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Types of pension

There are three main types of pension in Ireland: the State pension, pensions provided through your work, and pensions you arrange yourself – also known as personal pensions.

Moneycube’s specialty is helping people arrange their own pensions.

Such pensions come with lots of different names, as you’ll see in our jargon buster below.

The key is that they are personal to you, rather than linked to, or run by, an employer.  That means you can take decisions on how much to contribute, how much fees you pay, and what to invest in.  (We can help with all that).

Personal pension types jargon buster

PRSAs: A personal retirement savings account is a highly flexible, tax-protected pension account that anyone can open.  You can get income tax relief on you contributions, and can start, or stop your contributions at any point.  On top of that, the charges are capped by law, and you can bring your PRSA with you when you change jobs.  Read more

Retirement annuity contract (RAC, or sometimes personal pension): This is a personal pension is held in your own name, independently from your job.  Your employer can’t contribute to this pension, so it’s often the right choice for self-employed people, or people who aren’t offered a pension through their work.

Executive pension: An executive pension is set up by a company for specific employees.  Confusingly, you don’t have to be an “Executive” to start this pension.  Both the company and the individual can contribute to the pension, it’s possible to make quite large contributions, and the company’s contribution is not subject to income tax, PRSI or USC.

Personal retirement bond, or buyout bond.  This is a pension set up to hold a pension you’re taking with you when you leave a job.  Instead of the pension remaining with your old employer, you manage it directly with the provider of your buyout bond.

Self-directed pension, or self-invested pension plan:  This is a pension where you decide what to invest in yourself.  It’s possible to include all sorts of assets in a self-invested pension plan.  At Moneycube, we specialise in helping you place it into investment funds.

 

Read on: Self-invested pension plans