QI is about to retire next year and I am thinking of buying a property with my PRSA (Individual Retirement Savings Account) pension fund, to use primarily for rental income. I don’t have enough in my pension so I want to top it up with a small mortgage. Is this possible with the new IORP pension rules?
a According to Glen Gougran, Head of Business Development at Independent Trustee Company (ITC), the implementation of IORP II (Institute for Professional Retirement Provision) has changed the landscape for pension asset investing. IOPR II is a European directive that seeks to enhance the governance and management of pension schemes.
The directive means that lending in pension is no longer acceptable and more than 50 per cent of pension cannot be invested in unregulated assets like property, Mr. Gaughran said. However, since the changes apply only to business or company pension plans, you can choose to invest in assets using your PRSA without any limits.
This also applies to the likes of buy-out bonds and ARFs. Property loans are typically arranged with the lender in conjunction with your financial and mortgage advisors. Pension lending is always granted on a limited recourse basis, which means the lender cannot pursue the assets of the trustees or pension plan member in case of default.
Only the purchased property can be used as security, with a maximum loan tenure of 15 years, Mr. Gauharan said. You mention that you are going to retire next year, so it is important to know that all debts must be paid off in full before retirement. He recommends that you talk about any investment decisions with your financial advisor.
Buying a property with your pension fund can be an attractive investment option because of favorable income tax rules on rental income and capital gains tax exemption on gains when the property is eventually sold.
QI recently did a minor de-case procedure to remove the skin tag. The consultant charged me a consultation fee and I also completed the claim form for my health insurance. Is this correct and will it be covered completely?
According to Dermot Goode of TotalHealthCover.ie, the outpatient fee is the standard consultation fee. So you were charged the right amount for the consultation, he said. But many minor surgeries are covered by your insurer because they are listed by insurers as approved day-case procedures. These are treated like a hospital or patient claim.
This means that you complete the claim form which is sent to the insurer and the insurer directly discharges the benefit to the hospital or consultant. Most plans cover these day-case procedures, subject to a small addition per claim, Mr. Goode said.
If you have a good corporate plan, you should be able to retrieve 50 pcs to 75 pcs of outpatient consultation fee without paying any extra to pay first.
You can usually ‘scan and send’ this to your insurer for an immediate refund and any portion that isn’t covered can be included in your year-end tax claim. If you do not have a good corporate plan with this outpatient benefit, make sure you do a thorough review of your cover before the next renewal date, he said.
QI is with the same car insurer for the last five years. My friends keep telling me that their premium has come down since they switched, but mine haven’t. I know I should probably change, but I still consider myself a pretty good deal. Is it worth the switch?
a There’s a clear message here – shopping is the only way to make sure you’re getting the best deal on motor insurance, said Jonathan Hehir, managing director of Insuremycars.ie.
You may have gotten the cheapest rate when you signed up with your current provider five years ago, but it’s highly unlikely that the company represents the best value for your policy needs now, he said. Told. If any life circumstances affecting your car insurance rates have changed during that time, there is a better chance of finding a lower cost rate with another provider.
For example, you might have bought a new car, had a designated driver on your policy, or moved home. Contact a reputable broker, as they will have the facility for you every year to scour the market and take advantage of offers and discounts among providers that may not usually be available directly to clients.