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Fees & charges

Entry fees, contribution charges or bid/offer spreads

Entry fees are normally expressed as a percentage of contributions (or transfers in), for example 2% of contributions. This would mean that for every €100 contributed, €98 will be invested in the pension arrangement.

If the pension arrangement uses pooled funds (which is normally the case for most pension schemes and personal pensions or PRSAs), there may be a difference between the offer price that the member can buy pooled fund units on a particular day, and the bid price at which the member can sell units on the same day. This is called a bid/offer spread, and it is another way that charges are expressed. For example, a fund could have an offer price of €1.00 per unit and a bid price of €0.98 per unit. This would equate to a 2% entry charge.

Some insurance companies give a higher allocation of units for larger schemes or larger contributions. This higher allocation helps to alleviate the entry fees. For example, an extra 1% allocation would effectively reduce a 2% entry charge or bid/offer spread to 1%.