Personal Retirement Savings Accounts (PRSAs) were first introduced in Ireland through the Pensions (Amendment) Act 2002.
A Personal Retirement Savings Account is a long-term personal retirement account designed to enable you to save for retirement in a flexible manner (this is especially important for people with no pension provision).
Your PRSA is a contract between you and a PRSA provider in the form of an investment account. PRSAs allow you to change employment and continue to use the same PRSA. You can also switch from one PRSA to another at any time, free of charge.
Tax relief based on your age will be given by the Government for the contributions you pay into your PRSA.
There are two types of PRSA: Standard PRSA and Non-Standard PRSA.
The main difference between the two is that the maximum charges, by the provider, under a Standard PRSA cannot exceed 5% of contributions paid and 1% per annum of the PRSA assets.
There are though some restrictions on the kind of assets a standard PRSA can invest in. As a result, Smith & Williamson will only manage Non-Standard PRSAs.
The Pensions Board and the Revenue Commissioners are jointly responsible in Ireland for approving PRSA products. The Pensions Board supervises the activities of providers in relation to their approved products and monitors compliance with the legislation regarding PRSAs.
As part of the Pension Board's role, a register of PRSA providers and their products is available. PRSA have many applications when it comes to Retirement Planning. We recommend that one should seek independent financial advice before deciding on their suitability for one’s retirement.