Education Hub

Why do I need a Pension? 
Your pension may be your main income source once you retire so you should consider how your lifestyle may be impacted by a potential drop in income once you have retired. You can use our pension calculator to illustrate how much income you may get in retirement from your pension savings. Check out our blog post for more information.

Having your own pension plan is important as the maximum single Contributory State pension is currently €12,956.60 a year*.
You must also meet all the requirements to be eligible to receive the State pension. This State pension alone may not be enough to fund your lifestyle in retirement.

Check our our blog posts for more informaiton.

When is the best time to start a Pension? 
Its never too late to start a pension but the sooner you start saving the better. It means that you have more years of contributions and more time for the investment to grow.

As people are living longer, it's important to make sure you have an income to support you once you've retired.

*As at March 2019.

• It’s important to do your research to choose the pension and provider that’s right for you.
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• Check out our Pensions 101 section for all things pension-related.
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• Take a look at our Pension Myth-Busting blog
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• Try out our pensions calculator in app today to see how much your savings could be worth when you retire.

How do you calculate my projected monthly retirement income? 

We have estimated a projected future income based on all the information you provided including;

• How much you want to save,
• How frequently you plan on saving,
• Your chosen retirement age,
• Details of any existing pensions you told us about, like the type of pension, the value of the pension fund or expected income at retirement, and we include the expected future contributions to these arrangements as well.
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• Whether or not you included the State Pension

A full list of assumptions can be found at the bottom of the calculator page, titled 'Assumptions'.

Who can take out a PRSA? 
PRSAs are available to anyone resident in Ireland aged between 18 and 75 regardless of your occupation or employment status.

However, you can’t contribute to this PRSA product and an occupational pension scheme at the same time unless you have a separate source of earnings.
If you are not sure if this affects you, please call the KBC contact centre.

What do I need before I start?
You'll need your PPS number and your annual salary. If you know your tax rate, this will help us illustrate the potential tax savings to you should you contribute to a KBC PRSA.

You might also need details on any pensions you already have if you would like a more accurate illustration of your projected future retirement income. However, this is optional, and you can update this information at any time in the future.

What's the difference between the Lifestyle PRSA and the Lifestyle Extra PRSA? 
The Lifestyle PRSA is a standard PRSA, where no advice or assessment of suitability is provided to customers taking out the product. There is only one investment strategy, the default investment strategy. We have designed this PRSA to take the complexity away from saving for retirement. Charges are fixed at 2.5% per contribution, and fund management charge of 0.9% per year.

The Lifestyle Extra PRSA is a non-standard PRSA and is designed to offer customers some extra choice when it comes to their retirement planning. 

This plan has everything that the Lifestyle PRSA has, with the addition of some advice, fund choice for your contributions, and more information on funds for those customers that are interested in more detailed information.

There are additional questions and documents with this product, we assess your suitability for  the product and the various investment funds on offer and make a recommendation to you. Charges are 2.5% per contribution, and a fund management charge which ranges from 0.5% to 1.45%, depending on the investment strategy you have chosen.

Your KBC PRSA is flexible so you can increase, decrease, pause and resume your pension contributions whenever and however you want to suit your lifestyle.

Are there minimum and maximum limits to my contributions? 
The minimum regular contribution is €300 per year, or €25 per month. The minimum electronic transfer amount is €10.

There is no maximum limit on how much you can contribute, but there are limits to the amount of tax relief that can be claimed.

You should take care to ensure that any amount you propose to save into your KBC is affordable, and that it meets your needs in relation to providing a pension for your retirement.

Payments you make into your PRSA are tax deductible up to certain limits. This means you may be able to reduce the amount of income tax you are paying by contributing to a PRSA. You can check these limits in the Tax Relief section in our Pensions 101.

Note: contribution tax relief is not automatically guaranteed and is determined by the Revenue Commissioners, not KBC.

Keep track in real time
Check your pension fund value anytime.

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The Default Investment Strategy (DIS) for the KBC Lifestyle PRSA is MyAutoinvest from KBC. This strategy is designed for everyone but built for you. The strategy comprises of equities, bonds, and cash. MyAutoinvest from KBC gradually alters the composition of your investment allocation as you approach your chosen retirement age.

