A straightforward Personal Retirement Savings Account

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A straightforward Personal Retirement Savings Account Powered By Docstoc
					               prsa
A straightforward Personal Retirement Savings Account




1%,5%
   Clear PRSA
                                To build up a fund to help provide for
    Aim                         your retirement.

                                Low to high depending on
    Risk                        option or mix of options chosen.

    Funds
    available          23       Twenty Three


    Time               60-75
                                Normally between ages 60 and 75.
    period
    Jargon-                      Yes.
    free




  Committed to Plain English
  There is no financial jargon in this booklet and everything you need to
  know is written in an upfront and honest way. We are delighted to have
  received the ‘Best in Plain English’ Award from the Plain English Campaign. This
  award recognises our contribution to communicating clearly. For this award, we
  were chosen ahead of 12,000 other organisations from 80 countries.

All information including the Terms and Conditions of your plan will be provided in English.

The paper in this booklet came from a managed forest.

Pension language is sometimes confusing and hard to understand, so to make things easier
for you, this guide includes a glossary to explain a few common ‘pension terms’ that may
pop up either in our literature or during your financial review. That glossary is on page 42.


The information in this booklet is correct on 14 July 2011 but may change.
Contents
1   What is a PRSA?                     2


2   Clear PRSA                          5


3   Fund guide                         13


4   Your options when you retire       25


5   Great service                      30


6   Your questions answered            32


7   Glossary                           42




                                   1
1 What is a PRSA?

PRSA stands for ‘Personal Retirement                 Tax relief
Savings Account’. It is a contract between           To encourage people to save for retirement
you and a PRSA provider, in this case Irish          the Government provides significant tax
Life. PRSAs make it easier to save for               relief on PRSA pension plans.
retirement because they offer value for
money, flexibility and convenience.                  You can claim income tax relief on your
Whether you are an employee, self-                   contributions, tax free investment returns
employed or between jobs, a PRSA helps               and you may be able to take a retirement
you save for retirement. And if your                 lump sum on retirement, some or all of this
employment status changes or you move to             may be tax free.
a new employer, you may be able to bring
your PRSA with you. You can also use your            You are not guaranteed income tax relief,
PRSA to add to the pension benefits already          but you will generally get income tax relief
available from your job.                             on contributions up to the percentage of net
                                                     relevant earnings defined on the next page
                                                     and set out on the table below.
How PRSA works
                                                        % of
                                                      earnings
Contributions                                         50%
You invest regular contributions or one-off           40%
contributions, or both. Most people choose                                                                 40%
                                                      30%                                        35%
regular contributions because it is easier and                                          30%
                                                      20%                      25%
smoothes out the cost. If you are an
                                                                      20%
employee and are not in a pension plan at             10% 15%
work, your employer could also contribute to           0% under 30   30 to 39 40 to 49 50 to 54 55 to 59      60
your plan.                                                                                                 and over
                                                                              Your age

                                                         These levels were correct in July 2011



                                                 2
If you are an employee, these limits include         contracts, other PRSAs and employee
any contribution your employer may make.             contributions to company pension schemes
                                                     (including AVCs).
Any employer contributions over these limits
will be treated as a benefit-in-kind (a perk         Growth
that does not take the form of salary) for the       We invest your contributions (less any
employee.                                            contribution charge) in a fund where any
                                                     growth achieved will not be taxed.
Please talk to your Financial Adviser for more       Sometimes the fund you have chosen may
information on the possible benefits-in-kind         have to pay tax on some of the assets held
implications on your employer contributions.         outside of Ireland depending on the tax rules
                                                     of the country.
If you contribute more than these amounts,
or if you contribute during a period when            Retirement fund
you are unemployed, you can carry forward            By the time you retire you will hopefully
income tax relief for future years.                  have built up a big enough fund for your
                                                     retirement.
Earnings are defined as follows:
                                                     Normally, you can take your benefits
• If you are an employee, your earnings are          between the ages of 60 and 75, but there
  your salary plus any overtime, bonuses             are certain exceptions (see section 6 for
  and benefits-in-kind.                              more details). At that stage, you’ll have a
                                                     number of choices in terms of what you
• If you are self-employed, your earnings are        want to do with your money.
  your ‘net relevant earnings’. (That is, your
  income during a tax year, less any                 First of all, you can take a part of your
  allowances, losses and certain charges and         pension fund as a retirement lump sum. You
  deductions (such as mortgage interest)             may be able to take some or all of this
  you can claim income tax relief on).               retirement lump sum tax free. The amount of
                                                     this will depend on Revenue limits and your
Income tax relief is not available on net            job status (for example self-employed or an
relevant earnings which are more than                employee) at the date you take your benefit.
¤115,000 (July 2011) and include
contributions to other approved pension              Depending on your circumstances the
arrangements, such as retirement annuity             balance of the fund can be used for one or
                                                     more of the following:


                                                 3
• buy a pension for life
• leave the rest of your retirement fund in
  your PRSA plan and continue as an
  investment until a later date; or
• take as a taxable cash sum.
Income tax, the Universal Social Charge,
PRSI (if applicable) and any other charges or
levies (tax) due at the time will be taken
from each of these options. We explain your
retirement options more fully on pages 25 to
29.




                                                4
2 Clear PRSA

Our Clear PRSA helps you build up a                 Clear PRSA can offer you the perfect
fund for your retirement.                           solution – an easy-to-understand
                                                    pension plan which puts you in control
Everybody knows that it makes sense to              while offering you great choice.
plan for retirement. Yet many people
put off starting a pension because they
think pensions are confusing or hard
work.
Is this plan suitable for me?
This plan might suit you if you:                     This plan might not suit you if you:

4    are looking for a long-term investment          5 do not need a plan to provide for your
     plan to provide for your retirement;                retirement;

4    have at least ¤300 a year to invest;            5 have less than ¤300 a year to invest;
4    don’t need access to your investment until      5 need to get access to your investment
     you retire (age 60);                                before you retire (age 60);

4    are happy with the charges set out in this      5 want a plan which offers more funds but
     booklet;                                            may have higher charges as a result;

4    are happy with the choice of funds              5 are not happy with the choice of funds
     available and understand that the value of          available; or
     your investment could fall as well as rise;

4    would like to take advantage of the             5 are not currently paying income tax, and
     income tax relief available on the pension          cannot take advantage of the income tax
     contributions; and understand that when             relief available on pension contributions.
     you retire, your pension benefits (after the
     retirement lump sum) are taxed as income.
     Please see page 25 for more details.

If you think the Clear PRSA plan could be suitable for you, please talk to your financial adviser.
                                              5
What are the charges?
Clear PRSA offers you great value for money, giving you a straightforward pension solution
with very competitive charges.

Contribution charges
Table 1 – contribution charge on regular contributions
Regular contribution       Contribution      Percentage of      Reduced          Percentage of
each year                  charge            contribution       contribution     contribution
                                             invested           charge after     invested*
                                                                five years*
Less than ¤9,000           5%                95%                4.5%             95.5%
¤9,001 to ¤11,999.99       4.25%             95.75%             3.75%            96.25%
¤12,000 or more            3.5%              96.5%              3%               97%

*Reduced contribution charge after five years
As shown in table 1 above, after your PRSA has been in place for five years, we will reduce the
contribution charge by 0.5%.

Table 2 – contribution charge on one-off contributions
 One-off Contribution                       Contribution charge         Percentage of
                                                                        contribution invested
Less than ¤12,500                           5%                          95%
¤12,501 to ¤24,999.99                       4.25%                       95.75%
¤25,000 or more                             3.5%                        96.5%


Contribution charge on transfer contributions
There is no contribution charge on funds transferred into your PRSA from approved pension
schemes, so 100% of the contribution will be invested.


If your regular contributions change in the future
If you change your regular contributions in the future, this may change the contribution
charge you pay.


Increased regular contribution
If you increase your regular contribution, and this results in your regular contribution going
into a higher band (as shown in table 1 above), the contribution charge for the higher band
will apply to all of your increased contribution.
                                              6
For example, if your regular contribution is       You can pay any contribution over these
¤8,000 a year, the contribution charge is          amounts as a one-off contribution. The
5%. If you increased your regular                  charges for one-off contributions are
contribution to ¤10,000, it would go up            shown in table 2 on page 6.
into the higher band and the contribution
charge would be 4.25% on ¤10,000.                  Yearly fund charge
                                                   Over the term of your plan, we take a
Reduced regular contribution                       monthly charge from the value of your
If you reduce your regular contribution,           retirement fund. This charge is equal to 1%
and this results in your regular                   a year.
contribution going into a lower band (as
shown in table 1 on page 6), the                   Please see your Preliminary Disclosure
contribution charge for the lower band will        Certificate which shows you how the
apply to all of your reduced contribution.         yearly fund charge affects a typical PRSA.


