Once you’ve established that it’s PRSAs, and not occupational pension schemes, that are relevant to you, it’s then important to understand what a PRSA actually is.
A PRSA can be thought of as an account for the money that you’ve set aside for retirement.
When money is placed into the account, via ‘pension contributions’, that money is then invested in one or more ‘investment funds’ that are accessible via that particular PRSA.
Many individuals who have PRSAs aren’t aware that they have control over how their money is invested within the PRSA. When a PRSA is set up, you’re automatically assigned to the ‘default investment strategy’ of that PRSA unless you decide otherwise.
In other words, if you set up a PRSA and don’t actively choose where your money is invested, then the PRSA provider will just invest your money in the default option.
The default option is typically a ‘lifestyle strategy’ whereby the mix of assets that your money is invested in automatically changes over time as you approach retirement. While default investment strategies are certainly something to consider, it’s also important to consider actively managing your PRSA investments, in order to align them with your own personal retirement goals.