This means we reduce your exposure to more risky (but potentially higher performing) equities and increase your exposure to less risky assets (bonds and cash); we call this ‘de-risking’. De-risking accelerates once you reach 20 years to your chosen retirement age. In the last 5 years before your chosen retirement age, we move a portion of your pension savings from equities and bonds to cash so that you will have 25% of your KBC Lifestyle PRSA invested in cash funds at your chosen retirement age to facilitate a retirement lump sum of 25%.

The KBC Lifestyle Extra PRSA also offers MyAutoinvest, as well as our ExpertEase multi-asset funds. ExpertEase is a suite of balanced, multi-asset, multi-signal funds that automatically reduce exposure to downside risk when necessary, while also making the most of any opportunities to generate return, keeping you in your comfort zone no matter what the market conditions. There are six ExpertEase funds available, each offering a suitable balance of equity, bonds, cash and other assets. Our funds are continuously monitored and the asset may be subject to daily rebalancing.

Could I lose my pension if the market performs poorly?
A PRSA is a long-term investment, and the value of your KBC PRSA will fluctuate over time. You can monitor the performance of your PRSA from the KBC Mobile App. You will also receive a Statement of Account every six months which illustrates how your fund(s) have performed in the last six months.

Should you have any queries or concerns in relation to your fund performance, get in touch by calling 1800 51 52 53

When can I access my benefits?
With a PRSA it’s important to know you can’t access the money you put in until you reach your chosen retirement age (normally between age 60 and 75).

There are some exceptions to this for certain occupations, or for employees who are retiring from age 50.
You can change your chosen retirement age in-App if you wish. Please note that doing so may have an impact on your projected retirement income from your KBC PRSA.

I am approaching retirement, what should I do?
If you have not yet chosen what to do with your PRSA, please click the Call KBC icon, and a member of the Contact Centre team can set up an appointment for you with one of KBC's Financial Planning Advisers.
There are a number of options available to you and an adviser would be delighted to discuss these with you.

Early Retirement
If  you are an employee, it may be possible to take retirement benefits from age 50 provided that you have retired. If your occupation is one in which persons normally retire before the age of 60,    you may be able to take retirement benefits earlier than age 60, but no earlier than age 50.

Ill-health Retirement
In the unfortunate event that you become permanently incapable of carrying on your own occupation or any other occupation that you are trained or fitted for, you may be able to retire earlier than age 60 on ill-health grounds. Before you can claim ill-health retirement, you must provide us with appropriate satisfactory evidence that supports your ill-health claim. If you are deemed suitable for ill-health retirement, the retirement benefit options outlined above will also be available to you.

Death-in-Service Benefits
In the event of your death before retirement, we will pay the value of your policy to your estate.

You will have a choice as to the form in which your retirement benefits can be taken, and the different available options are described below
 

• Retirement Lump Sum: 
• Initially you may choose to take a retirement lump sum of up to 25% of the value of your PRSA. If your lump sum exceeds €200,000 but is less than €500,000 the additional amount will be taxed at 20%. Any balance beyond this shall be subject to tax at the marginal rate and USC.
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• Annuity: 
• You can use the remaining balance to purchase an annuity – an income for life. The retirement income you receive will be determined by how much you are willing to pay as well as your age and health status. This provides security and peace of mind so no matter how long you live to, you will always have a guaranteed income. 
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• Approved (Minimum) Retirement Fund: 
• An Approved Retirement Fund (ARF) allows your PRSA to remain invested while you can draw down money from as needed. If you’re under 75, you can’t transfer your fund to an ARF unless you have a minimum income of €12,700 per annum, including State pensions. If your annual income doesn’t reach this limit, you can either transfer €63,500 of your PRSA fund to an Approved Minimum Retirement Fund (AMRF), or purchase an annuity which will provide the minimum guaranteed income. You can withdraw up to 4% of the AMRF value per year. When you die, the remaining value of your AM(R)F is transferred to your dependents.
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• Taxable Lump Sum: 
• The remainder of the fund may be paid to the beneficiary (partially or in full) and subject to tax. You can only do so if you have a guaranteed minimum pension of at least €12,700 per annum. Otherwise you must invest €63,500 in an AMRF or an annuity, or a combination of both.
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• Vested PRSA: 
• You may leave the remainder of your fund invested in your PRSA. You must meet the guaranteed minimum income requirement (€12,700 per annum) in order to withdraw from a vested PRSA. If you haven’t transferred out the remainder of your fund upon reaching your 75th birthday, you will no longer be able to access your fund and it shall be transferred to your estate upon your death.
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• You will have a choice as to the form in which your retirement benefits can be taken, and the different available options are described below