usethebalancetobuyanannuity,or

n leavethefundsinyourPRSAandwithdrawfromthem

atanytime,or

n transferthebalancetoanApprovedRetirementFund(ARF).

Thereareconditionsforeachoftheaboveoptions.Youcangetmore

informationfromtheRevenueCommissioners’A Guide to Personal

Retirement Savings Accounts (PRSAs)whichisavailableonRevenue’s

website(www.revenue.ie).

n What happens if I die before taking my PRSA benefits?

Ifyoudiebeforetakingyourbenefits,yourPRSAfundwillbe

transferredtoyourestate.Thefundwillbefreeofincometax,but

couldbesubjecttoinheritancetaxinthehandsoftherecipient.

n What happens if I die after I start to take my PRSA benefits?

Thisdependsonthepensionoptionyouchooseatretirement.

YoucangetmoreinformationonPRSAbenefitsfromtheRevenue

Commissioners’A Guide to Personal Retirement Savings Accounts (PRSAs).

YoucanviewthisdocumentontheRevenue’swebsite(www.revenue.ie).


��

n Can I transfer my PRSA benefits to another pension arrangement if I change jobs?

AsaPRSAisessentiallyyourpersonalpensionplan,youcannormally

bringitfromjobtojob,andfromemploymenttoself-employment

orviceversa.YoucantransferyourPRSAbenefitstoanoccupational

pension schemeoranotherPRSAwithoutcharge.

n Can I transfer occupational pension scheme benefits to a PRSA?

Youcanonlytransferyouroccupational pension schemebenefits

toaPRSAifyouhavebeenamemberoftheschemefor15years

orless,andtheschemeisbeingwounduporyouarechangingjob.

Youcannottransferyouroccupational pension schemebenefitsto

aPRSAifyouhavebeenamemberoftheschemeformorethan

15years.However,thevalueofAdditional Voluntary Contributions

toanoccupational pension schememaybetransferredtoaPRSA,

andtheaboverestrictionsdonotapply.

��


�. PRSA Charges

n What are the charges for Standard PRSAs?

ThechargesforStandardPRSAsarecappedandcannotbeincreased

abovetheupperlimitsthroughoutthelifetimeofyourPRSAcontract.

Themaximumchargesare:

n a5%chargeoneachcontributionyoupay,and

n a1%annualfundmanagementcharge,basedonyourfundvalue.

MostoftheprovidersofStandardPRSAslistedonpage7havea5%

contributionchargeand1%annualfundmanagementcharge.However,

thesechargesmaybereducedincertaincircumstances.ThePensions

Boardkeepsanup-to-datelistofthechargesonallPRSAproducts

(Standardandnon-Standard)onitswebsite(seewww.pensionsboard.ie).

n What are the charges for non-Standard PRSAs?

Chargesonnon-StandardPRSAsarenotcappedandvaryamong

providers.ThePensionsBoardkeepsanup-to-datelistofthecharges

onallPRSAproducts(Standardandnon-Standard)onitswebsite(see

www.pensionsboard.ie).

n Are there circumstances where charges can be reduced?

Someprovidersreduceyourcontributionchargeifyourcontributions

areoveracertainlevel,andthefundmanagementchargemayalso

bereducedifthevalueofyourfundexceedsacertainleveloryou

retireontheretirementdateinitiallyspecifiedinyourcontract.

n Can my PRSA provider change its charges?

Yes,yourPRSAprovidercanchangeitscharges.Theprovidermustgive

twomonthsnotificationofanyincreaseinchargesandalsoprovide

youwithanupdatedStatementofReasonableProjectionoutlining

thesechargeswithin7days.However,ifyouhaveaStandardPRSA,

chargesarecappedata5%contributionchargeand1%annualfund

managementcharge.

n What can I not be charged for?

