A PRSA (Personal Retirement Savings Account) provides everyone with the opportunity to plan wisely for their retirement and it is designed to suit all types of people - those who do not have access to a pension scheme through work, those who work in the home, and those who work part time and those who are unemployed.

A PRSA is a simple and cost-effective way to plan for your retirement. In a nutshell, it is pensions made easy! So do not put it to the back of your mind, take this opportunity to be in control of your future and contact Kielty Cashell Financial today. There are a number of types and you should choose the one that applies to your type of employment.

• Employer PRSA
• Employee PRSA
• Individual PRSA
• FAQ’s

Employer PRSA

As you are probably aware, all employers are now obliged to provide their employees' with access to some form of pension provision.

An Employer Personal Retirement Savings Account) PRSA is a facility set up by employers to help their employees save for their retirement. It is a tax-efficient way for your employees to build up a fund for a comfortable retirement, in a flexible manner.

Warning: The value of your investment may go down as well as up.

Employee PRSA

An Employee Personal Retirement Savings Account (PRSA) is an account set up by you to save for your retirement and is facilitated by your employer. It is a tax-efficient savings account that has been designed to help you build up a fund for your retirement in a convenient and flexible manner.

On retirement, the fund can be used in a number of different ways to meet your financial needs at that stage in your life.

Warning: The value of your investment may go down as well as up.

Individual PRSA

As the name suggests, a Personal Retirement Savings Account is an account set up by you to save for your retirement. It is a tax-efficient savings account that has been designed to help individuals build up a fund for their retirement in a convenient and flexible manner.

On retirement, the fund can be used in a number of different ways to meet your financial needs at that stage in your life.  Contact us for more information.

Warning: The value of your investment may go down as well as up.

PRSA FAQ’s

What is a PRSA?

A personal pension plan that you take out with an authorised PRSA provider, like an investment account used to save for your retirement.

It is a type of defined contribution scheme where you make regular contributions to your pension, which are tax deductible, depending on your age.

A PRSA is a flexible pension that allows you to increase, decrease or stop your contributions at any time without any charge or penalty for doing so.

It is a portable pension that can be carried from job to job or transferred to another PRSA provider, without any charge or penalty for doing so.

A PRSA is a personal pension plan that gives you flexibility in drawing down benefits at retirement age including the facility to continue contributions while drawing benefits.

It is a personal pension plan providing you with regular information to allow you monitor its performance and suitability to your needs.

Who can take out a PRSA?

PRSAs are available to you regardless of your job or employment status. Therefore, you can get a PRSA if you are a part-time or casual employee, a highly-paid professional, self-employed, a homemaker, a carer, a contractor, an employer, an employee, a partner in a partnership, or a jobseeker.

You can continue to contribute to a PRSA after your retirement, as long as you are not aged 75 and over.

What types of PRSAs are available?

There are two types of PRSA: a Standard PRSA and a non-Standard PRSA. The main differences between both types are the charges and investment options.

If you have a Standard PRSA, you cannot be charged more than 5% on the contributions you pay and 1% a year on the managed funds (Your PRSA provider can charge as little or as much as it likes, up to these maximum levels).  You can only invest in pooled funds, except for temporary cash holdings.  You do not have to buy another product, such as life assurance, when you are applying for your Standard PRSA. (A Standard PRSA may not be marketed or sold if the purchase of the product is conditional on some other product being purchased).

If you have a non-Standard PRSA, there is no limit on charges and you can invest in a range of funds including (but not restricted to) pooled funds.

Who contributes to my PRSA?

You contribute to your PRSA. If you are an employee, your employer may contribute but is not obliged to do so.

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

No, your PRSA is not risk-free or backed by any Government guarantee.  Like other personal pensions and defined contribution schemes, your PRSA is an investment account that provides for your retirement.  This means that the value of your PRSA can increase or decrease, depending on the performance of your PRSA’s investment funds.  Likewise, if your employer provides you with access to a Standard PRSA, your employer is not responsible for the investment performance of your Standard PRSA. However, this may not be the case where the employer provides access to a non-Standard PRSA.

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

Yes, but the contributions to both are added together when calculating your maximum tax relief (which is dependent on your age).

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

Yes. A member of an employer sponsored OPS may also take out a tax relieved PRSA for additional voluntary contributions.

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

After you sign a contract with a provider, you have a “cooling-off” period of 30 days, from the date you are given the Statement of

Reasonable Protection, during which you can cancel your PRSA. If you cancel within the “cooling-off” period, you normally get a full refund of all contributions and transfers paid to your PRSA (There may be a charge where your PRSA provider is a life company and where single contributions were used and a loss incurred as a result of market volatility during the “cooling-off” period).

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

You can contribute as much as you want to your PRSA, as long as you meet the minimum contribution levels as set out in the literature of each provider. However, the amount of tax relief you can get on contributions depends on your age.

How much tax relief do I get on my contributions?

The amount of tax relief you can get on contributions depends on your age as follows:

Age Limit

Under 30     15%

30 – 39     20%

40 – 49     25%

50 – 54     30%

55 – 59     35%

60 or over     40%

If you are a sportsperson or professional who usually retires earlier than the norm (such as an athlete or jockey), you can get tax relief on 30% of your net relevant earnings, regardless of your age. Relief is given at your marginal (higher) tax rate. There is a maximum amount of earnings of €262,382 for 2007 (indexed in line with an earnings adjustment factor which is decided by the Minister of Finance each year) in a year for which tax relief will be given. If you make contributions but do not get tax relief on them because you exceeded your tax relief limits or are not working, you can apply for tax relief on these contributions in the future. Certain people can also get Pay Related Social Insurance (PRSI) relief on PRSA contributions.

Need to adjust relative to changes in the recent budget: maximum level of income that one can claim tax relief on pension contributions.  Add new paragraph.

How flexible can my contributions be?

You are free to stop, start and increase your contributions at any time. You are also free to decrease your contributions at any time, as long as you meet the minimum annual contribution levels, if any, set out by your PRSA provider. You must usually give your provider advance notice if you are changing your contribution levels, restarting or stopping contributions. You cannot be charged for changing your contribution levels or stopping and restarting your contributions.

What is a Default Investment Strategy?

A Default Investment Strategy is a collection of investment funds that is expected to meet your retirement savings expectations. The Default Investment Strategy for each individual PRSA product is based on general good investment practice in saving for retirement and approved by the provider’s PRSA-appointed actuary. Although it is not a risk-free investment, it is designed to reduce the level of risk of the investments.