For example, if your regular contribution is       Government Levies
¤10,000 a year, the contribution charge is         Any government levies due will be
4.25%. If you reduce your contribution to          deducted from your fund as required.
¤8,000, it would go down into the lower
band and the contribution charge would
be 5% on ¤8,000.


Contribution limits for regular
payments
As we have explained, there is no
maximum limit on the total amount that
can be paid into this plan. However, the
highest regular contribution you can pay
is:
• ¤5,000 a month;
• ¤7,500 every three months;
• ¤15,000 every six months; and
• ¤30,000 a year.


                                               7
What funds are available?
The following funds are available. These are explained in detail in Section 3.
Recommended Portfolio Funds

Managed Portfolio Fund 1 (Foundation)*
Managed Portfolio Fund 2 (Base)*
Managed Portfolio Fund 3 (Core)*
Managed Portfolio Fund 4 (Intermediate)*
Managed Portfolio Fund 5 (Dynamic)*
Managed Portfolio Fund 6 (Aggressive)*

Funds designed to be used with Lifestyle Options and Default Investment Strategy

Stability Fund
Annuity Fund
ARF Fund

Other Funds

Global Cash Fund
Safe Deposit Fund
Pension Protection Fund
Indexed Euro Corporate Bond Fund
Consensus Cautious Fund
Consensus Fund
Consensus Equity Fund
Indexed Irish Equity Fund
Indexed European Equity Fund
Indexed Japanese Equity Fund
Indexed North American Equity Fund
Indexed Pacific Equity Fund
Indexed UK Equity Fund
Indexed European Property Shares Fund
*We recommend you use the Managed Portfolio Funds with our Lifestyle Options.

                                              8
                                                   Portfolio Funds or the funds of your choice.
What investment
                                                   Between 25 years to six years before you
strategies are available?
                                                   retire, we will switch 2% of your fund into the
                                                   Stability Fund every year.
We have four investment strategies for you
to choose from – the Annuity Lifestyle
                                                   When you are six years before retirement,
Option, the ARF Lifestyle Option, the
                                                   60% of your fund is invested in your fund
Default Investment Strategy (Annuity) and
                                                   choice and 40% in the Stability Fund. At that
the Default Investment Strategy (ARF). If
                                                   date, we gradually switch the total fund and
you don’t choose an investment strategy
                                                   future contributions into the Global Cash
when you take out your PRSA, we will
                                                   Fund and the Annuity Fund until one year
automatically put you into the Default
                                                   before your retirement. For the last year your
Investment Strategy (Annuity).
                                                   fund is entirely in the Global Cash Fund (25%)
                                                   and Annuity Fund (75%).
1. Lifestyle option strategies
Our lifestyle options strategies involve
                                                   This strategy will suit you if you aim to buy an
gradually moving your investment into a mix
                                                   annuity with your retirement fund.
of low and medium-risk funds as you move
closer to retirement.
                                                   The table on the next page shows how your
                                                   investment is automatically switched between
It is generally recommended that the
                                                   funds in the Annuity Lifestyle Option. If, for
Managed Portfolio Funds form part of the
                                                   example, you take out a Clear PRSA and you
lifestyle option, but you can choose your
                                                   have 18 years to retirement, we will at first
own funds if you prefer. The percentage
                                                   invest 84% of your contributions in your own
invested in each fund at any one time
                                                   choice of funds and 16% in the Stability Fund.
depends on how long you have left to your
                                                   The contributions will gradually switch over
retirement date.
                                                   the rest of the term as explained above. If you
                                                   are within 25 years to retirement, the first
The Annuity Lifestyle Option
                                                   switch will take place five days after you select
If you are more than 25 years from your
                                                   this strategy. You will be fully invested in your
chosen retirement date, we fully invest your
                                                   own choice of funds until this switch
contributions in the Managed
                                                   happens.


                                               9
      Annuity Lifestyle Option
        Higher                                                                                                                                                                                  Lower

100

80

60

40

20

 0
      More than 25 24 years     22 years     20 years     18 years     16 years     14 years     12 years     10 years      8 years      6 years      5 years      4 years      3 years      2 years      1 year
        years to       to           to           to           to           to           to           to           to           to           to           to           to           to           to           to
       retirement retirement   retirement   retirement   retirement   retirement   retirement   retirement   retirement   retirement   retirement   retirement   retirement   retirement   retirement   retirement


                 Your chosen fund                  Stability Fund                  Annuity Fund                   Global Cash Fund




                                                                                                                   The current risk and volatility levels
                     The ARF Lifestyle Option                                                                      associated with your chosen funds and the
                     If you want to invest your                                                                    other funds in the lifestyle options are
  retirement fund in an Approved                                                                                   outlined further on in this booklet. You
  Retirement Fund (ARF) when you retire,                                                                           should ensure that you are happy with the
  you can choose our ARF Lifestyle Option.                                                                         risk and volatility levels your funds will be
  This is identical to our Annuity Lifestyle                                                                       invested in throughout the lifetime of your
  Option except that instead of switching                                                                          plan. All funds can rise and fall in value.
  into the Annuity Fund, you will switch
  into the ARF Fund. As with the Annuity                                                                           You can switch out of a lifestyle option
  Lifestyle Option, you can invest in the                                                                          strategy at any time.
  Managed Portfolio Funds or choose your
  own funds.                                                                                                       The percentage invested in each fund at
                                                                                                                   any one time depends on the term you
                                                                                                                   have to go to your retirement date.
 We do not recommend the lifestyle option                                                                          If your retirement fund is automatically
 strategies if you want to invest in low-risk                                                                      moved into less risky funds, such as cash,
 funds. This is because with those                                                                                 and stock markets rise in the years leading
 strategies your investment is gradually                                                                           up to your retirement, this could lead to
 moved into a mix of low-risk and medium-                                                                          your retirement fund being less than it
 risk funds.                                                                                                       could have been.

                                                                                                         10
2. Default Investment Strategies                    For the last year, 25% of your retirement
The default investment strategies include           fund is invested in the Global Cash Fund,
funds chosen by us. You cannot choose               and the other 75% is invested in the
your own funds. We will gradually switch            Annuity Fund.
your investment to certain low and
medium-risk funds as you get closer to
retirement. These strategies are designed                      Default Investment Strategy
to meet the needs of typical investors who                     (ARF)
are planning to buy an annuity or invest in                 The Default Investment Strategy
an ARF when they retire. They invest                (ARF) is suitable if you plan to invest
through unit-linked funds. The assets               your retirement fund in an Approved
which are invested in these funds will              Retirement Fund when you retire.
spread risk, can be cashed in quickly, and
are valued often.                                   Our Default Investment Strategy (ARF)
                                                    is identical to our Default Investment
Default Investment Strategy (Annuity)               Strategy (Annuity), except your
If you are more than 25 years from your             investment is switched into our ARF
chosen retirement date, your contributions          Fund rather than our Annuity Fund.
are fully invested in the Managed Portfolio
Fund 4 (Intermediate). Between 25 years
and six years before you retire, each year          If you choose a default investment
we will switch 2% of your retirement fund           strategy, you should know that the funds
and future contributions into the Stability         we have chosen could fall in value, some
Fund. When you are six years from                   more than others, during the term of your
retiring 60% of your retirement fund will be        plan. The default investment strategies try
invested in the Managed Portfolio Fund 4            to make sure that the value of your
(Intermediate) and 40% in the Stability             pension fund does not change dramatically
Fund.                                               as you get nearer your chosen retirement
                                                    date.
At that date, we gradually switch your
retirement fund and future contributions            If your retirement fund is automatically
into the Global Cash Fund and the Annuity           moved into less risky funds, such as cash,
Fund until one year before you retire.

                                               11
and stock markets rise in the years leading
up to your retirement, this could lead to
your retirement fund being worth less than
it could have been.


You can switch out of a default investment
strategy at any time. However, once you
have switched out of a default investment
strategy, you cannot switch back in. There
is no charge for any of the switches made
within the Default Investment Strategy.


3. Other investment options
If you do not choose to invest in any of
these strategies, you can choose any one,
or a combination, of the other funds
available (up to 10 funds) that we describe
in section 3.


