Personal Retirement Savings Account (PRSA)
A Personal Retirement Savings Account (PRSA) is a long term pension savings product available to all individuals under the age of 75. It is designed, primarily, as a pre-retirement vehicle enabling individuals to save for retirement in a flexible manner. Tax relief is available on an individual’s personal contributions subject to age and income based limits. Employers must provide a payroll facility for deductions to a PRSA under the net pay system; employers can also contribute to a PRSA though they are not obliged to do so.
There are two types of PRSA; standard and non-standard. The difference between the two is the maximum charging structure and the type of assets in which you can invest.
Benefits can usually be taken from age 60.
Who can invest in a NRFM Self-Invested PRSA?
PRSAs are available to all individuals under 75, regardless of level of income or employment status.
The NRFM Self-Invested PRSA may specifically appeal to:-
- Individuals who do not qualify for membership of an employer sponsored Defined Contribution (DC) scheme
- Members of company sponsored scheme that do not offer an Additional Voluntary Contribution (AVC) facility
- Company directors and individuals with self-employed income
- Existing holders of either self-invested PRSA’s or PRSA’s with insurance companies.
- Those wishing to transfer benefits to Ireland from overseas arrangements (under QROPS rules)
- Holders of vested PRSA’s
- Deferred scheme members who have less than 15 years’ service.
What is a ‘vested’ PRSA?
A vested PRSA is the term used to refer to a PRSA contract from which the holder has retired. The client has taken their tax efficient cash portion of their retirement savings and has left the balance of their funds in their PRSA. The remaining balance remains in the policy. If the holder does not have pension income of €12,700 p.a, the first €63,500 must be ‘ring-fenced’ for this purpose.
A vested PRSA is subject to the same rules as an ARF with regard to imputed distributions.
Investment growth generated by a vested PRSA is exempt from income tax and capital gains tax in certain jurisdictions.
Investment choice, control and flexibility
The NRFM Self-Invested PRSA is a non-standard PRSA contract. It offers the PRSA holder the opportunity to manage their retirement funds without the investment restrictions found with many traditional life company contracts. The NRFM Self-Invested PRSA is best suited to individuals that have a clear understanding of investment risk and prefer to retain control over the investments they choose for their pension.
As with all our self-invested products, funds can be spread across a wide range of allowable investments including:
- Direct share dealing facilities through a nominee stock broking account/online platform
- Direct property and syndicated investments
- Bank deposit accounts
- Structured products such as tracker bonds
- Institutional funds including many leading external investment managers
- A variety of collective investment schemes including unit trust arrangements
Competitive and transparent charges
In addition to flexible investment choice, we believe that our PRSA is competitively priced, ensuring cost effective management of retirement assets.
Our PRSA contracts are subject to an Annual Management Charge (AMC) approved by the Pensions Authority, which is calculated by applying a percentage based on the size of the entire PRSA fund. There are no entry or exit charges for investors in the NRFM Self-Invested PRSA.
For more information please refer to our PRSA Brochure brochure or contact your Financial Advisor.