Tax Relief & AVC's

I currently contribute 4% of my salary and my Employer contributes 4% to a Defined Contribution Pension scheme where I work. If I wish to increase my contributions to 15% (tax limit for my age), do I take the 4% my employer contributes into account. i.e. can I contribute a further 11% of my salary, or 7% to stay under the 15% threshold?

This has probably been answered elsewhere in the forum but I have been unable to find it.

thanks

7%.

For an occupational pension it would be 11%
I think Clubman's answer relates to PRSAs

Berni said:

For an occupational pension it would be 11%

Click to expand...

Are you sure about that? I was previously informed (by a multi-agency intermediary who I deal with) that the employee and employer contributions together must be at or below the relevant age related tax/PRSI/heath levy relief limit to maximise relief.

Oh - just remembered - my current scheme is a PRSA and not an occupational scheme!

Definitely 11% for occupational scheme.

If you don't still have the paperwork which accompanied the forms you originally filled out for the occupational scheme I would suggest asking your employer for another copy of them.

They contain/should contain a lot of valuable information on everything from who to contact should you ever wish to transfer your current pension to the exact steps for making additional AVCs and a million things in between (such as the options for your pension regarding risk/reward profiles). The details in this paperwork should be held safely as a pension is one of the largest (and possibly most important) saving investments any of us will ever make.

It'll also have direct numbers to contact staff of the pension administrator (not sure if thats the correct term, people within the company responsible for the running of your pension scheme) who will answer any/every question you may have regarding your pension in the future.

Maximum is 15% of gross gross earnings, ie the amount you would have been paid before the 4% pension contribution. You can also count any BIK'able items and bonuses that are payable.

thanks folks

Snoop - bear in mind that you can also make a contribution for the 2005 tax year up until 31st October 2006...that is assuming you did not already maximise your contributions in 2005.