With regards to starting a private pension (where you are not a company owner or director), if your current employer does not provide one, your options are a Personal Pension or a PRSA. Personal circumstances and future employment plans will influence which best suits each individual case.
A Personal Pension Plan can offer better value in terms of charges than a PRSA, but if you later join a new employer pension scheme, you would need to first transfer it into a PRSA before then transferring into your new employer scheme if you wished to do so.
A PRSA is fully portable if you change your job and like with a Personal Pension you can stop and restart making contributions at any time. However, although not obliged to do so, your employer may contribute to your PRSA, whereas an employer cannot contribute to a Personal Pension Plan.
There are two types of PRSA’s – Standard and Non-standard.
Standard PRSA: A standard PRSA is one where you cannot be charged more than 5% on the contributions you pay and 1% a year on the funds under management; the choice of investment funds are more limited than non-standard PRSA’s.
Non-standard PRSA: A non-standard PRSA is one where the fund management charge may exceed 1% PA in return for broader investment fund choice.
If you are a member of your company’s pension scheme and would like to make additional retirement savings, you have the option of setting up an AVC PRSA into which additional voluntary contributions (AVC) can be paid and/or transfers from existing AVC pension arrangements can be made.