How much a month will I get after retirement? For example on a saving of €300 per month.

Hi James,

Without knowing how many years you have before retirement it’s not possible to give you a sample quote but if you’d like to send us some details we’ll come back to you straight away.

Thanks
Killian

If you head back to Holland were does my Pension go?

Hi Jimmy

Thanks for your email.

RaboDirect have linked up with Zurich Life (formerly Eagle Star) to provide the PRSA. In the unlikely event of RaboDirect leaving Ireland (which we have no plans to do by the way!) your contract would remain with Zurich who would manage your pension for you.

I hope this helps.

Best regards
Killian

What fees are you charging on The Rabo PRSAs and whats the difference between these charges and buying direct from Zurich?

Hi Philip The standard charges for a PRSA were set in stone when the government put forward the legislation for PRSA’s. The maximum fees allowable are 5% for set up and 1% annual management charge. Zurich Life are offering the following terms: Annualised Contribution Less than €6,000 - 98% Allocation €6,000 but less than €12,000 - 98.75% Allocation At least €12,000 -99.5% Allocation As far as I’m aware Zurich life do not deal directly with the public therefore all business has to come from their broker channel / sales force So the fees and charges can vary depending which individual you would deal with. If you have any further questions please let me know. Rgds, Killian

Can you honestly and openly explain all the charges/fees/profit that Rabo Bank/Zurich make off my money if I were to sign up with yourselves for a pension?

Hi Patrick,

At RaboDirect we believe we are very upfront with highlighting the fees on all the products we offer and it’s no different for PRSA’s.

You can get more detail by clicking on the link below, this will take you to the page covering fees for PRSAs but if you have any further questions
we’d be delighted to hear from you.

http://www.rabodirect.ie/prsa/prsa-fees/default.aspx

Kind regards
Killian

I'm delighted that RaboDirect has added this product. It is a great idea to plan for the future.
However, I am a little dissappointed that Rabo didn't take on this themselves and offer a very simple and transparent pension savings account.
The fees that are being charged here are no doubt some of the cheapest available on the Irish market, but the concept of paying 2% to give money to a financial institution and being charge 1% per annum to look after these funds, which cannot be drawndown until retirement does not make sense.
This means that in the first year the fund will have to exceed 3% inorder for you to breakeven. Pretty difficult in the current economic environment.
Why can Rabo not offer a PRSA that is cash based with no entry charges and a simple transparent interest rate?
For example: Rabo's 5 yr Term Deposit is offering a rate of 3.4%. I think many people would find a product such as this very acceptable. Therefore after 5 years you have a 17% return with no charges.

Hi Declan,

Thank you for your comments.

We did initially look at setting up our own PRSA but to be honest the set up costs are high and as this is not our core business it would be difficult to match the fees and expertise provided by Zurich Life.

As you said our fees are very competitive but I do not agree with your comment that it does not make sense. For example if you make a pension contribution of €1,000 you are entitled to a tax rebate of either 41% or 20% depending on your income tax rate plus your PRSI contribution. So if you are on the higher rate of tax there is a rebate of nearly 50% of you premium or if you look at it from the other angle a premium of €1,000 could get you an investment of circa €1900.

I also agree that it would be nice to have a deposit account option but Zurich do offer an active fixed income fund, a long bond fund and a secure fund. As you are probably aware Pensions by their nature are long term investments and many people are happy to invest in Equity funds which over time have outperformed cash, bonds and property. I realise the markets have been very volatile recently but the average pension managed fund has returned in excess of 10% year to date.

So all in all I really believe that pensions are the best way to save for your future.

Kind regards,

Killian

I currently have an online self-service PRSA with Quinn-Life where I pay a fee of between 1% and 1.5% p/a depending on the fund. If I switched to Zurich/ Rabodirect and paid your higher fees of 2% to 5%, would I, based on historical performance of an average PRSA plan, be better off? I realise a lot depends on the fund itself and the mix in my pension plan, but can you justify charging this level of fee? What do I get in return for paying you a higher fee? I'm open to switching if you can show that you have historically managed a better return!

"Introductory" 2%? Isn't that's the sneakiness Rabo always promises not to do? Easy to expect the 3% 4% and 5% back pretty quickly, and then too late to move your money out. In the current climate, taking into account that managing this is no different from managing any sort of mutual fund, 2% sounds like a robbery and huge drag on performance (while 5% to expect later is simply outrageous), totally agree with Declan and GG here.
Doesn't myadviser.ie charge only running fees of 1%? Don't think the extra level of administration over the actual investment fund justifies a fee bigger than the fund's running fee.
Also wonder if there is an "exit fee" later on...

Hi Alex,

The PRSAs now available through RaboDirect are very different from the investment funds we offer our customers.
When you invest in a PRSA there are much greater obligations on the provider to regularly provide updated reports on your contribution and fund performance among many other legal requirements.

If you look at the pension market in general the most competitive product is the Standard PRSA where the fees are capped at a maximum of 5% upfront and 1% annual management charge. If you compare this to a regular personal pension the upfront commission can be as high as 50%.

With this in mind, I believe the current 2% charge for the Zurich Life PRSA we’re offering on our site is among the most competitive in the market.