Someoftheservicesyoucannotbechargedforinclude:

n settinguporclosingaPRSA,

n cancellingyourPRSAwithinthe“cooling-off”period(charge

mayapplyifyourproviderisalifecompanyandwheresingle

contributionswereused),

n transferringotherpensionbenefitstoyourPRSA(whereaCertificate

ofComparison[page9]isrequiredafeemaybecharged.),

n transferringyourPRSAtoanotherPRSAprovider,

n increasingyourcontributions,

n decreasingyourcontributions(however,thismaydependonthe

chargingstructureofyourPRSA),or

n starting,stoppingorrestartingcontributions.


��

�. Complaints

n What if I have a complaint about my PRSA?

Dependingonthetypeofcomplaintyouhave,thereareanumber

ofauthoritiesavailabletohelp.YoucancontactthePRSAprovider,

thePensionsBoard,theOfficeofThePensionsOmbudsman,the

FinancialServicesOmbudsman’sBureau,ortheFinancialRegulator.

n How do I know who to contact?

PRSA Provider:Ifyouhaveacomplaintaboutthemanagementof

yourPRSAyoushouldinitiallycontactthePRSAproviderandtryand

resolveitdirectlybetweenyou.

The Pensions Board:AstheRegulatorofallapprovedPRSAproducts,

ifyouareunsuccessfulorunabletoresolvetheissuewithyourPRSA

provideryoushouldcontactthePensionsBoardwhocanassistyou

furtherinresolvingthecomplaint.

The Pensions Ombudsman:ThePensionsOmbudsmanhaspowers

inrelationtoaPRSAtoinvestigateanddetermine:

n acomplaintmadebyoronbehalfofan“actualorpotential

beneficiary”ofaPRSAwhoallegesthatheorshehassustained

afinanciallossoccasionedbyanactofmaladministrationdone

byoronbehalfof“apersonresponsibleforthemanagement

ofaPRSA”,and

n anydisputeoffactorlawthatarisesinrelationtoanactdone

byoronbehalfofapersonresponsibleforthemanagement

ofaPRSA,andthatisreferredtothePensionsOmbudsman

byoronbehalfofanactualorpotentialbeneficiary.

��



��

Financial Services Ombudsman’s Bureau:Ifyouhavefollowedthe

internalcomplaintsprocedureofyourfinancialserviceproviderand

youarestillnotsatisfied,theFinancialServicesOmbudsmanmay

investigateacomplaintabout:theprovisionofafinancialservice,

anoffertoprovideafinancialservice,orthefailuretoprovidea

particularfinancialservicethathasbeenrequested.

The Financial Regulator:TheFinancialRegulatorisresponsiblefor

theregulationofallfinancialservicesfirmsinIreland.TheFinancial

Regulator’sroleistoprotectconsumersandtohelppeoplemake

efficientandeffectiveuseofcomplaintprocedures,andtoassist

andinformconsumerswherenecessary.Boardissuesofconsumer

protectionshouldbereferredtotheFinancialRegulator.

If you are unsure of where to go, any of the above organisations will

point you in the right direction.

��


�. Quick Tips on PRSAs

Bewaryofmis-selling.IfgettingaPRSAthroughabroker,

intermediaryorothersales-person,ensuretheyofferaStandardas

wellasanon-StandardPRSAorgiveyouclearreasonswhytheyare

proposinganon-StandardPRSA.(Thereisnocaponchargeswith

non-StandardPRSAs).Youshouldseekindependentfinancialadvice

ifgettingyourPRSAdirectly,ratherthanthroughanemployer.

Bewaryofsubstitutionselling.Ifyouareinlong-termemployment

andalreadyinanoccupational pension scheme,youmaynotneedto

takeoutaPRSAunlessyouremployeriswindinguptheschemeor

youarechangingemployment.(PRSAsareaimedprimarilyatpeople

whohavenotmadeanypensionprovision).Occupational pension

schemesmayoffermorebenefitsthanPRSAsasyouremployerusually

contributestoyourscheme.Youremployercancontributetoyour

PRSAbutisnotobligedtodoso.

IfyouarechoosingyourPRSAprovider,shoparoundforanyrewards

orbonusesthatyougetformakingcontributionsorretiringonthe

dateinitiallyspecifiedonyourcontract.