If you choose your own funds, we will not
automatically switch your funds into more
secure funds as you get nearer retirement.
However, at any stage over the term of
your contract, you can ask to switch funds
into more secure funds, or in to one of our
strategies described above. This switch
will be free.




                                              12
3 Fund guide

Through Clear PRSA we offer a choice of
                                                          The fund that is right for you
top-quality funds to meet your needs.
                                                         depends on:

All the funds are managed by Irish Life
                                                  The amount of risk you are willing to
Investment Managers (ILIM), they are
                                                  take
Ireland’s biggest fund manager. As of July
                                                  • Lower-risk funds aim to protect your
2011, they manage over ¤32 billion of
                                                    investment from large falls in value, but
assets for private investors and leading
                                                    the potential for large gains is lower
Irish and international companies. Their
                                                    than if you choose a higher-risk fund.
ability to consistently deliver excellent
performance has seen them at the top of
                                                  • Higher-risk funds, such as those
investment tables and win many awards.
                                                    investing in company shares, do not
                                                    aim to protect your investment from
The wide range of funds gives you access
                                                    large falls in value, but you do have the
to different options including low-risk
                                                    potential to gain much more, especially
funds, share funds, property share funds
                                                    over the long term. If you invest in these
and portfolio funds, which include a
                                                    types of fund, you should realise that, in
mixture of different types of investments.
                                                    wanting a higher return, you need to
                                                    accept that the value of these funds can
                                                    move up and down, sometimes by large
                                                    amounts.

                                                  • How long you want to invest for
                                                    If you are investing in a pension plan it
                                                    is important to consider how long you
                                                    have left until you retire. If you are many
                                                    years away from retirement you may be
                                                    able to accept more risk than somebody
                                                    who is quite close to retirement.

                                             13
On the next page we have set out the full
range of investment funds available. We
divided these into high-risk funds with the
potential for higher returns, medium-risk
funds with the possibility of medium
return, and low-risk funds with lower
potential for returns.


We have also rated the potential levels of
volatility and return for each option on a
scale of 1 to 7. Volatility refers to the
potential ups and downs that a fund can
experience. A fund rated 1 will be very
low risk. A fund rated 7 will be very high
risk. Rating the funds in this way should
help you to compare the levels of risk that
different types of funds have.


Think about how you feel about the risks
associated with investing. Everyone's
situation is different, and everyone
handles risk differently. Together with your
financial adviser you can decide which
level of risk you are open to.



Warning: The value of your
investment may go down as well as
up.




                                               14
volatility
             Global Cash Fund
    1
volatility
             ARF Fund
    2        Safe Deposit Fund
             Stability Fund



volatility

   3         Indexed Euro Corporate Bond Fund



volatility   Annuity Fund
    4        Consensus Cautious Fund
             Managed Portfolio Fund 1 (Foundation)
             Managed Portfolio Fund 2 (Base)
             Managed Portfolio Fund 3 (Core)
             Pension Protection Fund




volatility
             Consensus Fund
    5        Managed Portfolio Fund 4 (Intermediate)
             Managed Portfolio Fund 5 (Dynamic)

volatility
             Consensus Equity Fund
    6        Indexed European Equity Fund
             Indexed Japanese Equity Fund
             Indexed North American Equity Fund
             Indexed UK Equity Fund
             Managed Portfolio Fund 6 (Aggressive)


volatility
             Indexed European Property Shares Fund
    7        Indexed Irish Equity Fund
             Indexed Pacific Equity Fund




                                        15
                                                       You can usually reduce the level of risk
Volatility scale and risk
                                                       attached to an investment by diversifying
levels
                                                       (splitting the investment ‘eggs’ between
                                                       different ‘baskets’) and leaving the
We rate the possible level of ‘volatility’ for
                                                       investment where it is for a longer period
each of our funds on a scale of 1 to 7. We
                                                       of time. (In other words, the longer you
refer to this as the ‘volatility scale’ or the
                                                       hold volatile investments for, the less
‘risk level’ of a fund. A fund with a risk
                                                       volatile the returns become.)
level of 1 is very low risk and a risk level of
7 is very high risk.
                                                       Our volatility scale can change.
                                                       Therefore the volatility ratings in this
Volatility refers to the potential ups and
                                                       booklet may not be the most up-to-date
downs that a fund may experience over
                                                       ratings. Please visit our website to see
time.
                                                       the most up-to-date volatility scale.

In more detail, volatility is a measure of
how the fund return (how the fund
performs) is different from the average
return of that fund over a period of time.
So, the bigger the difference from the
average return, the riskier the fund.


Our volatility scale assumes that all
investments are held on a long-term basis.
If an investment is held for a short term, it
will usually have a greater level of risk than
the volatility scale shows here.


You should remember that risk and
potential return are closely linked. In other
words, investments which are higher risk
tend to have higher returns over the long
term, but can also experience higher falls.


                                                  16
You can choose any combination of up to
                                                         Managed Portfolio Fund 1
10 funds. The section below gives a                      (Foundation)
description of each of the funds available        (Medium Risk, Volatility 4)
to you.

                                                  This portfolio fund is currently invested in
Portfolio funds (recommended if you               the Consensus Cautious Fund (see page
choose a lifestyle option investment              20 for description). It provides access to
strategy)                                         cash, bonds and equities, and sometimes
                                                  to alternative assets such as property.
A portfolio fund combines a number of
funds which invest in different types of
                                                        Managed Portfolio Fund 2
asset. Irish Life Investment Managers                   (Base)
choose the individual funds that make up a
                                                  (Medium Risk, Volatility 4)
portfolio fund.

                                                  This portfolio fund is currently invested
Our portfolio funds have been designed to
                                                  70% in the Consensus Cautious Fund (see
be used as the main funds within our
                                                  page 20 for description) and 30% in the
lifestyle option strategies and default
                                                  Consensus Fund (see page 21 for
investment strategies, and with our
                                                  description). It provides access to cash,
Stability, Annuity or ARF Funds.
                                                  bonds and equities, and sometimes
                                                  alternative assets such as property.


                                                         Managed Portfolio Fund 3
                                                         (Core)

                                                  (Medium Risk, Volatility 4)


                                                  This portfolio fund provides access to
                                                  cash, bonds and equities as well as
                                                  alternative assets such as property. The
                                                  fund is currently invested 70% in the
                                                  Consensus Fund (see page 21 for
                                                  description) and 30% in the Consensus
                                                  Cautious Fund.
                                             17
      Managed Portfolio Fund 4                              Managed Portfolio Fund 6
      (Intermediate)                                        (Aggressive)
(High Risk, Volatility 5)                           (High Risk, Volatility 6)


Most of this portfolio fund is invested in a        Most of this fund is invested in a mix of
diversified mix of global equities, with            global equities. This fund is currently
some bonds and other types of asset such            invested up to 85% in the Consensus
as property. This fund is currently invested        Equity Fund (see page 21 for description)
80% in the Consensus Fund (see page 21              and 15% in the Indexed Pacific Equity Fund
for description) and 20% in the Consensus           (see page 22 for description).
Equity Fund (see page 21 for description).
                                                    Funds designed to be used with
                                                    Lifestyle Options & Default Investment
     Managed Portfolio Fund 5                       Strategy
     (Dynamic)                                      The following funds are specifically
(High Risk, Volatility 5)                           designed to be used with the portfolio
                                                    funds above as part of our lifestyle option
Most of this portfolio fund is likely to be         investment strategies. However, you can
invested in global equities, with some              also choose them as part of your own fund
bonds and other types of asset such as              mix.
property. This fund is currently invested
70% in the Consensus Fund (see page 21
                                                               ARF Fund
for description), 20% in the Consensus
Equity Fund (see page 21 for description)
                                                    (Low Risk, Volatility 2)
and 10% in the Indexed Pacific Equity Fund
(see page 22 for description).
                                                    This fund is largely made up of bonds and
                                                    cash which currently account for about
                                                    70% of the fund, with the rest in shares
                                                    and alternatives (for example emerging
                                                    market shares). This fund aims to provide
                                                    moderate returns.


