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Compliance with the Act

In its statement (Statement) the Pensions Authority confirms that it has been made aware of a practice whereby PRSA providers are asking contributors to enter into additional contractual arrangements with third party service providers. The Statement confirms that any such additional contractual requirements are “not consistent with a compliant PRSA contract or product”.

The Pensions Authority goes on to confirm that any services relating to the processing of contributions and investments should be contained in the PRSA contract itself and suggests that separate arrangements with third parties are not permitted. It adds that any PRSA charges must include service provider charges and that such charges must be expressed in the PRSA contract and in line with the requirements of the Pensions Act 1990 (Act).

Q1 2021

The Statement confirms that the Pensions Authority will carry out a “compliance exercise” during the 1st quarter of 2021 to ascertain if providers are operating their PRSA in this manner. It adds that those providers found to be engaging in this practice may be subject to sanction and that it expects those providers that operate their PRSA in this manner to take immediate remedial action.

PRSA Charges

As well as the provider’s PRSA terms and conditions, a PRSA contract should include a fee schedule that provides full disclosure of all fees applicable to the product inclusive of any service provider fees. Standard PRSA fees are capped at a maximum of 5% on each contribution paid and a maximum annual fund management charge of 1%, which is based on the PRSA fund value. Charges that relate to Non-Standard PRSAs are not capped though they must be stated in percentage terms as well.

The Act states that charges applied under a PRSA contract must be calculated on one of the following bases:

  • As a percentage of each contribution, or

  • As a percentage of the value of the PRSA assets, or

  • As a percentage of each contribution and a percentage of the value of the PRSA assets

The Act does not make provision for any charges payable by contributor(s) outside of the terms of the PRSA contact itself.


The Pensions Authority notes, on its providers and products register, that there are 14 providers currently approved to provide PRSAs in Ireland.

Each of these PRSA providers should take note of the Statement and the Pensions Authority’s intentions for the 1st quarter 2021. PRSA procedures and packs should be reviewed now to establish whether any immediate remedial action needs to be taken on the basis that PRSA contributors are being asked to enter into parallel contractual arrangements with third party service providers.

A full product review should be undertaken by each of these providers on the PRSAs that they provide as the Q1 2021 compliance exercise is unlikely to be limited to a review of contractual arrangements with third party service providers. Given the limited time available any such review should commence as soon as possible.

For further information regarding PRSA compliance, contact a member of our Pensions team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

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