Ifoptingforanon-StandardPRSA,rememberthatchargesarenot

capped(unlikeStandardPRSAs).Youshouldaskyourproviderfora

listofthecostdifferencesbetweenthenon-StandardPRSAandthe

StandardPRSAproduct.Youshouldalsoensuretoreadandsignthe

FinancialRegulator’snon-StandardPRSADeclarationbeforebuyinga

non-StandardPRSA,andtokeepacopyofthisDeclaration(seePart 11).

Bewaryofpromisesofbetterreturnsonnon-StandardPRSAs.Past

performanceisneveraguaranteeoffuturereturnsanditisdifficult,

ifnotimpossible,topredicthowwellanindividualinvestmentfund

willperform.

Youarefreetostopyourcontributionsatanytimewithoutbeing

chargedorpenalisedfordoingso.However,ifyoudonotpay

contributionsfortwoyearsormoreandthevalueofyourPRSAfund

is€650orless,yourprovidercanterminateyourPRSAandgiveyou

arefundofthevalueofyouraccount.Yourprovidermustgiveyou

threemonths’writtennoticebeforeclosingyourPRSA.

Takenoteofthetypeofservicesyoucannotbechargedfor(seePart 7).

Ifyoufindyouarebeingincorrectlychargedforsomething,contact

yourproviderandiftheoutcomeisunsatisfactory,contactthePensions

Board,thePensionsOmbudsman,theFinancialServicesOmbudsman’s

Bureau,ortheFinancialRegulator,whicheverisappropriate(seePart 8).

FordetailedinformationontaxreliefandPRSAs,youshouldcontact

theRevenueCommissioners.

KeepallyourPRSAdocumentssafelyandletasolicitor,friendor

relativeknowwheretheyare.


�0

�0. Examples

Philomena McGovern, aged ��, is a freelance journalistwho

earns€35,000ayear.Becauseofthenatureofherjob,sheisnotin

pensionableemploymentandhasnotyetmadeanypensionprovision

forherself.PhilomenadecidestoapplyforaStandardPRSA.She

initiallypays15%ofhersalary(€5,250forthefirstyear)intoherPRSA

whichmeansshecanavailoffulltaxreliefforherage.AsPhilomena

willbepayingmonthly,hercontributionsworkoutatabout€437.50

amonthforthefirstyear.Shealsochoosestheindexationoption

sothathercontributionsautomaticallyincreaseby5%eachyear.

Bydoingso,shehopesthatinflationwillnotdecreasethevalue

ofherpensioncontributionsthatmuch.

Asafreelancejournalist,Philomenadoesnotalwayshaveasteady

income.However,withherPRSA,shecanstop,restart,andchange

hercontributionsatanytime.IfPhilomenadecidestoendfreelance

workandworkwithacompanyatanytime,shecantransferwhatever

PRSAbenefitsshehasintothatcompany’soccupational pension

scheme(ifavailable).Ifthecompanydoesnotprovideanoccupational

pension scheme,shecancontinuetocontributeasnormaltoherPRSA.

Stephen Smith, aged ��, is a self-employed IT consultantwhoearns

€110,000ayear.Stephendoesnothaveapensionyet.However,as

hehaspreviouslyinvestedalotofmoneyinthestockmarkets,he

wouldliketotakeoutapensionthatallowshimtoinvestinhigh-

riskfunds.(Stephenfeelsthereisgreaterpotentialforreturnonsuch

funds).Hethereforeoptsforanon-StandardPRSAasthisoffershim

agreaterchoiceoffundstoinvestin.HedoesnotchoosetheDefault

Investment Strategy.Instead,hegetsindependentfinancialadvice

andchoosesthefundshewouldliketoinvestinhimself.

��



��

Beforegettingthenon-StandardPRSA,Stephenaskshisproviderfor

alistofcostdifferencesbetweenitandtheStandardPRSAproduct.

HealsoensurestoreadandsigntheNon-StandardPRSADeclaration,

issuedbytheFinancialRegulator.

