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Frequently asked questions

Last Updated: 29th January 2009

Where can I get independent advice?

Life and pensions brokers are set-up to advise you on the competing products available on the market. The main broker associations in the country are the Irish Brokers Association and the Professional Insurance Brokers Association. Their websites will give you a list of their members.

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How can I find out the current value of my pension / investment?

We can provide you with secure online access to the details of your policy. Among the details you can view is a daily updated value of the policy. Apply now for access.
We will also provide you with a yearly report telling you how your investment is performing together with a report on the funds in which you have invested.
The prices of all our funds are updated daily on our website and you can calculate the growth of these funds between two dates of your choice. The fund prices are also published each week in the national newspapers.

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What are the tax advantages of a pension or PRSA?

The great thing about saving for retirement is that the taxman gives you a really good deal.

• Your personal contributions into your retirement plan are not taxed. Table A sets out the limits, and Table B shows how you can reap the tax benefits of saving for retirement.
• The investment growth that your fund achieves is also free of tax.
• Although you do pay tax on your retirement income, you will:
  • get a tax-free lump sum that is 25% of your accumulated fund (if you have a personal pension or PRSA) or
  • a tax-free lump sum of up to 1.5 times your final salary (if you are in a company sponsored scheme)

Table A - Pension Contribution Limits

Age	Limits
Under 30 years	15% of net relevant earnings*
30 to 39 years	20% of net relevant earnings*
40 to 49 years	25% of net relevant earnings*
50 to 54 years	30% of net relevant earnings*
55 to 59 years	35% of net relevant earnings*
60 and over	40% of net relevant earnings*

* Subject to maximum earnings of €150,000 p.a. under current legislation.
** The 30% limit applies, regardless of age, to certain categories of person that typically retire earlier than usual, such as athletes, jockeys, etc.

Table B - Reaping the Tax Benefits

Pension Contribution	Per Month
Contribution	€200.00
Income tax relief @ 41%	€82.00
PRSI relief	€12.00
Net cost	€106.00

Note 1: If you pay income tax @ 20%, then you would receive income tax relief of €40 on every €200 contribution.
Note 2: If you are paying your contributions by salary deduction into a company scheme or you are contributing to a PRSA, you qualify for PRSI relief. The above example assumes you are paying PRSI @ 6% (including 2% health levy).
Note 3: If you pay PRSI @ 2%, then you would receive income tax relief of €4 on every €200 contribution.

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When should I start saving for retirement?

The longer you save, the larger your retirement fund could be and the more freedom you will have to do what you want. The earlier you start, the easier it is to fund for your target pension. Clearly, it makes a lot of sense to pay contributions for as long as possible. The following table shows the difference that delay can have.

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I am an employer. What are my responsibilities in terms of providing access to PRSAs to my employees?

Your obligations in relation to PRSAs are determined by whether you have ‘excluded employees’ or not. ‘Excluded employees’ are people in full-time, part-time, permanent or temporary employment where at least one of the following applies:

• No existing occupational pension scheme in place for relevant employees;
• A waiting period of more than six months before employees can join the occupational pension scheme; or
• No facility for employees to make Additional Voluntary Contributions (AVCs) to top up retirement benefits.

If you have ‘excluded employees’, since September 15th 2003, you are obliged to provide a payroll deduction facility on a ‘net pay’ basis in respect of at least one ‘Standard PRSA’.
As an employer, you may contribute to an employee's PRSA plan, but there is no obligation on you to do so.

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Can I make a partial encashment of my savings or investment policy?

You can encash part of your policy at any time provided the partial encashment is at least €1,000 and the residual value of your policy after partial encashment is greater than €2,500.The charge for a partial encashment is currently €20 and was last set on 1st January 2002. It is guaranteed not to increase by more than the increase in the Consumer Price Index since the charge was last set.

If you encash part of your policy before your policy is at least five years in force, an early encashment charge may also apply. The early encashment charge will be as follows:

Year 1: 5% of the partial encashment amount
Year 2: 4% of the partial encashment amount
Year 3: 3% of the partial encashment amount
Year 4: 2% of the partial encashment amount
Year 5: 1% of the partial encashment amount

If you choose to make a partial encashment out of the Eagle Star SuperCAPP fund, a Market Level Adjustment may be applied in order to protect the interests of all Eagle Star SuperCAPP fund investors.

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Can I switch the funds in which my policy is invested?

You can move your unit holdings among the different investment unit funds available. This gives you extra flexibility to change the return-risk profile of your investment as your needs change.

The first four switches you make in each policy year are free of charge. A charge will be made for each subsequent switch. This charge is currently €20 and was last set on 1st January 2002; it is guaranteed not to increase by more than the increase in the Consumer Price Index since the charge was last set.

If you choose to switch out of the SuperCAPP fund, a market level adjustment may be applied. There are also limits on the amount that may be switched into the SuperCAPP fund, in order to protect the interests of all SuperCAPP fund investors. These limits vary from time to time. Details of current limits are available from us on request.

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How are the investment gains on my savings/investment policy taxed?

Our investment funds are exempt from tax. As such, they are not subject to capital gains tax or income tax. This ensures the maximum possible growth for your investment premiums. Withholding taxes may, however, be deducted at source from dividends and other income arising from investments in certain countries in which the funds invest. In most cases, part or all of these withholding taxes can be reclaimed, but where they cannot, the income of the funds will be reduced by such taxes.

Tax is normally deducted on the relevant portion of the investment gain on death, encashment, partial encashment, assignment and on each eight-year anniversary of the policy inception. Tax deducted on the eight-year anniversary can be offset against tax on subsequent taxable events in relation to this policy. The rate of taxation is currently 26%.

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Why do I need Life cover or Serious Illness cover?

Sometimes it's easy to forget when building a career, a home and a family, how important it is to protect your family and business interests against the many ways they can be put at risk.

It is not pleasant to think about what would happen if you (or your partner) were to die or suffer a serious illness. Worse still, if one of your children were to suffer a serious illness or need to travel abroad for treatment, would you be in a position to cope financially?

If you are the sole earner in the household and were to die or suffer a serious illness, who would pay the mortgage and who would pay for your children's education? Who would provide for those special future events such as your son's or daughter's wedding? And of course, day-to-day bills, such as electricity, heating, transport, clothes and food, all need to be paid.

With life and serious illness cover, you can protect the well-being of your family and allow them to cope when you are not able to help them. Life and serious illness cover are essential elements of protecting the essence of your family or business.

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How much Life cover or Serious Illness cover do I need?

This depends on your own financial circumstances. A good basis to use is your current salary or earnings. The cover should be a multiple of this amount, taking into account the number of years your family or business will need your financial support.

Your financial advisor can help you to make these calculations.

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When should I take out life and serious illness cover?

It can make good sense to get insured as young as possible and while you are in good health. The cost of both life and serious illness cover rises as you get older. You also run the risk that your good health will decline as time goes by. It is important to understand that deteriorating health can result in significant loadings on your premium (i.e. higher premium), and in some cases, you may not be able to get cover at all.

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