Personal Pensions and PRSAs
Personal pensions
Personal pensions are individual contracts, typically arranged by an intermediary, with tax relief on contributions. Personal Retirement Savings Accounts (PRSAs) are a statutory product under the PRSA Act 2002, offered by PRSA providers approved by the Pensions Authority, with Standard and Non-Standard variants. Know the contributory and transfer PRSA distinction, the 1% charge cap on contributions to Standard PRSAs, and the fund management charge cap.
Access and portability
Employers must provide access to a PRSA for employees (the "designated PRSA" route) where no occupational scheme is offered. PRSAs are portable across jobs and can accept transfers from other arrangements, subject to rules. Approved Retirement Funds (ARFs) and Approved Minimum Retirement Funds (AMRFs) are the drawdown vehicles for PRSA/personal pension maturity.
Regulation and disclosure
Providers must issue statements, disclose charges, and follow cooling-off and disclosure requirements. The Pensions Authority supervises providers; Revenue approves the tax regime.
Traps
- The 1% cap applies to Standard PRSA contributions, not to Non-Standard or to fund management charges in the same way.
- Confusing a PRSA with an occupational scheme - no employer trusteeship.
- Assuming an ARF is a pension scheme - it is a tax-approved fund.
- Forgetting that AMRF applies only where the fund is below the statutory threshold.
Worked rule of thumb
If a client contributes €10,000 to a Standard PRSA, the maximum contribution charge is €100 (1%). Anything above that on a Standard PRSA is a compliance error.