                                               18
        Stability Fund
                                                          Global Cash Fund
(Low Risk, Volatility 2)                          (Low Risk, Volatility 1)

This fund invests mostly in bonds and cash
                                                  This fund invests in bank deposits and
with a small amount in shares. This is
                                                  short-term investments on international
different to a standard managed fund
                                                  money markets. It is intended to be a
which has a higher proportion of shares in
                                                  low-risk investment, but you should be
it. This fund aims to provide moderate
                                                  aware that this fund could fall in value.
returns with low levels of ups and downs.
                                                  This could happen if, for example, a bank
                                                  the fund has a deposit with cannot repay
                                                  that deposit, or if the fund charge is
       Annuity Fund
                                                  greater than the growth rate of the assets
                                                  in the fund.
(Medium Risk, Volatility 4)


This fund invests in long-term Eurozone
                                                         Safe Deposit Fund
government bonds (those issued by
                                                  (Low Risk, Volatility 2)
countries that have adopted the euro as
their currency). The aim is to match the
                                                  The Safe Deposit Fund invests your
assets that an annuity will invest in when
                                                  contributions (less the contribution
you retire.
                                                  charge) in a deposit account and the
                                                  interest rates that this account will earn are
Other available funds
                                                  set out below. The price of units in the
We also have 14 other funds from which
                                                  Safe Deposit Fund will change each day to
you can build your own mix of funds to be
                                                  reflect the interest earned less the fund
used with or without the lifestyle option
                                                  charge. The aim of the Safe Deposit Fund
investment strategies.
                                                  is to give you a competitive rate of return
                                                  for your investment. The interest rates that
                                                  will apply are before your fund charge.




                                             19
The unit price of the Safe Deposit Fund                           banks cannot meet its commitments to us,
will change each day to reflect the interest                      you could receive less than the original
earned less the fund charge.                                      amount invested in this fund, or returns

                               Interest rate                      which are less than expected.
                               (before fund charge)
                                                                          Indexed Euro Corporate
AER up to                      ECB rate                                   Bond Fund
31 December 2011               (see note 2 below)
                               + 2%                               (Medium Risk, Volatility 3)

AER from                       Current variable rate
                                                                  This fund invests in investment-grade Euro
31 December 2011
                                                                  corporate bonds which are invested for
Note 1: AER is the annual equivalent rate applying
                                                                  different time periods. The fund aims to
currently.
Note 2: ECB rate is the European Central Bank rate. For an        track the performance of the Merrill Lynch
update on the current rates which apply, log on to
                                                                  EMU Large Cap Corporate Bond Index. By
www.irishlife.ie.
                                                                  providing access to a wide range of
These rates are offered for a limited period as shown
above.
                                                                  companies who issue bonds, the fund aims
                                                                  to provide long-term returns which are
We recommend that you consider the Safe                           greater than can be achieved by investing
Deposit Fund as a short-term opportunity                          in cash or government bonds. This fund is
with a view to investing in other funds on a                      suitable for investors who want a
longer-term basis. Irish Life may decide to                       reasonable return with less risk than share
close the fund to new customers at some                           based investments.
time in the future. We will invest your
contributions (less the entry charge) in a
                                                                           Consensus Cautious Fund
deposit account with one or more of the
following Irish banks – AIB, Bank of
                                                                  (Medium Risk, Volatility 4)
Ireland, permanent tsb or EBS. However,
your contract is with us, Irish Life
                                                                  The Consensus Cautious Fund is a
Assurance plc. We are committed to
                                                                  managed fund, where currently 65% of the
passing on the full value of the amounts
                                                                  assets are invested in the Consensus Fund
we receive from this deposit account to
                                                                  and 35% track the performance of shorter-
you, less the fund charge. If any of these
                                                                  term Eurozone government bonds. The

                                                             20
Consensus Cautious Fund aims to give               consistently in line with the average of all
mid-range levels of return with lower              funds in the market.
levels of ups and downs.
                                                            Consensus Equity Fund
         Pension Protection Fund
                                                   (High Risk, Volatility 6)

(Medium Risk, Volatility 4)
                                                   This fund aims to give good growth by
                                                   investing in the Irish and international
This fund invests at least 75% in long-term
                                                   share that the Consensus Fund invests in.
European government bonds to protect
                                                   By taking the average investment that all
the buying power of your retirement fund.
                                                   managers are making, the Consensus
The balance of the fund may be affected
                                                   Equity Fund avoids the risks associated
by worldwide interest rates. This makes it
                                                   with relying on the decisions of just one
an attractive fund if you are trying to
                                                   fund manager. Managing assets in line
protect your pension as you come close to
                                                   with the index removes the risk associated
retirement. Currently this fund is fully
                                                   with some managers making poor
invested in long-term Eurozone
                                                   decisions.
government bonds and cash.

                                                            Indexed European Equity
       Consensus Fund                                       Fund
                                                   (High Risk, Volatility 6)
(High Risk, Volatility 5)
                                                   This fund concentrates on European
                                                   equities. The fund’s aim is to match the
This fund is Ireland’s most popular fund,
                                                   average return of all the shares that make
currently managing over ¤5.6 billion in
                                                   up the FTSE Europe Ex UK Index.
assets (as of July 2011). Its success is
based on an approach which combines the
wisdom of the main investment managers
in Ireland. The fund matches the
investments they make in shares, property,
bonds and cash. The Consensus Fund
aims to provide performance that is

                                              21
         Indexed Japanese Equity                    (REITs). REITs are an effective, low-cost

         Fund                                       way to invest in property. REITs generally

(High Risk, Volatility 6)                           contain borrowings of approximately 50%
                                                    (the amount can vary) and so are more
This fund concentrates on Japanese                  risky than investing in property, which
equities. The fund’s aim is to match the            does not have any borrowing associated
average return of all the shares that make          with it. The fund tracks the EPRA /
up the FTSE Japan Index.                            NAREIT Europe Ex UK Liquid 40 Index
                                                    which invests in listed property companies
        Indexed North American
                                                    across mainland Europe.
        Equity Fund
(High Risk, Volatility 6)
                                                             Indexed Irish Equity Fund
This fund concentrates on North American
equities. The fund’s aim is to match the            (High Risk, Volatility 7)
average return of all the shares that make
                                                    This fund concentrates on Irish equities. The
up the FTSE North America Index.
                                                    fund’s aim is to match the average return of
                                                    all the shares that make up the ISEQ Index.
        Indexed UK Equity Fund

(High Risk, Volatility 6)                                   Indexed Pacific Equity Fund

This fund concentrates on UK equities. The          (High Risk, Volatility 7)
fund’s aim is to match the average return of
                                                    This fund concentrates on Pacific equities,
all the shares that make up the FTSE
                                                    which includes countries such as Hong
UK Index.
                                                    Kong, South Korea and Australia. The

         Indexed European                           fund’s aim is to match the average return
         Property Shares Fund                       of all the shares that make up the FTSE
                                                    Pacific Ex Japan Index.
(High Risk, Volatility 7)


This fund invests in shares of European
property companies. The companies are all
structured as Real Estate Investment Trusts


                                               22
Important information about                         Currency
available funds                                     Funds that invest outside of the Eurozone
                                                    carry a risk related to currency. This is
This section gives you information about            because the funds are priced in euro but
                                                    the assets that are invested outside the
tax, currency, charges and important
                                                    Eurozone are valued in their local
information relating to investing in our
                                                    currency. This can increase or reduce your
funds.
                                                    returns depending upon how those local
                                                    currencies are performing compared to the
Delay periods                                       euro.
In certain circumstances we may need to
delay switches, withdrawals or transfers            For example, the Indexed UK Equity fund
out of a fund. The circumstances in which           aims to track the performance of the FTSE
we may delay a switch, withdrawal or                UK Index. These shares are bought in
transfer can include the following.                 pounds sterling. The value of the Indexed
• If a large number of customers want to            UK Equity Fund will be affected by how
                                                    the shares of the companies perform and
    take money out of the same fund at the
                                                    any movements in the euro and sterling
    same time
                                                    exchange rate. If, for example, there has
• If there are practical problems selling
                                                    been no change in the value of shares in
    the assets in which the fund invested           sterling, but sterling falls in value against
                                                    the euro, the Indexed UK Equity Fund
The amount then switched, withdrawn or              would fall in value. Obviously, in the same
transferred will be based on the value of           circumstances, a rise in the value of
the units at the end of the delay period.           sterling would result in an increase in the
                                                    value of the Indexed UK Equity Fund.
Reducing the value of the fund
When there are more customers moving                Warning: Clear PRSA may be
out of a fund than making new                       affected by changes in currency
investments in it, we may reduce the value          exchange rates.
of the units in the fund. This is to reflect
the percentage of the costs associated
with buying and selling the assets of the
fund. The reduction in the value of the
affected assets will be different for each
fund.
                                               23
Tax                                                  General Information
The personal income tax relief you may be            If you have chosen to invest in a fund that
entitled to is explained on page 2.                  invests in shares, the shares in that fund
                                                     may be used for the purpose of securities
Under current Irish tax rules, the growth of         lending which aims to earn an extra return
all pension funds, including PRSAs, is not           for the fund. Although this increases the
taxed until the benefits are taken.                  level of risk within a fund, it provides an
However, if your chosen fund invests in              opportunity to increase the return.
assets outside Ireland, the fund may have
to pay tax on these investments.                     We can change the range of funds we
                                                     offer, and we may decide to stop giving
We will take tax on income or profits if this        access to certain funds. In this case you
is necessary under the tax rules of the              can switch out of those funds into any
country the assets are held in. In some              other funds that are open at the time. We
instances, withholding tax or other taxes            may also restrict the option to switch to, or
may apply, depending on the tax rules of             invest top-up contributions in, any funds.
the country. We will take any tax due from           We will give you one month’s notice
the fund, and this is reflected in the               before we make this change.
returns of the fund.