Regards
Killian

Hi Killian,
I take your point about the tax saving
But you didn't read my point correctly, you answered it like a politician, completely avoiding my point.
I never said that having a pension doesn't make sense, I said

"the concept of paying 2% to give money to a financial institution and being charge 1% per annum to look after these funds, which cannot be drawndown until retirement does not make sense."

I am refering to pension charges in general. If I'm giving money to a financial institution to manage for 30+ years with a limited ability to withdraw these funds, paying contribution charges and management charges seem a bit ridiculous don't you think?

I think Rabo is taking the wrong road by acting as an intermediary. Rabo inital ground breaking business is slowly evolving into a dull run of the mill online brokerage.

As Alex pointed out myadviser.ie is offering a very similar option.
So no real news and no real offer.

In the current financial services market, the consumer now more than ever needs a company like RaboDirect to keep the incumbent financial institutions on their toes.
We need more ground breaking/competitive produces not just repackaged products already sold by the existing oligopoly.

Hi Declan,

Thanks for coming back. I understand your point regarding management fees and not having access to your funds until retirement but whether we designed our own PRSA or use an existing product, the reality is we’d still be bound by the same format and pension rules outlined by the revenue commissioners.

We do however see an opportunity to communicate with customers in a very different way compared to other providers.
We pride ourselves on making products easier to access and understand and think pensions could do with some straight talking explanation.

You could call everything banks sell ‘repackaged products’ because we deal in a lot of the same markets, but for the consumer having choice and a good understanding of the product they’re buying is extremely important - and that’s where we think we can make a difference.

As I mentioned to Alex in a previous blog post there is a considerable amount of ongoing reporting required with pension products and the fees applied are very tight considering the amount of work that’s required on an annual basis. Also if RaboDirect was to design its own PRSA product from scratch the fees we are charging now would be insufficient to cover our set up costs and ongoing administration costs.

PRSAs are very flexible and cost efficient savings vehicles Declan, but I agree investors should be allowed some access to their money in the event of a rainy day.

I hope this answers your question as I would hate to be referred to as a politician again.

Kind regards
Killian

Hi - can you please answer this question. You outline charges for regular monthly contributions and lump sum payments but I dont see any information about the annual management charge. Can you outline what this is?

Hi David,

The annual management fee applicable to our PRSA is 1%.

Regards,

Killian

what is your term depost offering over ulster banks bonus saver account I am toying between both options and would like to consolidate funds in rabo but still want best value tell me something to make me go with your term deposit account?

Hi,
I'm a 44 year old civil servant. I started an AVC Plan with CornMarket at the start of this year which is noe worth €6,000. I also have managed funds with Rabodirect woth about €45,000 which I use as a vehicle for saving for my retirement. My question is can I switch my AVC Plan to Zurich and if I contribute €600 per month will I only pay 1.25% on the contribution and 1% management fees.

Also, if I switch the €45,000 once-off from the investment funds to the PRSA with tax relief how much will this be worth in the PRSA

Finally, can I manage - buy and sell - and monitor the PRSA on the Rabodirect site as I currenyly do with the existing investment funds.

Many Thanks

DEclan
Can you advise if you have been able to get over the Zuirich limit of 7.5% annual withdrawal from their PRSA post retirement. Their funds perform well, but this restriction may cause me to look elsewhere.

Al

Hello I am a Rabo Savings Acc user and have enjoyed saving with you. I am a part timer employee working 2 days a week and the rest of the week struggling to make a living as a self employed woman of 38 years of age. At the moment I earn K28 a year but this could change unexpectedly over the years what with the current economy climate. My question is would it be better for me to move my savings into PRSA and add something like €100 a month to the account. I dont want to depend on the state pension as I know I will get a lot less as I contribute to the PRSI (is that what it is called?) two days a week wages. Or would it be better for me to keep the savings acc as is and contribute monthly? Thanks for reading

This is a tough one. Your income is pretty low, so not only do you probably not have much spare money to put into a pension, but you probably don't pay much income tax. You need to be paying income tax to get the tax relief on your contributions, and on your level of income this relief, at the moment only amounts to 20% plus 6% PRSI. However, there is talk about raising the tax relief to say, 35%, and if this happens making the monthly PRSI contribution would be much more valuable to you.

Finally, I think you are quite right not to count just on the state to provide you with a retirement income. State and public sector pension promises are already far higher than we, as a country, can afford. You should not only be aiming to increase your income, but keep your debt as low as possible and save and invest as much as you can with a view for the long term. Start educating yourself about investment opportunities, but make sure you understand how much risk you are prepared to live with and match your pension investment funds or shares to that risk level.

I am in the same boat as rapo, self employed etc, I have no pension plan and any I have considdered in the past turned out to be at best too costly complicated and as I see now not exactly viable. I save regularly as a means to an end but I am not convinced any about any pension plan method in Ireland, I am unsure what circumstances lie ahead when I retire, but I do know if there was a simple guaranteed way to save a pension I would do it but Im afraid the rabo/zurich way is just another one of the many. Why don't Rabo go it alone with simple plans just like their savings plans

Thanks for all your comments and questions folks. We hope you found the answers provided useful. If any other questions spring to mind you could check out our PRSA FAQs, listen to our podcast or give our Dublin-based call centre a buzz on 1850 88 22 22. We’re open Monday to Friday from 8am to 7pm