INSU07028 2022 QFA Pensions - Theory

Identify the regulatory bodies involved in the regulation of pension arrangements and their roles, and interpret the obligations they place on pension arrangements.

Appraise the pensions and other benefits provided by the States Social Insurance system and the States Social Assistance system.

Evaluate investment linked pension policies, including retirement annuity contracts, PRSAs, employer pension schemes (including small self-administered pension schemes (SSAPS), buy out bonds, AVCs, annuities, ARFs and AMRFs.

Assess the pension needs of consumers.

Evaluate personal taxation liabilities, including the taxation treatment of pension contributions and pension benefits; and

Calculate sums accumulated or discounted at compound interest and the impact of inflation over time on a consumer’s financial needs and resources.

This module is delivered with a blend of self-directed study supplemented by e-learning resources such as pre-recorded webinars and revision masterclasses. The teaching and learning modes will include:

Textbook

The Textbook is revised on an annual basis to reflect changes in legislation and regulation.  It is equivalent to the lecture notes students would receive in formal education institutions.

Revision Masterclass

Online lectures utilise lecture notes with extra reading material.  In these sessions real time practical examples will be used.  These classes provide the opportunity for the lecturer to maximise the use of formative assessment which helps the lecturer identify areas which the students are having difficulty with, so that adjustments can be made to the lecturing techniques, content of lessons and academic support.

In class discussion

Based on the theories/concepts underpinning business, in class discussion will be used to establish the level of understanding of the retail financial products.  Students will be encouraged to identify the application within their own place of employment and from the general business environment.

Self-Directed Questions

Self-Directed Questions will be used to determine their ability to review, fact-find and make recommendations while applying the knowledge they have acquired from the course textbook. 

Individual Work

Working as an individual will allow for the further development of self-discipline and enquiry.  

Personal Reflection

The personal reflection allows the student to look back over the learning experiences and identify areas for improvement and areas that worked well.

The assessment strategy for QFA Pensions is by way of a two-hour 100 multiple-choice question (MCQ) summative examination.

The repeat assessment will be 100% final examination.

The Need for Retirement Planning 1

• Main Types of Personal Financial Needs
• Different Pillars of Retirement Provision
• Tax Incentives for Private Retirement Provision

State Pensions

• Introduction
• Social Insurance
• Social Assistance Pensions
• Taxation

Personal Contracts

• Introduction
• Who can take out an RAC and a PRSA?
• Income Tax Relief
• Charges
• When Can Benefits be taken from an RAC or PRSA?
• How Can Benefits be taken from an RAC or PRSA?
• Provision of Information
• Cooling-Off Period
• Pension Term Assurance

Employer Pension Schemes

• Introduction
• Approval
• Who Can be Included?
• What Benefits Can a Scheme Provide?
• Charges
• When Can Retirement Benefits be taken from a Scheme?
• How Can Retirement Benefits be taken?
• Maximum Approvable Benefits
• Maximum Contributions to DC Schemes
• Tax Relief on Contributions
• Additional Voluntary Contributions (AVCs)
• Provision of Information
• Termination of Employment
• Public Service Retirement Benefits

Transfers

• Introduction
• Allowed Transfers
• Transfers not Allowed
• Potential Risks of Taking a Transfer Value
• Potential Benefits of Taking a Transfer Value

Investment

• Introduction
• Investment Asset Classes
• Collective Investment Funds
• Default Investment Strategy (DIS)
• Investment Restrictions
• With Profit System

Pension Adjustment Orders

• What is a Pension Adjustment Order?
• Earmarking Retirement Benefits
• Variation
• A Nil PAO
• Taking a Transfer Value
• Death Before Leaving Service or Retirement
• Death of PAO Beneficiary Before Getting Benefits
• Death in Service Benefits
• Lapsing of PAO
• ARFs and AMRFs

Taxation

• Income Tax
• Universal Social Charge (USC)
• Tax Calculation Example
• Income Tax Age Exemption Limit
• Chargeable Excess Tax

Annuities

• What is an Annuity?
• Annuity Rates
• Using Annuity Rates
• Open Market Annuity Option
• Guaranteed Minimum Annuity Rates
• ARF Purchasing an Annuity
• Taxation
• Benefits of Annuities
• Risks of Annuities

Approved Retirement Funds (ARF)

• What is an ARF?
• Qualifying Fund Managers (QFMs)
• Lifetime Withdrawals from ARF
• Taxation of Withdrawals
• Investment Returns
• Charges
• Death
• AMRFs
• Benefits of ARFs
• Risks of ARFs
• Transfers

Regulatory Bodies

• The Pensions Authority
• The Revenue Commissioners
• The Central Bank of Ireland
• The Society of Actuaries in Ireland
• The Financial Services and Pensions Ombudsman
• Whistleblowing

Inflation and Compound Interest

• Calculations and Projections
• Inflation and Deflation
• Real Returns
• Compound Interest

Comparing Options and Plans

• Introduction
• RACs or PRSAs?
• Retain a Preserved Benefit or Take a Transfer Value?
• Traditional Benefit or ARF Option?
• AMRF or Annuity?
• ARF or Annuity
• Comparing Similar Products

Providing Advice

• Personal Financial Needs
• Authorisation to Provide Advice
• The Financial Planning Advisory Process
• The Consumer Protection Code
• Quantifying the Retirement Funding Need
• Suitability
• Assessing a Consumer’s Attitude to and Capacity for Investment Risk
• Making a Recommendation
• Execution Only