If tax legislation and practice changes
during the term of your plan, we will
amend this in the fund value as a result.


This information is based on current tax
law (July 2011), which could change in the
future.




                                                24
4 Your options when you
  retire
             One of the benefits of Clear PRSA is that you will have a number of options
             when you retire, including taking part of your pension fund as a retirement lump
sum. You don’t need to decide now what you’re going to do, you can make your decisions
closer to retirement when you have a better idea of how you’d like to spend the money
you’ve built up.


                                                               Retirement lump Sum
                          Your
                       retirement                              You can take part of your pension fund as a
                          fund
                                                               retirement lump sum. You may be able to
                                                               take some or all of this retirement lump sum
                       Retirement                              tax free.
                       lump sum

                                                               The amount you can take as a retirement
                                                               lump sum will depend on whether or not you
                  With the remaining
                       balance                                 are a member of an occupational pension
                (subject to meeting €119,800
                 AMRF/pension requirement,                     scheme.
                         If applicable)


                                                               •   If you are self-employed, or an employee
                                                                   but not a member of an occupational
    Buy a                                       Taxable
                      PRSA or ARF                                  pension scheme, you can take 25% of the
   pension                                     Cash Sum
                                                                   fund as a retirement lump sum.


                                                               • If you are a member of an occupational
                                                                   pension scheme and have contributed
                                                                   AVCs (Additional Voluntary
                                                                   Contributions), your PRSA will be a PRSA

                                                          25
    AVC and the retirement lump sum from              rate, the Universal Social Charge, PRSI (if
    your PRSA AVC will depend on how                  applicable) and any other taxes due at that
    you take your retirement lump sum from            time will also be deducted. Both the
    your occupational pension scheme.                 ¤200,000 and ¤575,000 limits include all
                                                      retirement lump sums you have received
If you take 25% of your occupational                  since 7 December 2005.
pension scheme as a retirement lump sum,
then you can also take 25% from your PRSA             After you’ve taken your retirement lump
AVC as a retirement lump sum.                         sum, you have three options.
                                                      A Buy a pension for life
Your other option is to take a maximum                B You can invest the rest of your fund; or
retirement lump sum between your                      C You can take as a taxable cash sum.
occupation pension scheme and PRSA AVC
of up to 150% your final salary. However,             We discuss these options as follows.
this depends on the length of time you have
actually been employed. If this is less than          A. Buying a pension
20 years, the retirement lump sum will be                for life
reduced.                                              You can use the rest of the fund if any to buy
                                                      a pension (in other words, a regular income
Let’s take an example:                                which will be paid for the rest of your life).
If your employer’s scheme provides you                Usually, this means that you pay your
with 100% of your final salary as a retirement        pension fund over to us (or another
lump sum, you can use your PRSA AVC to                insurance company if you’d prefer) and we’ll
provide the other 50%, as long as you have            guarantee to pay you a regular amount
the number of years service to allow this.            every month while you’re still alive.


The maximum tax free retirement lump sum              You can also choose other options, for
you can receive is ¤200,000. Retirement               example having the income increase each
lump sums between ¤200,000 and                        year, or having part of it paid to your
¤575,000 will be subject to standard rate             spouse, civil partner or dependent after
income tax (20% as at July 2011). Any                 you’ve died. You don’t have to make any
retirement lump sum greater than ¤575,000             of these decisions until you actually retire.
will be taxed at your marginal income tax             If, when you retire, you do decide to buy

                                                 26
an annuity, the pension is treated as                your pension fund in your Clear PRSA. It will
normal income so you will have to pay                be treated as if it is an Approved Retirement
income tax and any other taxes due at that           Fund (ARF). Leaving your fund in your Clear
time. Also, because it is a pension for you,         PRSA allows you to do the following:
you cannot cash it in, change it to a lump
sum, or transfer it to someone else in the           • Decide where you want to invest your
future.                                                 money.
                                                     • Make withdrawals from your fund as
If you are a member of an occupational                  and when you need them. (In fact, you
pension scheme and you have paid AVCs                   could take all your fund as cash if
into a PRSA, there may be limits on the                 you’d like. However, you will have to
maximum pension allowed. For more                       pay income tax, the Universal Social
information please read our ‘Additional                 Charge, PRSI (if applicable) and any
Voluntary Contributions and your Personal               other charges or levies (tax) due at the
Retirement Savings Account’ booklet.                    time on any withdrawals you make).
                                                     • Use your fund to buy an annuity later
                                                        on, rather than when you retire or
B. You can invest the                                   transfer to a separate ARF.
   rest of your fund
After taking your retirement lump sum,
                                                     Minimum amount in your Clear PRSA
you can continue to invest the rest of your
                                                     If you do not have a guaranteed pension
pension in a fund that you can manage and
                                                     income for life of at least ¤18,000 a year
control during your lifetime, and then
                                                     when you retire, you must keep at least
leave to your family when you die.
                                                     ¤119,800 in your PRSA. Your fund stays
Depending on your circumstances, you
                                                     invested in your Clear PRSA and will work
will have two options for investing your
                                                     the same as an ARF or an AMRF described
pension fund.
                                                     below but you may not have to take a
                                                     minimum regular income every year.
Option 1
Leave your funds in your Clear PRSA
                                                     At age 75 or when you meet the
If you can show that you are guaranteed to
                                                     guaranteed pension income for life
receive a pension income for life of at least
                                                     requirement (whichever happens first) this
¤18,000 a year, you can leave the rest of

                                                27
restriction stops. At this stage, you can          Approved Minimum Retirement Fund
take all of your money (as income) or leave        (AMRF)
it invested.                                       If you do not have a guaranteed pension
                                                   income for life of at least ¤18,000 a year
Warning: The income you get from                   when you retire, you must invest ¤119,800
this investment may go down as well                in an AMRF (or the rest of your fund if it is
as up.                                             less than this amount) or buy a pension
                                                   with the same amount. The main
                                                   difference between an AMRF and an ARF
Option 2                                           are the restrictions placed on withdrawing
Invest in an Approved Retirement Fund              your AMRF fund. You can withdraw any
(ARF)                                              gain you make within the AMRF over and
Instead of leaving your fund invested in           above the original amount you invest and
your PRSA, you can invest the rest of it in        will have to pay tax on any withdrawals
an ARF or Approved Minimum Retirement              you make.
Fund (AMRF) of your choice. Then you
can make withdrawals from your ARF                 However, until one of the following
when you need them. However, you will              happens (whichever is first) you cannot
have to pay tax on any withdrawals you             make withdrawals from the original
make. If you do not take an income, or             amount you invested.
take an income below a minimum level,
you will have to take a minimum regular            • You start receiving a guaranteed
income each December of 5% (July 2011)                 pension income for life from other
of the value of the ARF. You will have to              sources (currently ¤18,000 a year), or
pay tax on this income. You can still use          • You reach age 75.
your fund at any time to buy an annuity.
                                                   It is your responsibility to let us know if
                                                   your income changes.