AlthoughStephencanonlygettaxreliefon20%ofhisearnings,he

contributes25%ofhisearningstohisPRSA(hehasnotpreviously

madeanypensionprovisionforhimselfandwantstomakeupfor

losttime).Heinvestshiscontributionsinanumberofhigh-riskfunds

butintendstochangetolow-riskfundsaboutfiveyearsbeforehis

retirement.Hehopesthatbydoingso,hisPRSAfundswillenjoythe

growththathigher-riskfundshavethepotentialtodeliver,butknows

thathisfundswillbesecureinlower-riskfundsashenearsretirement.

Aisling O’Toole, aged �0, is a casual chefwhoearnsabout€15,500

ayear.Shehasworkedwithanumberofcateringcompaniesona

part-timebasissincetheageof18,butsofar,nonehasofferedher

apensionarrangementbecauseofhercasualstatus.

AislingdecidestotakeoutaStandardPRSA.However,asshehas

neverinvestedinthestockmarkets,shehasnoinvestmentexpertise.

Therefore,shechoosestoinvestherPRSAintheDefault Investment

Strategy.Aislingpays€100amonthintoherPRSA,andchoosesthe

indexationoption.HerPRSAproviderestimatesthatafter35years,

thiscontributionlevelwillgiveAislingaretirementincomeofabout

€263amonth(intoday’sprices)fromtheageof65.As€263amonth

willbeworthalotlessin35yearsthanitisnow,Aislingintendsto

increasehercontributionssignificantlyfromtheageof35.

��


��. Useful Contacts

Inthisbooklet,wehavetriedtocoverasmuchinformationonPRSAs

aspossible.Ifyourequirefurtherin-depthinformation,belowisalist

ofusefulcontacts:

Ark Life Assurance Company Ltd.,

OneParkPlace,HatchStreet,Dublin2

Tel:(01)8987500

Email:[email protected]

Website:www.arklife.ie

Canada Life Assurance (Ireland) Ltd.,

MapleHouse,TempleRoad,Blackrock,CoDublin.

Tel:(01)2102001

Fax:(01)2102020


Website:www.canadalife.ie

Custom House Capital Ltd.,

9MerrionSquare,Dublin2.

Tel:(01)6325180

Fax:(01)6788460


Website:www.chcam.ieorwww.arf.ie

Eagle Star Life Assurance Company of Irl. Ltd.,

EagleStarHouse,FrascatiHouse,Blackrock,CoDublin.

Tel:(01)2831301

Fax:(01)2831578


Website:www.eaglestarlife.ie


��

EBS Building Society,

2BurlingtonRoad,Dublin4.

Tel:(01)6658027

Fax:(01)6659050


Website:www.ebs.ie

Friends First Life Assurance Company Ltd.,

FriendsFirstHouse,

CherrywoodBusinessPark,Loughlinstown,

Dublin18

Tel:(01)6610600

Fax:(01)6616651


Website:www.friendsfirst.ie

Hibernian Life and Pensions Ltd.,

OneParkPlace,HatchStreet,Dublin2

Tel:(01)8987000


Website:www.hibernian.ie

Irish Life Assurance plc.,

IrishLifeCentre,LowerAbbeyStreet,Dublin1.

Tel:(01)7041250

Fax:(01)7041900


Website:www.irishlife.ieorwww.myprsa.ie

��


New Ireland Assurance Company plc., (Bank of Ireland Life),

11-12DawsonStreet,Dublin2.

Tel:(01)6172000;(Tel:1850309309)

Fax:(01)6172800


Website:www.newireland.ie

The Standard Life Assurance Company,

90St.Stephen’sGreen,Dublin2.

Tel:(01)6397587

Fax:(01)6397909


Website:www.standardlife.ie

Other useful contacts

The Pensions Board,

VerschoyleHouse,28/30LowerMountStreet,Dublin2.

Tel:(01)6131900

Fax:(01)6318602

Website:www.pensionsboard.ie


Office of the Pensions Ombudsman,

36UpperMountStreet,Dublin2.

