KBC’s leaving Ireland. The Belgian bank that once seemed set to challenge the dominance of AIB, Bank of Ireland and Permanent TSB is packing its bags. If you have PRSA pension with KBC Bank, should you stick with it or move? We outline your options.
The KBC PRSA seemed a great alternative
When it comes to investments and pensions, there are usually better options than the main banks. But KBC seemed like a brief breath of fresh air. Only a year ago they unveiled a new PRSA pension through their app.
There was a simplified range of funds, and the promise that KBC had “taken the complexity out of pensions”. The charges were significantly cheaper than many of the Irish banks.
Then, the bombshell.
In April 2021, just six months after launching its Lifestyle Extra PRSA, KBC announced it was leaving Ireland altogether.
That has certainly put the complexity back into pensions for KBC customers. So, if you have a KBC PRSA, what should you do?
Right now, it’s unclear exactly how KBC’s exit will play out. But a few things are clear. The bank is gradually being carved up.
The process is well underway in dealing with KBC’s loans. Bank of Ireland is likely to take on most of KBC’s performing loans and liabilities. KBC’s non-performing loans are being sold to a US fund, and will be administered by Pepper.
So what will happen KBC’s PRSA and pension customers? Well, to start, the service is gradually being whittled back:
Non-KBC customers can no longer open a PRSA with them.
Existing KBC customers won’t be able to open a PRSA after 15 November 2021 (that is, just up to the 2020 income tax deadline).
Existing KBC PRSA customers are simply told that “There is a possibility that you may be required to transfer your PRSA to another provider on a given date in the future”. So it sounds like the treatment will resemble that of the KBC loan customers – they will be shifted on to another PRSA provider, with no say in the matter.
Just want to get moving now? Let us know your details here:
KBC’s committed… to leaving
What’s clear is that KBC means business when it says it is leaving Ireland. In the space of six months, it has put its Dublin HQ up for sale, agreed to sell most of its loans, and stopped taking a bunch of new customers.
In August, KBC could guarantee staff their jobs only until the end of October.
So where does that leave you as a KBC pension customer? If your pension is with KBC, you have two main options.
Sit and wait…
You can do nothing and wait to find out what will happen your pension, or you can take charge of your pension and assess your options now.
If you stay put, the bank has at least said that “The transfer value of your KBC PRSA/ KBC Pension at that date or if you wish to transfer at any other time will have no penalties or charges applied”.
Well, that’s a legal requirement, so no surprise there.
What’s less clear is who will give advice on the PRSA, who will administer the account when you want to make changes, what technology they will use, what they will charge in future, and how your KBC pension will be invested.
…or take charge now
The alternative is to consider a move to another pension provider now.
Moving your PRSA away from KBC now is simpler than you think, and offers an opportunity to get clarity on all these questions.
It’s also a great chance to think about your pension provision more generally. For example, you might want to access a particular style of investment such as technology, or ethical funds. You might be seeking easy access to advice so you start to plan as you approach retirement. Or you might just like to put the KBC exit from Ireland behind you.
Whatever the case, we’d be happy to help you think about your options for your KBC pension. Just let us know your details below.