10 Things you need to know about PRSAs

1) With a PRSA the employee owns his/her own retirement fund it now classifies as real wealth that can in turn hand down by way of legacy. The compulsory purchase of an annuity at retirement has been removed.

2) Employees have aright to opt in and out of these contributions as each sees fit.

3) Tax-deductible levels are set on a graded scale to a maximum of 30pc of earnings from age 50.

4) Standard PRSAs have capped charges built into the contract. The maximum charge comprises a 5pc entry cost and a 1pc annual management fee.

5) Standard PRSAs can facilitate a default investment strategy that gradually reduces exposure to world equity markets as one gets closer to retirement age.

6) Non-Standard PRSAs tend to have a wider range of funds available
at a higher cost.

7) Each PRSA holder is sent a statement of account every six months
by their chosen provider.

8) A Statement of Reasonable Projection is sent out once each year, and on request

9) Employees must pay over funds to a PRSA provider within 21 days of the end of the month in which they have been deducted.

10) The Government is on record as saying the employer contributions may become compulsory in the future if PRSAs fail to deliver wider pension coverage. This may need to happen to encourage people to save for retirement.

Example as to whether to start your pension at 30 or 35 -