Pension Advice - PRSA & Master Trust AMC Comparison
Hi Lads,
Just looking to get a sanity check on some financial calcs; if possible. The below have been done using AI and financials I will admit may not be my strongest suit, so a validation would be welcomed.
Currently I have a Master Trust Pension and I am weighing up the options of of either increasing contributions to this fund or opening up an execution only PRSA to avail of lower AMC fees.
I am interested in keeping the Master trust going with the advice that comes with it
There is an increase in fund value close to 950k , with a reduction of fees of approx 23k; I suspect something is not correct in the calcs.
Does the AMC have this much of a bearing on the fund ? I have often heard people saying they are expensive but not 100% if the calcs below are I would welcome a sanity check by somebody.
Assumptions in calculations
Current Fund Value = €150,000
Years until retirement = 22
Growth rate = 3%
Scenario 1
All contributions are paid to existing Master Trust in full to a total of 60k per year.
Yearly Contribution = €60000
Provider fees = 1.0%
Broker fee = 0.25%
Results Scenario 1
Projected fund at retirement €2,630,000
Total fees deducted €382,000
Product provider fees (1.0%) €305,600
Broker fees (0.25%) €76,400
Net growth rate used 1.75%
Scenario 2
Master Trust Contributions are kept at 30k per year and remaining 30k is used for an Execution only PRSA fund.
Master Trust
Yearly Contribution = €30,000
Provider fees = 1.0%
Broker fee = 0.25%
PRSA
Yearly Contribution = €30,000
Provider fees = 0.40%
Master Trust
30k Yearly deposits & 1.25% Fees
Projected fund at retirement €1,676,000
Total fees deducted €243,000
Product provider fees (1.0%) €194,000
Broker fees (0.25%) €49,000
Net growth rate used 1.75%
PRSA
30k Yearly deposits & 0.4% Fees
Projected fund at retirement €1,903,000
Total fees deducted €116,000
Product provider fees (0.40%) €116,000
Broker fees €0
Net growth rate used 2.60%
ResultsScenario 2
Item Value
Projected fund at retirement - Total €3,579,000
Total fees deducted - Total €359,000
Product provider fees - Total €310,000
Broker fees - Total €49,000
Results Scenario 1 – Scenario 2
Overall Value
Projected fund at retirement – Total €949,000
Total fees deducted - Total -€23,000
Product provider fees - Total €4,400
Broker fees - Total -€27,400