                                                   Whether you decide to take money from
                                                   the fund within the PRSA or transfer to an
                                                   ARF, it is important to remember that the


                                              28
value of your fund may be reduced over
                                                   C. Taking your pension
time if the level of income is high and the
                                                      fund as taxable cash
investment return is not high enough to
                                                      sum
maintain this.
                                                   Before you can take this option, you need
                                                   to have a guaranteed pension income for
When you die, any money left in your fund
                                                   life of ¤18,000 a year or leave ¤119,800 in
will pass through your personal
                                                   your Clear PRSA or an AMRF. You will
representatives to your estate. Your
                                                   have to pay income tax at your highest rate
husband or wife may have the option of
                                                   on the cash lump sum along with any other
continuing to invest in a separate ARF.
                                                   taxes and levies due at that time.
Again, you can make all of these choices
when you retire (or when you are close to
                                                   The ¤18,000 guaranteed pension income
retiring), and your financial adviser can
                                                   for life and ¤119,800 AMRF limits are
help you decide what is best for you.
                                                   linked to the personal State Pension
What is most important is that you make
                                                   (Contributory) rate and are correct as of
sure you have a reasonable fund when you
                                                   July 2011.  If the State Pension
retire so you can make these choices. If
                                                   (Contributory) rate changes then these
you do not have a guaranteed pension
                                                   limits will also change. It is your
income that will maintain your current
                                                   responsibility to let us know if your income
standard of living during retirement, we
                                                   changes.
recommend that you think about buying a
pension before choosing to draw an
income from your Clear PRSA or invest in
an ARF. All of these options and limits are
based on current laws and regulations,
which could change in the future.




                                              29
5 Great service

                                                 • Every six months we will send you a
         We have developed a great                  statement of account and an
        range of online services which              investment report. These will let you
   will help you keep up to date, day or            know how your PRSA is doing and
   night, with how your plan is                     show:
   performing. Why not check it out by              • what you’ve paid;
   logging on to www.irishlife.ie. If you           • what it’s worth; and
   prefer, you can call our Customer                • how the funds have done.
   Information Line on 01 704 1111.
   The choice is yours, depending on             Once a year we’ll also send you a more
   the services you want.                        detailed statement (called a ‘Statement of
                                                 Reasonable Projection’) to help you review
                                                 your plan.
How will I know how my
Clear PRSA is doing?                             • If you need to talk to us, we’re here to
As a Clear PRSA is a major long-term                answer questions about your plan. Just
investment, we make sure that we keep               phone 01 704 1010 from 8am to 8pm
you informed about your Clear PRSA and              Monday to Thursday, 10am to 6pm on
how it’s doing so that you can review it            Fridays, or from 9am to 1pm on
regularly. We’re here to give you the               Saturdays. If you want advice about
information you need when you need it.              your pension planning arrangements,
                                                    you can also talk to your financial
• You can phone our dedicated line all              adviser.
   day, seven days a week to check the
   value of your PRSA plan. The number              In the interest of customer service we
   is 01 704 1111.                                  will record and monitor calls.



                                            30
                                                    Phone                 Online
                                                  01 704 111           www.irishlife.ie

 Up-to-date investment values                         4                        4

 Projected values                                                              4
Services available 24 hours a day, seven
days a week and fund performance
 Fund prices                                                                   4

 Switch between funds                                                          4

 Weekly investment market update                      4                        4

 Change your PIN                                      4                        4

 Customer Service forms                                                        4


 If your financial circumstances change please contact your financial adviser who will talk
 you through your options.




                                             31
6 Your questions answered

Am I eligible to take out                         What payment options
this plan?                                        do I have?
You can take out this plan if:
                                                  You can choose between making regular
You are a resident (you live permanently)
                                                  contributions, adding a one-off lump sum
in Ireland and you are between the ages of
                                                  at any stage or paying contributions
18 and 75; and
                                                  separately. Most people tend to pay
• you are self-employed or in a job
                                                  regularly. You can pay:
   which is non-pensionable; or
                                                  • regular contributions by direct debit
• you are a member of an occupational
                                                     (every month, every three months,
   pension scheme and want to pay AVCs
                                                     every six months or every year);
   into a PRSA to boost your retirement
                                                  • one-off contributions by cheque; and
   benefits (see note 1); or
                                                  • if you are an employee, by having your
• you are unemployed.
                                                     contributions taken from your salary. If
                                                     you are not in an occupational scheme
          Note 1. If you plan to pay                 at work, any employer contributions
          AVCs into your Clear PRSA,                 will be added to your personal
we recommend you also read our guide                 contributions. If you start your PRSA
called ‘AVCs and your PRSA - A guide                 by paying one-off contributions, you
for members of Occupational Pension                  will not be able to pay regular
Schemes’. Certain restrictions apply and             contributions into that PRSA.
we outline these in the guide. You
cannot pay AVCs into defined – benefit            If you are a member of an occupational
occupational pension schemes through              pension scheme at work, it is not possible
your Irish Life Clear PRSA plan.                  for your employer to contribute to your
                                                  PRSA as contributions can only be paid by
                                                  you as AVCs.
                                             32
Can my employer take                                  What is the minimum
contributions from my                                 amount I can contribute?
salary?                                               The minimum amount you can contribute by

Yes. Your employer can take contributions             direct debit is ¤300 a year.

from your salary whenever you are paid.
                                                      What is the maximum
This could be every week, two weeks or
                                                      amount I can contribute?
month. We will then take this contribution
                                                      You can contribute regularly into your plan
from your employer's bank account. Your               up to the following limits.
plan will be a monthly-paid plan and we will          • ¤5,000 if you pay it each month;
collect contributions from your employer              • ¤7,500 if you pay it every three months;
every month.                                          • ¤15,000 if you pay every six months; or
                                                      • ¤30,000 if you pay it each year.

For example, if you are paid weekly and
                                                      You can pay more than these amounts and
decide to make a regular contribution of
                                                      they will be treated as one-off contributions
¤60, we multiply ¤60 by 52 (weeks in a
                                                      each year. One-off contribution charges are
year) and divide it by 12 (months in a year).         shown on page 6. Please read page 2 to find
We will then set up your plan for ¤260                out the income tax relief limits.
every month. We will collect this from your
employer's bank account every month by                Can I change the amount I
direct debit. As a result, at certain times,          pay, or even stop paying
your employer may hold deductions from                for a while?
your payroll in their bank account for a short        If you want to, you can increase your
                                                      contributions, reduce your contributions or
period before they send them to us and we
                                                      take a break from making payments at any
invest them in your plan. We invest
                                                      time. Reducing your contribution could
contributions on the day we receive them.             change the entry charge relating to your
                                                      regular contribution.




                                                 33
Also, you should note that the estimated
                                                     Do my contributions
value of your pension fund, which we
include in the ‘Statement of Reasonable
                                                     increase with inflation?
                                                     When you take out your plan, you can
Projection’ of your welcome pack when you
take out your PRSA plan, is based on the             choose to have your contributions increase
contribution level that you agreed to pay            with inflation. If, like most people, you
when you started the plan.                           choose this option, your contribution will
                                                     increase each year in line with the Consumer
So if you reduce or stop your contributions,
                                                     Price Index (a measurement of inflation), or
it will reduce the value of your pension
                                                     by 5% if this is higher. If your employer takes
when you retire. If you are going to miss any
                                                     your contributions from your salary, this
contributions, you should contact your
financial adviser or our Customer Service            option is not available.
Team.
                                                     How do I get income tax
Can I transfer my existing                           relief on my Clear PRSA
pension funds into Clear                             contributions?
                                                     If we take your personal contributions from
PRSA?
                                                     your bank account, you can apply to your
You can transfer any existing pension funds
                                                     inspector of taxes to have your tax credits
from approved retirement annuity
                                                     adjusted to reflect your pension
contracts, PRSAs and occupational pension
                                                     contributions. If your contributions are paid
schemes into your PRSA. You can also
                                                     from your salary you will receive immediate
transfer funds from pension arrangements
                                                     income tax relief. Any employer
overseas. We will not add an entry charge
                                                     contributions will receive corporation tax
to that transfer contribution. You should
                                                     relief in the year the contribution was made.
think carefully about transferring funds
                                                     If you are self-employed, you must include
from one plan to another. Some restrictions
                                                     your pension contribution in your self
apply to transfers from occupational
                                                     assessment tax returns in order to get
pension schemes and arrangements from
                                                     income tax relief.
overseas.

