ࡱ> ]_\M bjbj== -:WWl.......B8J VlBWlVVVVVVV$MY m[| WQ. WW..qW4WWWX..VWVWBWP..FV lB nSLFVW<WS[[FVWBB.... Brief Guide to PRSAs What is a PRSA? PRSAs are low-cost, easy access, long term personal investment accounts designed to allow people to save for retirement in a flexible manner. A PRSA is a contract based product between an individual contributor and a PRSA Provider and the individual is the beneficial owner of the PRSA Assets - no legal or equitable charge may exist over the PRSA Assets (no trust/trustee). Who are PRSA's suitable for? A PRSA may be suitable for employees who are either : Self employed, or Working in a job that does not entitle them to a pension when they retire. The legislators have imposed restrictive conditions on transfers from Occupational Plans to PRSAs and consequently it is unlikely such transfers will occur to any significant degree. The objective of the legislators is that PRSAs should be a new option for Employees who are not eligible to join a Pension Plan at work, rather than replacing existing Occupational Plans. Standard PRSA's There are two types of PRSA; Standard PRSAs which are subject to a maximum charge of 5% of each contribution and 1% pa of the fund, and Non-Standard PRSAs which are not subject to maximum charges. How does a PRSA work? The PRSA is owned by the individual personally. Any money put into it is used to buy units in a unit linked investment fund. PRSAs usually offer a choice of different types of investment funds. If the individual does not want to have to choose which fund to invest in, contributions will be automatically invested in a default fund, which will usually be a Managed Fund, which invests in a mix of shares, property, bonds and deposits. Some unit funds may offer guarantees, but most dont. Whats so special about PRSAs? A PRSA is just another pension plan. However there are some important differences: Individuals can pay in as little as 20 per month. For employees not included in an Occupational Plan for a pension (and who have completed at least 6 months employment), University College Cork must provide a facility for that employee to contribute to a PRSA by deduction from their salary or wages. PRSAs cannot charge individuals for stopping, restarting, or varying their contributions. PRSAs also cant make a fixed monetary charge to their account; charges can only be a % of what has been paid in and a % of the accumulated fund. PRSAs are therefore very flexible and can accommodate people who arent sure what they can afford to pay into a pension plan. Have PRSAs anything to do with Special Savings Incentive Accounts (SSIAs)? No. They are completely different. Even if individuals have an SSIA already, they can still contribute to a PRSA. Is Tax Relief available on PRSA contributions? Yes, if an individual has income from a non pensionable employment or from a self employed trade or profession. These types of earnings are referred to as relevant earnings. PRSA contributions are deductible against relevant earnings for income tax, up to an annual limit related to age: Age in tax yearPRSA tax relief limit for that year, as % of relevant earningsUnder 3015%31- 3920%40  4925%50+30% The maximum relevant earnings which can count for tax relief purposes in a tax year are 254,000. The above limits are inclusive of any contributions which the individual may also be making to a Personal Pension Plan. PRSA contributions are deductible for PRSI purposes against income from an employment, but are not deductible against income from a self employed trade or profession. When can Benefits be drawn from a PRSA? It depends. For Employees, they can draw on their PRSA on early retirement from their job, with their Employers consent, at any time from 50 onwards Otherwise, an individual can draw on their PRSA at any time from 60 onwards, or earlier permanent disability. When benefits are drawn from a PRSA, individuals can : Take 25% of the fund as a tax free lump sum, and Use the balance to buy a guaranteed annuity or invest it in an Approved Retirement Fund (ARF), where the capital can be maintained and drawn from in retirement as needed, subject to investing at least 63,500 of the fund in a guaranteed annuity or an Approved Minimum Retirement Fund. /0 abc (*@BZ\lp5CJ 56OJQJ5\CJ5OJQJ\5CJ :5CJ6/0 9r /$$d%d&d'd-DM &NOPQa$,$d%d&d'd-DM &NOPQ]^iggggaggggJ & FhEƀu^hJ & FhEƀu^h E F 3 4 f J & FhEƀu^hf .abca[Y[YY[Y[N & F;Eƀu^`;N & F;Eƀu^`; CD $IfDC$Eƀ&u  (v8pp$If$$IfTl0$    t 0644 la(*8@v0pp$If$$IfTl0$     t 0644 la@BRZv4pp$If$$IfTl0$    t 0644 laZ\dlv$pp$If$$IfTl0$     t 0644 lalnp68vttttntttttt$$IfTl0$    t 0644 la SN & F hhEƀu^h hN & F hhEƀu^h*+\]WO & F hEƀu^hO & F hEƀu^hh^h $a$ + 0PP&P . 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