I have outlined some typical questions that people often ask before they take out a PRSA below:

When did PRSA's get introduced to IRELAND?

Personal Retirement Savings Accounts (PRSA's) were first introduced in Ireland through the Pensions Act 2002.

What is the benefit of a PRSA?

Personal Retirement Savings Account is a long-term personal retirement account designed to enable you to save for retirement in a flexible and transparent manner. If your company has no pension then the PRSA is most likely the product for you.

Who owns the PRSA?

You own the PRSA in the same way you own a bank account. The PRSA contract is between you and a PRSA provider in the form of an investment account. PRSA's offer loads of flexibility and this form of pension allows you to change employment and continue to use the same PRSA. You can also switch from one PRSA to another at any time, free of charge.

Is there tax relief?

There is full tax relief in the same way as there is generous relief for all pensions in IRELAND. Tax relief is based on your age and will be given by the government for the contributions you pay into your PRSA.

Should my employer have a PRSA option?

Yes all employers should offer the PRSA option to staff. If you are an employer and do not have a pension option for staff please give us a call on 01-4546730 or email us on info@paulryan.ie

We can set you up and register your company with a relevant investment company who will offer PRSA'S to your employees. There is no requirement for you to make contributions to the PRSA on behalf of your employees (unlike Occupational Pension Arrangements). All you need to do is offer the PRSA option.

If you are an employer remember that you are required to have provided access to a PRSA to employees who are not entitled to join a pension scheme within 6 months of existing service.

What are the charges associated with PRSA's?

Basically there are two types of PRSAS

• Standard PRSA and
• Non-Standard PRSA

The maximum charges under a Standard PRSA cannot exceed 5% of contributions paid and 1% per annum of the PRSA assets. There are however some restrictions on the kind of assets a standard PRSA can invest in. Usually the asset selection is more limited that in a Non-Standard PRSA. Standard PRSAs invest only in pooled funds where the risk is spread across a large number and variety of investments. With a Non-Standard PRSA you tend to have a larger selection of assets to select from and also the charges are not always fixed so you will need to ensure you are aware of the charges before you select the PRSA product for you. As Pension advisor's we will help you make the correct informed decision to meet your needs and objectives. As always we are fully transparent on our fees and costs.

Why do I need a PRSA?

When considering a PRSA please read the following pointers which might help you make an informed decision:

Is there an existing pension scheme available to me in my job?

If not, then the PRSA is probably the best vehicle to use to allow you build up a pension pot for when you retire. If you already have a good pension arrangement, you may also consider a PRSA as a vehicle to allow you to "top up" your benefits through making Additional Voluntary Contributions (AVCs). If you are in a company pension and you don't think its enough the consider a PRSA as an AVC facility.

Should I start a PRSA if I already have a personal pension plan?

You should seek professional advice based on your circumstances in this situation as everybody is different. Thats why it is so important to get financial advice from Paul Ryan PFC on 01-4546730 to allow you make the correct decision.

Do I need a PRSA if I have a defined benefit scheme?

Defined benefit pension schemes promise a pension which is related to your salary (e.g. two-thirds of final salary on retirement) at retirement. Usually these are the pensions you have if you are a Civil Servant. You can transfer from a Defined Benefit Pension to a PRSA but it involves risk and is not recommended (generally) by ourselves.

What are the tax reliefs for PRSAs?

If you pay a contribution into a PRSA, you will benefit from tax relief at your marginal income tax rate. You will also obtain relief from your PRSI contributions. The maximum annual tax deductible is based on a percentage of your earnings and this percentage rises with age. Generally as you get older you get more relief.

The tax relief chart is as follows:

For example: If somebody is aged 41 years then they can gain tax relief on the lower of 25% of their earnings or on the contributions paid in that year.

How are the contributions treated if I am making a payment as an Employer?

If an employer makes a contribution to a PRSA on behalf of an employee, then these contributions are treated as a benefit of kind.

For example: If an employee aged 29 contributes 5% of their earnings to a PRSA and the employer contributes a further 10%, the employee as treated as making a total contribution of 15%.