                                                     Income tax relief is not available on net
                                                     relevant earnings which are more than
                                                     ¤115,000 including contributions to other


                                                34
approved pension arrangements (July
                                                        What is the minimum
2011).
                                                        term?
                                                        There is no minimum term on this Clear
For certain occupations you may get tax
                                                        PRSA plan.
relief of 30% of your earnings, no matter
how old you are. In general, these tend to
be professional sportspeople who earn their
                                                        Can I stop paying into my
income from that occupation.
                                                        plan?
                                                        If you decide to stop making contributions,
                                                        your pension fund stays invested and
Can I cancel my plan?
                                                        continues to grow tax-free. Obviously, the
If, after taking out this plan, you feel that it
                                                        value of your fund when you retire will be
is not suitable, you may cancel it by writing
                                                        lower at retirement than if you had
to us at: Irish Life Assurance plc, Lower
                                                        continued paying. Before stopping
Abbey Street, Dublin 1.
                                                        payments, you should be sure that you
                                                        have made other arrangements for your
If you do this within 30 days of the date
                                                        retirement. You should contact your
you receive your statement of reasonable
                                                        financial adviser for more details.
projection, we will cancel the plan. We will
refund any regular contributions you have               Is there any limit on the
made. We will refund any one-off                        size of my pension fund
contribution or transfers received less any             or my tax-free cash?
fall in value due to market conditions and              For tax purposes, the maximum pension
in line with Revenue rules. After the 30                fund you can have is ¤2,300,000 (July
days are over, you do not have the option               2011) from all sources. This is called the
to cancel your plan and get a refund if                 Standard Fund Threshold (SFT). If you
the plan is not suitable. You can stop                  have pension funds over this amount, you
contributing to your plan at any time, but              will be taxed at the higher rate for income
you will not usually be able to take the                tax (41% as at July 2011). This tax is taken

benefits from your plan before you reach                from the pension fund before your
                                                        retirement benefits are payable. You
age 60.
                                                        should contact your financial adviser for
                                                        more details.


                                                   35
You will have to pay standard rate income               If you choose to buy a pension for life, your
tax on any retirement lump sum between                  income will be taxed as income in the
¤200,000 and ¤575,000. Any amounts over                 normal way.
¤575,000 will be taxed at your marginal
income tax rate, the Universal  Social                  If you invest in an ARF or continue to invest
Charge, PRSI (if applicable) and any other
                                                        in your PRSA as an ARF, you will have to pay
charges and levies (tax) will be taken.
                                                        tax on any withdrawals that you make.

What is a Personal Fund                                 When is the earliest I can
Threshold?
If you have a Personal Fund Threshold
                                                        take my pension and do I
Certificate issued from the Revenue, your
                                                        have to retire?
                                                        If you are self-employed, you can take your
maximum pension fund at retirement may
                                                        benefits from age 60. You do not have to
be more than ¤2,300,000. You should
contact your financial adviser or Irish Life for        retire to take your pension benefits. Some

more details.                                           occupations, such as a pilot, fisherman,
                                                        jockey, professional rugby player and so on,

Do I have to pay tax on                                 allow you to retire earlier.

my pension?
                                                        If you are an employee and you are not a
We must pay benefits under this plan in line
                                                        member of an occupational pension
with current tax law. Any Government taxes
                                                        scheme, you can take your benefits at any
or levies will be collected by us and passed
                                                        time after your 50th birthday. If you do this
directly to the Revenue Commissioners.
                                                        between age 50 and 60, you must retire
Under current law, when you retire you can
                                                        from your job. If you take benefits from age
take some of the fund as a retirement lump
                                                        60, you do not have to retire and you can
sum tax free. We explain how much of a
                                                        continue to work while enjoying the
retirement lump sum you may be able to
                                                        benefits from your PRSA.
take tax-free on page 25. You will have a
number of options as to how you can use
                                                        If you are a member of an occupational
the rest of your pension fund. The tax you
                                                        pension scheme at work and have paid
pay will vary depending on which one you
                                                        AVCs into a PRSA, your retirement age
choose.                                                 must be the same as the retirement age


                                                   36
under your pension scheme at work. We               physical condition), you can take your
will pay benefits in line with your main            pension benefits immediately. However,
scheme. You will need the permission of             your pension may be low because your
the trustees of your work scheme to take            contributions are stopping at an earlier age
your benefits. This may mean that you will          and the pension will have to last longer as
need to retire so you can take benefits             you will be retiring earlier. If you retire early
before the scheme’s normal retirement               because of ill health, you must give us
age.                                                medical evidence to support this.


If you are sick, it is possible to take             The definition of ill health in Section 787k
benefits earlier than shown above. See              of the Taxes Consolidation Act 1997 is you
further on for more details.                        are “permanently incapable through
                                                    infirmity of mind or body of carrying out
What happens if I stop                              your own occupation your own occupation
working?                                            or any occupation of a of a similar nature
If you stop working but do not plan to              for which you are trained or fitted”.
begin taking benefits, you can either:
• stop contributing to the plan (perhaps            What happens if I leave
    until you start working again); or              employment?
• continue to contribute to the plan. If            If you are self-employed and paying into a
    you continue to contribute, income tax          Clear PRSA and then move into a job
    relief on the contributions may have to         which has a pension scheme, your
    be carried forward to when you have             contributions into your Clear PRSA should
    earnings in the future.                         either stop or become AVCs linked to your
                                                    main scheme. The way you make your
What happens if I have                              contributions could change (in other
to retire early because of                          words, from direct debit to your employer
ill health?                                         taking them from the payroll) and you
If you have to retire early because of ill          should contact your financial adviser or
health (that is, you are permanently unable         Irish Life.
to carry out your own occupation or any
occupation of a similar nature for which you        If you are employed in a job which does
are trained to do so because of a mental or         not have a pension scheme and then you
                                               37
become self-employed, you can continue               correct benefit to you when you retire.
your contributions as normal. If you move            Changing your job does not mean that you
into a job which has a pension scheme,               have to stop paying into your Clear PRSA. It
your contributions into your Clear PRSA              just means that you may have to change the
should either stop or become AVCs linked             way you pay your contributions and you
to your main scheme. The way you make                should let us know as soon as possible if
your contributions could change (for                 you change your job. There may be
example, from direct debit to your                   restrictions on paying AVCs into some
employer taking them from the payroll)               occupational pension schemes. These are
and you should contact your financial                outlined in the Irish Life Guide on AVCs.
adviser or Irish Life.
                                                     Can I take money out of
If you are a member of an occupational               my Clear PRSA?
pension scheme and are paying AVCs                   As discussed above, you can take your
into PRSAs but leave that job, your                  benefits when you retire, based on your
contributions can continue but they will             occupation. Generally this is from age 60.
become ‘ordinary’ contributions unless you           The exceptions are if:
join another job with a pension scheme. This         • your occupation is one that normally
may mean changing the way you make your                 has an earlier retirement age;
payment (for example, from your employer             • you have to retire early because of ill
taking payments from the payroll to direct              health; or
debit from your own bank account).                   • you are a member of an occupational
                                                        pension scheme at work and are
If you move from a job which has an                     paying AVCs into your Clear PRSA. If
occupational pension to another job with                this is the case, you have to take
an occupational pension, the payroll                    benefits at the same time.
system may change from your old
employer to a new employer. We can only              It may be possible to cash in the value of
do this if you let us know immediately               your plan if it is ¤650 or less and you have
about this change.                                   not paid contributions into your Clear
                                                     PRSA in the two years before you ask to
It is important that we keep a record of your        cash in. If the value of your fund is ¤650 or
employment history so we can pay out the             less and you do not pay any more
                                                38
contributions into it for two years, we can        wind the Clear PRSA up and pass the
ask you to transfer your fund to another           proceeds to your estate. If your estate has
approved pension scheme or start to pay            to pay income tax, we must take this
contributions again. We will tell you in           before paying the proceeds of your fund
writing about this. If we don’t hear back          to your estate. Tax law changes over time
from you within three months of this               and you should get independent tax
request, we could decide to automatically          advice on this.
refund the value to you.
                                                   Generally the amount paid out is treated as
What happens if I die                              income for the year of your death.
before starting to take
my benefits?                                       • If we transfer funds to an ARF in your
We will pay the value of your Clear PRSA              husband’s or wife’s name, they will not
to your estate. Your dependants may have              have to pay income tax. However, any
to pay inheritance tax depending on who               further withdrawals will be taxed.
inherits the fund. Tax law changes over
time and you should get independent tax            Can I move my money to
advice on this.                                    another provider?
                                                   You can transfer your plan to another
What happens if I die                              approved PRSA provider at any stage as
after starting to take my                          long as you have not started taking your
benefits?                                          benefits. You can also transfer your assets
If you have taken your retirement lump             to an approved occupational pension
sum, and you have decided to continue              scheme if you are a member of that
investing through your Clear PRSA as an            scheme and the trustees are willing to
Approved Retirement Fund (ARF), we will            allow this. You may also be able to make a
pay any value left in your Clear PRSA to           transfer to an approved pension
your estate. Your dependants may have to           arrangement outside the state.
pay tax, depending on who inherits the
funds.                                             We do not charge you for transferring out
If you leave the funds to your husband or          of the PRSA unless you are in a fund which
wife, we can transfer the funds to an ARF          restricts you from leaving before an agreed
in their name. In all other cases, we will         date. We may also set a delay period
                                              39
before a transfer can take place. You
                                                   Who should I talk to if I
should check with your financial adviser if
                                                   have any questions?
this applies to your chosen fund. Please
                                                   You should talk to your financial adviser or
also see the relevant fund description in
                                                   contact our Customer Service Team.
this booklet and your terms and conditions
                                                   Phone: 01 704 1010
document. These give you an idea of
                                                   8am to 8pm Monday to Thursday
whether these restrictions could apply.
                                                   10am to 6pm on Fridays
                                                   9am to 1pm on Saturdays
Family law and pensions
If you go through a separation or divorce,
                                                   Who should I talk to if I
a court application for a pension
                                                   have a complaint?
adjustment order (for the retirement or
                                                   If you believe that you have suffered a
death benefits we pay under this plan)
                                                   financial loss as a result of your Clear PRSA
may be made. You can get more
                                                   being poorly managed or if there is a
information on how a pension adjustment
                                                   dispute of fact or law, you should contact
order works from your solicitor or the
                                                   our Customer Service Team. As a PRSA
Pensions Board. If a pension adjustment
                                                   provider, we must set up an "internal
order has been granted on your plan, you
                                                   disputes resolution" procedure. You can
must let us know. You can get more
                                                   ask us for a copy of this at any time. After
information on how a pension adjustment
                                                   writing to us with your complaint, we will
order works from the Pensions Board at
                                                   make a decision on it and let you know. If
the following address:
                                                   you are unhappy with this decision, under
                                                   Part XI of the Pensions Act, 1990 as
   The Pensions Board
                                                   amended, you can take your complaint to
   Verschoyle House
                                                   the Pensions Ombudsman at the following
   28/30 Lower Mount Street
                                                   address.
   Dublin 2.
   Phone: 01 613 1900
                                                      The Office of the Pensions
   Fax: 01 631 8602
                                                      Ombudsman
                                                      36 Upper Mount Street
                                                      Dublin 2
                                                      Phone: 01 647 1650
                                                      Fax: 01 676 9577
                                              40
    Email: info@pensionsombudsman.ie
                                                  Who is my Clear PRSA
    Website: www.pensionsombudsman.ie
                                                  contract provided by?
                                                  Your contract is in the form of a plan and is
The Pensions Ombudsman will investigate
                                                  provided by Irish Life Assurance plc. It sets
the matter for you. Both you and we can
                                                  out the details of your contract with us.
appeal against their decision to the High
                                                  This booklet is only meant to be a guide to
Court. For more information on your
                                                  help you understand your PRSA and does
rights, please contact the Ombudsman's
                                                  not give all the details of your plan. These
office.
                                                  details will be in your plan schedule. We
                                                  will include more specific details and rules
If you have any other type of complaint,
                                                  in your terms and conditions booklet,
please contact our Customer Service
                                                  which you should also read carefully.
Team.
                                                  Your application form and plan will be your
                                                  legal contract with us. The contract will be
We will review your complaint and let you
                                                  governed by Irish law. The Irish courts are
know the outcome. If you are not satisfied
                                                  the only courts that are entitled to hear
with this, we will let you know where you
                                                  disagreements. The information in this
can go to take your complaint further.
                                                  booklet is based on our understanding of
                                                  current law, tax and Revenue practice as at
The Pensions Ombudsman does not
                                                  July 2011. Irish Life’s PRSAs are approved
investigate every customer complaint.
                                                  by the Pensions Board and the Revenue
Sometimes complaints are dealt with by
                                                  Commissioners. The approval number of
other industry regulators, such as the
                                                  your PRSA is APP/K/640/S.
Pensions Board, the Financial Regulator or
the Financial Services Ombudsman. Our
Customer Service Department can let you
know which regulator is most suitable for
your complaint. However, the decision as
to which office will deal with your
complaint lies only with that office.
If you have any other type of complaint,
please contact our Customer Service
Team.

