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Personal retirement savings accounts (PRSAs)

Personal retirement savings accounts (PRSAs) are pension savings accounts, normally paid for by personal contributions, although employers can pay contributions to these plans. PRSA arrangements provide a tax-free lump sum, within certain limits, and a pension or other benefits at retirement. A PRSA is an individual defined contribution pension arrangement. The value of the ultimate benefits payable from the contract depends on the amount of contributions paid, the investment return achieved less any fees and charges, and the cost of buying the benefits.

PRSAs can be obtained directly from financial services companies such as life assurance companies that are registered PRSA providers and through financial advisers.

A PRSA is a contract between an individual and an authorised PRSA provider. There are two types of PRSA contract:

  • A standard PRSA is a contract that has a maximum charge of 5% on the contributions paid and 1% per year on the PRSA funds under management. Investments are only allowed in pooled funds which include unit trusts and life company unit funds.
  • A non-standard PRSA is a contract that does not have maximum limits on charges and/or allows investments in funds other than pooled funds.