Tel:(01)6471650

Fax:(01)6769577

Website:www.pensionsombudsman.ie

E-mail:[email protected]


��

Financial Regulator,

POBox9138,CollegeGreen,Dublin2.

LoCall:1890777777

Website:www.financialregulator.ie


Financial Services (Pensions) Business

Office of the Revenue Commissioners,

GrattanHouse,4thFloor,LowerMountStreet,Dublin2.

Tel:(01)6474022

Website:www.revenue.ie


Forinformationontaxationrelatingtopensions.

Consumers’ Association of Ireland,

44ChelmsfordRoad,Ranelagh,Dublin6.

Tel:(01)4978600

Website:www.thecai.ie


Department of Social and Family Affairs,

PensionServicesOffice,CollegeRoad,Sligo.

LoCall:1890500000

Tel:(071)9169800

Website:www.welfare.ie

ForinformationonentitlementstoStatepensionbenefits.

��


��. Glossary of Terms

Additional Voluntary Contributions (AVCs):voluntarypension

contributionsmadebyamemberofapensionschemeoverand

abovetheamountofcontributions(ifany)thatarerequiredunder

therulesofthescheme.

Annuity:guaranteedincomeforlifenormallypurchasedatretirement

inreturnforalumpsumpayment(totalcontributionsandinvestment

income).

Defined Benefit Scheme:wheretheamountofapensionbenefit

isspecifiedbyformulaeintherulesofthepensionscheme(usually,

yearsofserviceandpercentageofsalary).

Defined Contribution Scheme:wheretheamountofapensionbenefit

dependsontheaccumulatedvalueofcontributionspaidtoapension

schemeandtheinvestmentreturnsearnedonthosecontributions.

Default Investment Strategy:anautomaticinvestmentstrategythat

islinkedtogeneralgoodpracticeforinvestmentforretirementandis

certifiedbyaPRSAactuary.TheDefault Investment Strategyprovides

forinvestmentinpooled funds.

Net Relevant Earnings:broadlydefinedasearningsfromatradeor

professionalemployment,lesscertainallowableexpenses.

Occupational Pension Scheme:apensionschemesetupbyan

employertoprovideretirementand/orotherbenefitsforemployees.

Thistermisusedinterchangeablywith“companypensionscheme”.


��

PRSI:ashortenednameforPayRelatedSocialInsurance,underwhich

individualswhoearnanincomepayrelatedcontributionstothe

SocialInsuranceFundandinreturnarecoveredforcertainscheme

insurancebenefits,e.g.StatePension(Contributory).

Pooled Funds:acollectiveinvestmentschemewhereinvestors’moneyis

pooledtobuyaportfolioofassetsincludingGovernmentbonds,deposits,

property,andstocks.Thefund’sassetallocationistheproportionof

thefundinvestedineachdifferentassetcategoryoraninternallinked

fund,thebenefitofwhichismadeavailablebymeansofacontractof

insuranceofaninsurancecompanyauthorisedtooperateintheState.

Temporary cash holdings:short-termdepositswhichprovideasecure

income.

��


Appendix � PRELIMINARY DISCLOSURE CERTIFICATE FOR A STANDARD PRSA

�. The certificate shall contain the following information:

(a) Benefits

Underthisheading,includeabriefdescriptionofthebenefits

providedbytheStandardPRSAandthemannerinwhichthose

benefitsmaybetakenbythecontributor.

(b) Investment Strategy

Underthisheading,describetheDefault Investment Strategyand

anyotherinvestmentstrategyapplicabletotheStandardPRSA.

(c) Tax

Underthisheadingincludeinformationinrelationtothetax

issuesrelevanttotheStandardPRSAincludingtaxreliefavailable

oncontributionsandtheextentofsuchtaxreliefs,thetax

treatmentofincomeandgainsearnedunderthePRSAcontract

andthetaxtreatmentofbenefitstakenfromthePRSA.

(d) Risk Factors

Underthisheading,giveabriefdescriptionofthefactorswhich

mayhaveanadverseeffectonperformanceorareotherwise

materialtothedecisiontoinvest,includinginvestmentrisks,the

restrictionontakingbenefitsearlyandtheconsequencesofnot

payingcontributions.

