News and Media

Pension transfers to a PRSA will prove very beneficial, especially for those facing early retirement or redundancy

Harry Cassidy and John Mulholland, directors at Custom House Capital Limited, look at the advantages of transferring from existing pension schemes to their CHC Non-Standard PRSA

Tell us a bit more about Custom House Capital Limited (CHC)?

CHC is an independent wealth management business offering balanced and diversified portfolio management. Originally set up in 1997, we established an asset management division in 2000 and now manage over €1.5 billion worth of assets on behalf of some 1,500 direct and indirect clients.

Have global economic events affected your business?

One of our core strengths is pre and post retirement planning which is long-term in nature. So, while the investment landscape has become trickier, we continue to focus our minds and our clients’ minds on the longer term. In this respect, diversification is central to any investment strategy.

What services do you offer brokers?

We offer brokers a range of diversified investment strategies with opportunities across all asset classes including international equities; structured products such as 100% capital guaranteed commodity bonds; European commercial property funds; cash and corporate/government bonds. This range of solid investment options is complemented by a highly attractive fee structure.  

How can CHC specifically help brokers in the current climate?

Traditional pension funds have been dragged down due to poor investment performance; market trends have shifted and clients’ attitudes to risk have changed – they have become disenchanted with pensions. But the CHC PRSA, a Non-Standard Personal Retirement Savings Account, is a highly flexible and transparent long-term pension account.

Suitability

The CHC PRSA is suitable for self-employed individuals and those with personal pension schemes. It is also particularly suited to senior executives who have been making AVCs and are facing early retirement or redundancy as well as members of Defined Contribution Occupational Pension Schemes that are winding up, which is particularly relevant in today’s economic landscape. Transfers from existing arrangements to the CHC PRSA are free of charge. We believe that the CHC PRSA offers an attractive alternative to more traditional Buy out Bonds and it will undoubtedly be one of the main sources of revenue for us and our broker network in 2009 and beyond.

Text Box: How can brokers use the PRSA? • Personal / Self Employed • AVCs – senior-executive • Transfer from existing funds: o DC Transfers o Wind-Ups o Redundancy o Early Retirement

Redundancy / Early Retirement

Where someone has been made redundant or is taking early retirement; is aged 50 or over and has been in a current pension scheme for less than 15 years, by transferring the proceeds of that scheme to a CHC PRSA he/she can access 25% of the fund as a tax free lump sum. Immediate access to cash is a huge selling point right now given the recent spate of redundancies.

In certain circumstances, before a transfer from an existing occupation pension scheme to a PRSA can be made, a client will need a Certificate of (Benefits) Comparison and a written statement as to why this transfer is in his/her interest. CHC will provide this certificate to facilitate the transfer to the CHC PRSA.

Free Transfers

Transfers from existing pension schemes are free of charge including schemes that are winding up. Any further contributions will benefit from generous tax relief and can be made once-off or regularly.  

Strong Investments

CHC offers a range of strong investment funds across asset classes such as cash, equities and property, offering a real alternative to other pension arrangements. The CHC PRSA is also highly transparent in terms of fee structure and the underlying investments and on death funds can pass to the investor’s spouse or estate tax free. 

How do brokers fit into your business strategy?

Brokers have always been important to our growth strategy as they control a significant part of the pension market. We are continuing to look to form relationships with key brokers nationwide to further develop our services for both pension and private clients.

Unique

With the CHC PRSA, we are offering brokers a real alternative to the Life Company option - they can offer clients a unique product in the pension’s arena in terms of control, flexibility, quality of investments and, in certain circumstances, immediate access to a tax-free lump sum. We expect the CHC PRSA to generate significant revenue for us and our broker network in the coming year.