Additional Voluntary Contributions (AVCs)

Additional voluntary contributions (AVCs) are a tax efficient way for members of a group pension scheme to save for their retirement. They are extra contributions made by the group scheme member in order to provide better benefits when they retire. They are an excellent way to make full use of tax relief. They are very useful when it comes to topping up your pension if you find that there is a pension gap.

How flexible are AVCs?

AVCs are very user friendly. You can decide to contribute more, or less, or cease altogether as your circumstances alter.

Until 27th March 2016 you can withdraw up to 30% of the value of Additional Voluntary Contributions (AVCs) made to your occupational pension scheme and PRSAs. You should talk to one of our experts before doing so, in order to maximise the benefit to you.

Where can I find out more?

Please contact one of our experienced and qualified advisers to find out how AVCs can help you prepare for the future {KomentoDisable}

Mind the pension gap

Providing for my retirement years.

Current research shows that as a nation we are not investing enough in our pensions to adequately provide for our retirement.

With so much demands on our income, it is easy to put our future needs to one side and intend to sort it out later.

Well the time is now.

What steps should I take to help provide a pension for my retirement years?

First you should investigate all available ways of providing a secure income for your retirement years.                                                                                                                              

The main contenders are, personal pensions, executive pensions, PRSAs, AVCs, occupational pension schemes. These products do not suit everyone and you need to choose the one which is best for you.

To get a clear understanding of which option would suit your individual circumstances talk to one of our experienced and qualified advisors.

I have a pension, how can I check if I am saving enough for my retirement?

You can use our pension savings health check worksheet to see if you are on target.

Download our pension savings health check worksheet here>>

Or,

You can use our mind the gap calculator, provided by Aviva, below, remember to click back to this page when you have completed the calculations. {KomentoDisable}

 , For our mind the gap pension calculator Click here>>

What can I do to fix the gap in my pension funding?

If after taking the gap test, you find that there is a shortfall in savings for your future, don't worry, all is not lost.

The big plus is that you are aware of it now, and can take positive steps to fix it, before it is too late.

For more information read more>>

 Photo Andrew Gustar Some rights reserved                         

Pension arrangements generally allow you to transfer your pension benefits from one arrangement to another. The transfer rules depend on the arrangement you are transferring from and the arrangement you are transferring to.

Transfers Options

• Benefits from a PRSA can be transferred to another PRSA, to an occupational pension scheme or to an overseas arrangement.

• Benefits from a retirement annuity contract can be transferred to another RAC or to a PRSA.

• Benefits from an occupational scheme can be transferred to another occupational scheme, a PRSA, a buy-out bond (or personal retirement bond) with an insurance company, or an overseas pension arrangement.

The rules and restrictions that apply depend on the circumstances.

Q1. Can I transfer pension benefits from other sources into a PRSA?

The answer is yes and transfer values can be paid into a PRSA from 5 different sources:

1. From another PRSA

2. From a Personal Pension Plan

3. From an Occupational Pension Scheme in the State

4. A refund of personal contributions from an Occupational Pension Scheme in the State

5. From an Overseas pension arrangement

Q2. Can I transfer my PRSA benefits to another pension if I change jobs?

As a PRSA is essentially your personal pension plan, you can normally bring it from job to job and from employment to self-employment or vice versa which leaves this type of pension plan very flexible. You can also transfer your PRSA benefits to an occupational pension scheme or another PRSA without charge.

Q3. Can I transfer occupational pension scheme benefits to a PRSA?

You can only transfer your occupational pension scheme benefits to a PRSA if you have been a member of the scheme for 15 years or less and the scheme is being wound up or you are changing job. You cannot transfer your occupational pension scheme benefits to a PRSA if you have been a member of the scheme for more than 15 years.

Note: If you have paid AVCs to an occupational pension scheme, those may be transferred to a PRSA and the above rules do not apply.

Preservation and Transfer of Benefits

There are specific rules about what happens if you leave the pension scheme for whatever reason, for example, if you change jobs or you become self-employed or retire early without a pension. Your benefits from the pension scheme may be preserved within the scheme or transferred to another scheme. If you have at least 2 years service, you are entitled to a preserved benefit if you leave before the normal retirement age. A preserved benefit means that you get a pension when you reach the scheme's normal retirement age. (Prior to 2 June 2002, 5 years service was needed to qualify for preservation).

Alternatively, you can ask the trustees to transfer your pension rights to a new pension scheme.

Can I transfer to an AMRF/ARF or take a taxable lump sum?

An ARF is a tax-free investment held in your own name and administered by an approved provider. A wide range of investment options exists. Any monies drawn from the fund, either capital drawdown or income, are fully taxable. The funds in the ARF belong to the individual and form part of the person’s estate.

These options are available if you:

• have AVCs in an occupational pension scheme and the rules of the plan permit these options; or

• are a member of a defined contribution scheme; or

• are a company director who controls more than 5% of the voting rights in your company.

In order to introduce an element of security in retirement, minimum retirement income requirements exist for those who choose to transfer to an ARF. If you are under 75, you are required to demonstrate a guaranteed income of one-and-a-half times the State pension (currently €18,000) per annum. This amount can include State pensions. If you are unable to meet this minimum, you must either transfer an amount equal to ten times the State pension (currently €119,800) to an Approved Minimum Retirement Fund (AMRF), or purchase an annuity which will bring up your level of guaranteed income to the minimum amount.

You should consider taking advice when considering your retirement options, especially where you are considering investing in an ARF/ AMRF. In practice with an ARF/AMRF you may be giving up a guaranteed income for your life and replacing it with an investment policy which, if you draw a regular income from it, could run out of money before your death. {KomentoDisable} 

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