�. The Projected Level of Benefits

Subjecttoparagraph3,thecertificateshallcontainthefollowing

informationandtabledulycompletedinthefollowingform:

ThebenefitsthatwillemergefromyourStandardPRSAwilldepend,in

particular,onthelevelofyourcontributions,howlongyoupaythose

contributionsandtheinvestmentreturnachieved.

Thetablebelowillustratestheretirementincomeforlifepayable

monthlyfromage65projectedtobeobtainedfromcontributionsof

differentamountsstartingfromdifferentages.Thisretirementincome

hasbeenadjustedforinflationsothattheamountsareshownin

termsofcurrentprices.

TABLEOFBENEFIT

Amount of

contribution

paid per month

Retirement income payable for life from age 65

of contributions start from age:

20 30 40 50 60

€�0 €permonth €permonth €permonth €permonth €permonth




This table shows that if contributions of €100 per month are made for

35 years from age 30 to 65, then the retirement income payable for life

from age 65 is projected to be € per month.


�0

IMPORTANT

THESE ILLUSTRATIONS ASSUME AN INVESTMENT RETURN BEFORE

RETIREMENT OF (RATE)% PER ANNUM AND INFLATION OF (RATE)%

PER ANNUM. THESE RATES ARE FOR ILLUSTRATION PURPOSES ONLY

AND ARE NOT GUARANTEED.

ACTUAL INVESTMENT GROWTH WILL DEPEND ON THE PERFORMANCE

OF THE UNDERLYING INVESTMENTS AND MAY BE MORE OR LESS

THAN ILLUSTRATED.”

�. [Theinformationinparagraph2isspecifiedforaStandardPRSA

andmaydifferforanon-StandardPRSA.]

�. Warnings

Thecertificateshallcontainthefollowingwarningnotices:

“WARNINGS

It is important to make adequate provision for your retirement.

At the date of this Certificate the State (Contributory) Pension

payable under the Social Welfare (Consolidation) Act �00� to a single

person who is qualified to receive the maximum rate amounts to

€___________ and equates to [___%] [ ] percentage of the latest

yearly figure for gross average earnings as published by the Central

Statistics Office for all industrial workers in all industries.

The value of your assets, and accordingly, the level of your benefits

will depend upon the value of the underlying investments of the

Standard PRSA and the income which they earn. These values are

not guaranteed, and may fall from time to time, as well as rise.

This Standard PRSA is intended to provide benefits over the

duration of your life from retirement and it should be viewed

as a long term investment.”

��


�. Information on Charges

(a) Inthissectionofthecertificate,thePRSAprovidershalldescribe

indetailthechargesleviedundertheStandardPRSAcontractand

includeinformationonhowthosechargeswilloperateandhow

theymaychangeovertime.

(b) Thecertificate,inthissection,shallalsostateasfollows:

“ThemaximumpermittedlevelofchargesonaStandardPRSA

suchasthisislimitedbylawto5%ofeachcontributionand1%

perannumoftheassetsintheAccount.”

�. Cooling-Off Period

Underthisheading,thecertificateshallcontain,inaprominent

position,thefollowingwords:

“Thiscontractisnotenforceableuntilaperiodof30dayshaselapsed

fromthedateonwhichyouaregivenaStatementofReasonable

Projectionandyoumaycancelthiscontractatanytimeduring

thatperiod.”


��

�. Certificate

ThePreliminaryDisclosureCertificateshallcontainthefollowing

wordsattheendofthecertificate:

“ThisPreliminaryDisclosureCertificatehasbeenpreparedunder

theprovisionsofsection111ofthePensionsAct,1990fordisclosure

inconnectionwiththisStandardPRSAonthe[date]:

Signed:______________________________________________

(Name of Director)

_____________________________________________________

(Name of Provider and address of registered office)

Date:_______________________________________________ "

��


Appendix � STATEMENT OF REASONABLE PROJECTION FOR A PRSA

�. A Statement of Reasonable Projection shall contain the following information in the following form:

