We provide Pension & AVC Advice for Teachers, Nurses, Doctors, Lecturers, An Gardaí, Defence Forces, County Council Employees all other public sector professions.
Additional Voluntary Contributions (AVC’s)
AVC’s are a simple and tax efficient way of saving for your retirement. They are extra contributions made to increase your pension. The main advantage of AVC’s is that the employee gets income tax relief on contributions into an AVC. The question that many people forget to ask themselves is, will I be faced with a tax bill on retirement? To get answers to this and any other questions you may have, talk to us.
Who can take out an AVC?
- An employee of an existing pension scheme.
- A member of their employer’s occupational pension scheme for retirement or death in service benefits.
- As the name implies, only the individual can pay an AVC. The individual’s employer can not contribute to an employee’s AVC. AVC benefits must be taken at the same time as the individual takes benefits from the employer’s main occupational pension scheme.
The main benefits of AVCs are:
- You can top you your employer’s retirement benefits as your own expense and have the benefit of income and tax relief, subject to certain restrictions.
- The AVCs may enable you to take a higher tax free lump sum at retirement, than provided by the employer’s scheme.
- The AVCs may enable you to retire earlier than if depending only on the employer’s scheme benefits.
- You can use your AVC to help fund your tax-free lump sum and by doing so will leave you with a larger regular pension from your defined benefit pension.
There is a risk that the consumer could get back less than the anticipated or targeted retirement benefits shown at the outset in return for the AVCs, funds may fail to keep pace with inflation, or the consumer may need access to the AVC funds, at a time and in circumstances in which he or she is not allowed access to the Plan.
Talk to us for more details on your pension and AVC arrangements.