What are Personal Retirement Savings Account (PRSA)?
PRSAs a type of account that an employee can use to save for their retirement in lieu of an occupational pension scheme from their employer.
At present, there is no legal mandate for an employer to provide their employees with an occupational pension scheme. While numerous large firms in Ireland may have such provisions in place, a lot of the smaller ones do not.
However, if an employer does not offer occupational schemes, then they are legally obligated to have access to a Personal Retirement Savings Account (PRSA) for their employees.
Who can get a PRSA?
While most people can avail of a PRSA, they are particularly beneficial for those who do not have a pension arrangement with their employer.
Employees who are not entitled to join a pension scheme within 6 months of working in their current position must be given access to a PRSA by their employer as an alternative.
Are there different types of PRSAs?
There are two types of PRSAs available to choose from – a standard PRSA, and a non-standard PRSA. The main difference between these two options is that the charges are capped for standard PRSAs, but not for non-standard PRSAs.
Additionally, while the types of investments are restricted in standard PRSAs, this does not apply to non-standard PRSAs.
Should I get a PRSA?
Before making the decision to get a PRSA, you should ask yourself a number of questions:
- Can I currently avail of a pension scheme in my job?
- Should I start a PRSA if I already have a pension scheme?
- Do I need a PRSA if I already have a defined benefit scheme?
- Do I need a PRSA if I have a defined contribution scheme?
Contact a solicitor
Although it may be some years off for a lot of people, questions surrounding your pension, what to do with your personal finances, and how it will affect you upon retirement can be daunting considerations to make alone.
For this reason, it is strongly recommended that you speak to an experienced solicitor with expertise in pension and benefits matters to ensure that you are making the right decisions for your future finances.Please feel free to get in touch so we can advise you on your employment and estate management issues.
*In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.*