“(a)(i) NameofContributor:_____________________________

(ii) DateofBirth:___________________________________

(iii)Sex:___________________________________________

(b) NameofPRSA:_____________________________________

(c) NameofPRSAProvider:______________________________

(d) DateofsignatureofPRSAcontract: _____________________

(e) Projectedretirementdateofcontributor: ________________

(f) ValueofyourPRSAassetsasatdateofstatement: _________

(g) Thelevelofbenefitstobereasonablyexpected:

(i) ThevalueofyourPRSAassetsasshownaboveifnofurther

contributionsaremadecouldbeexpectedundercurrent

circumstancestoproduceanincomeforlifecommencing

atage[65]of[]permonthintermsofcurrentprices.

(ii) ThevalueofyourPRSAassetsasshownabove,togetherwith

futurecontributionswhichitisassumedyouwillpaywill

producethefollowingbenefit:


��

Year €

Total amountof contributions

paid in the future into the PRSA contract

up to the relevant date

€

Projected investment

growth to date

€

Projected PRSA contract value if no account

is taken of applicable

charges to date

€

Projected PRSA contract value if account is taken

of applicable charges to date

1

2

3

4

5

10

15

20

Maturity

Note:The projections shown above make no allowance for the effect

of inflation which will reduce the value of the projected benefits. The

projected maturity value of [€___] shown in the table is worth [€___]

in terms of CURRENT PRICES. This maturity value could purchase a

retirement income for the rest of your life starting from that date of

[€___] per month in terms of current prices.

IMPORTANT

THESE ILLUSTRATIONS ASSUME AN INVESTMENT RETURN BEFORE

RETIREMENT OF (RATE)% PER ANNUM AND INFLATION OF (RATE)%

PER ANNUM. THESE RATES ARE FOR ILLUSTRATION PURPOSES ONLY

AND ARE NOT GUARANTEED.

ACTUAL INVESTMENT GROWTH WILL DEPEND ON THE PERFORMANCE

OF THE UNDERLYING INVESTMENTS AND MAY BE MORE OR LESS

THAN ILLUSTRATED.”

��



��

�. Thetablesetoutatparagraph1(g)shallbeinannualstepsforthefirst

fiveyearsandeveryfiveyearssubsequently.Theyearofmaturityshall

beshowninaseparateline.

�. Information on Charges

Inthestatement,thePRSAprovidershalldescribeindetailthe

chargesleviedunderthePRSAcontractandincludeinformationon

howthosechargeswilloperateandhowtheymaychangeovertime.

�. Warnings

(a) Thestatementshallcontainthefollowingwarningnotices:

“WARNINGS

The value of your assets and accordingly, the level of your

benefits will depend upon the value of the underlying

investments of the PRSA and the income which they earn.

These values are not guaranteed, and may fall from time

to time, as well as rise.

It is important to make adequate provision for retirement.

This PRSA is intended to provide benefits over the duration

of your life from retirement and it should be viewed as a

long term investment.”

(b) ThestatementforaPRSAotherthanaStandardPRSAshallcontain

thefollowingadditionalwarningnotice:-

“It is recommended that you seek professional financial advice

about the nature of this PRSA contract.”

��


�. Social Welfare Pension

Thestatementshallcontainthefollowingparagraphcompleted

appropriately:

“At the date of this Statement the State (Contributory) Pension

payable under the Social Welfare (Consolidation) Act �00� to

a single person who is qualified to receive the maximum rate

amounts to €_________ and equates to [___%] [ ] percentage of the

latest yearly figure for gross average earnings as published by the

Central Statistics Office for all industrial workers in all industries.”

�. Certificate

TheStatementofReasonableProjectionshallcontainthefollowing

wordsattheendofthestatement:

“ThisStatementofReasonableProjectionhasbeenpreparedunder

theprovisionsofsections112and116ofthePensionsAct,1990on

the[date]:

Signed:______________________________________________

(Name of Director)

_____________________________________________________

(Name of Provider and address of registered office)

Date:_______________________________________________ ”


��


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