                                             41
7 Glossary

Annuity / pension for life                        Additional voluntary contributions
When you retire, you can continue your            (AVCs)
PRSA or use your retirement fund to buy           Extra contributions you can pay into your
an annuity. This is a guaranteed income           PRSA to add to the pension benefits
from your pension fund after you retire.          already available from your company
This income is paid on a regular basis for        pension scheme.
the rest of your life.
                                                  Bonds
Approved retirement fund (ARF)                    A bond is a type of loan given to a
When you retire, you can continue your            company or a government. Say for
PRSA or you can invest your retirement            example a government wants to raise
fund into a personal investment account           money, they can issue a bond. If you loan
called an approved retirement fund. You           money to a government you get your
can withdraw money from the account               money back after the set timeframe and
when you need it.                                 you will also receive a fixed interest rate.


Approved minimum retirement fund                  Commodities
(AMRF)                                            Raw materials or basic agricultural
When you retire, if you do not have a             products that can be bought and sold in
guaranteed pension income for life of             recognised markets. Examples of
¤18,000 a year, and you are not buying an         commodities include oil, gas, gold, wheat
annuity, you must leave ¤119,800 invested         and cattle.
in your PRSA or invest this amount from
your pension fund into a personal                 Chosen retirement date
investment account called an AMRF.                The date you want to retire and take your
                                                  pension benefits.



                                             42
Consumer Price Index (CPI)                            Inflation
A measure that examines the change in                 The rate at which the general level of
prices of particular household goods and              prices for goods and services increases,
services, such as transport, food and                 and as a result, the buying power of
medical care.                                         money falls.


Equities/shares                                       Investment-grade
Investing in equities means investing in              When a bond is rated investment grade,
companies on the stock market, and the                the government that issued it (the bond
investor becomes a shareholder.                       issuer) is considered to be able to meet its
                                                      obligations, exposing investors to a
For the purpose of the funds that invest in           reduced level of risk. The grade a bond is
shares, as described in this booklet, we are          rated as is based on a number of criteria,
the investor and so the shareholder. How              including the likelihood that the bond
those companies perform affects whether               issuer will be able to pay interest and
the price of units in the fund rises or falls.        repay the amount you originally invested,
                                                      in full and on time.
Government bonds/gilts
Bonds issued by governments. These                    One-off contributions
governments regularly pay a fixed rate of             These are also known as single
interest for a set period of time, after              contributions, as these contributions are
which the initial investment is returned.             not paid into your PRSA plan on a regular
                                                      basis and can often be different amounts
Indexed fund                                          of money.
A fund that is index-linked, means it tracks
the performance of a particular stock-                Personal retirement savings account
market index, rather than investing in                (PRSA)
specific assets that the manager believes             Personal retirement savings accounts are a
will do better.                                       type of pension plan introduced in 2002.
                                                      PRSAs are available to everybody up to
                                                      the age of 75, whether they are employed,
                                                      self-employed, work at home or on a


                                                 43
temporary career break. They are                   Volatility
convenient, flexible pension plans that you        The potential ups and downs that a fund
can take with you if you move jobs.                may experience. The more volatile a fund
                                                   is, the more likely it is to experience ups
Return                                             and downs that could have a significant
Return means the money or the profit you           effect on the value of your retirement
make on an investment. However, if                 fund.
markets do not perform well, your return
could be less than the amount you
invested. In other words, return means the
profit or loss you make on your investment
over a period of time.


Regular contributions
Contributions you pay into your PRSA on a
regular basis (for example, every month or
every three months). These regular
contributions are usually a set amount of
money for a set period of time.


Securities lending
When an investment manager lends
securities owned by its clients to a third
party.


Unit-linked fund
A unit-linked fund combines your money
with money from other investors and buys
units in a fund. The number of units you
get depends on how much you invest and
the price of the units at the time you buy.




                                              44
                                                                                                                  171




                       Contact us
                       phone: 01 704 1010
                                 8am to 8pm Monday to Thursday
                                 10am to 6pm on Fridays
                                 9am to 1pm on Saturdays
                       fax:      01 704 1900
                       e-mail: customerservice@irishlife.ie
                       website: www.irishlife.ie                                                                                         PEFC/01-31-70
ILA 7652 (REV 07-11)




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                       write to: Irish Life Assurance plc, Lower Abbey Street, Dublin 1.                                        For more info: www.pefc.org



                       Irish Life Assurance plc is regulated by the Central Bank of Ireland. In the interest of customer service we will record and
                       monitor calls. Irish Life Assurance plc, Registered in Ireland number 152576, Vat number 9F55923G.
                       Irish Life Assurance plc, Registered in Ireland number 152576, Vat number 9F55923G

				
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