My father is 65 in September. For the first time in his life, he was enrolled in a pension plan (group scheme) this year in March with the company paying 2.9% of his salary into it. Prior to this he was in the same job but classed as self-employed (fishing industry).
He intends to continue working for at least a year and probably two years more. He has now been offered the option of purchasing AVCs up to 40% of his salary (tax free) as I understand it. The financial adviser handling the scheme (underwritten by New Ireland) has advised him to avail of this up to the maximum amount and stated his scheme would be invested in a cash fund due to his age.
My question is if he bought €2000 per month of AVCs for two years (for the sake of simplicity) then should the fund be worth at least €24,000 + employer contribution for that period? The offer letter for AVCs gave an example with a higher total and stated something about assuming 6% growth per annum (not sure how this could be even hoped for in a cash fund given current rates)?
The financial adviser handling the group scheme on behalf of his employer has been quite evasive when answering questions and suggested that no sum is guaranteed...I would have thought that by definition the €24k +employer contribution in the example above would be safe along with small growth (given current rates) less any fees.
I am just a little concerned about the bona fides of this guy and whether it is worth my Dad pursuing this policy at his age despite the obvious benefit of being able to buy such a high amount of AVCs and the employer contribution?
Should fees in a group scheme be made available? Would the contributions paid generally go straight to New Ireland rather than this advisor/broker?
I would appreciate any advice and am happy to clarify anything if it helps as best I can.
Also, I think my Dad has a small retirement annuity with BOI and am wondering if this conflicts with a employer pension scheme at all etc?
This is causing him a lot of stress and though I have limited knowledge of some of it, I would like more clarity so he doesn't make a poor choice of get ripped off by fees or some unscrupulous "advisor".
Thanks in advance.
He intends to continue working for at least a year and probably two years more. He has now been offered the option of purchasing AVCs up to 40% of his salary (tax free) as I understand it. The financial adviser handling the scheme (underwritten by New Ireland) has advised him to avail of this up to the maximum amount and stated his scheme would be invested in a cash fund due to his age.
My question is if he bought €2000 per month of AVCs for two years (for the sake of simplicity) then should the fund be worth at least €24,000 + employer contribution for that period? The offer letter for AVCs gave an example with a higher total and stated something about assuming 6% growth per annum (not sure how this could be even hoped for in a cash fund given current rates)?
The financial adviser handling the group scheme on behalf of his employer has been quite evasive when answering questions and suggested that no sum is guaranteed...I would have thought that by definition the €24k +employer contribution in the example above would be safe along with small growth (given current rates) less any fees.
I am just a little concerned about the bona fides of this guy and whether it is worth my Dad pursuing this policy at his age despite the obvious benefit of being able to buy such a high amount of AVCs and the employer contribution?
Should fees in a group scheme be made available? Would the contributions paid generally go straight to New Ireland rather than this advisor/broker?
I would appreciate any advice and am happy to clarify anything if it helps as best I can.
Also, I think my Dad has a small retirement annuity with BOI and am wondering if this conflicts with a employer pension scheme at all etc?
This is causing him a lot of stress and though I have limited knowledge of some of it, I would like more clarity so he doesn't make a poor choice of get ripped off by fees or some unscrupulous "advisor".
Thanks in advance.