AVC contributions after leaving company

[newirishman]

Changed job recently which had a pensions scheme. I did not maximise my pension contributions for this year (which would be 25% of 115K so EUR 28,750) whilst I was employed with that company - between employer contributions and AVC's it was around 16K.
Took a bit of a break, and new job only offers pension after 3 months which will be starting in 2022.

Question: Can I still add AVC's for the old pension scheme to maximise for 2021? Or would the plan be considered "closed" once I leave that employment? Or does it depend on the pension scheme?

 

[Gordon Gekko]

My understanding is that you can ask the trustees to accept the payment.

And if they say no, you can contribute to a PRSA.

But, for example, an old colleague of mine was allowed to do it.

 

[newirishman]

Thanks Gordon. I'll have a chat with the pension advisor so to see if the trustees would oblige.
Not sure if I want to setup a separate PRSA given the amount. OTOH, why give the taxman more than necessary.

EDIT: just heard back from the pension advisor. Apparently, it is a Revenue rule that you can't add AVC's once you have left employment. However, setting up an AVC PRSA seems to be straightforward and this can then be transferred into the pension plan of the new company.
Or alternatively, into a Personal Retirement Bond together with the pension pot of my previous employment.

 

[Steven Barrett]

Nope. You cannot make a pension contribution in respect of that employment once you have left.

A PRSA AVC is the same as an AVC.

You cannot transfer an AVC payment in respect of one employment into another pension scheme without transferring all the other benefits too.

If you make a contribution in respect of this employment, the revenue may not spot it but you are not entitled to make a contribution in respect of your earnings under your old company.

It is a stupid, unfair rule but it is the rule. And I am 100% sure about this.


Steven
www.bluewaterfp.ie

 

[newirishman]

Nope. You cannot make a pension contribution in respect of that employment once you have left.

A PRSA AVC is the same as an AVC.

You cannot transfer an AVC payment in respect of one employment into another pension scheme without transferring all the other benefits too.

If you make a contribution in respect of this employment, the revenue may not spot it but you are not entitled to make a contribution in respect of your earnings under your old company.

It is a stupid, unfair rule but it is the rule. And I am 100% sure about this.


Steven
www.bluewaterfp.ie

Thanks Steven, appreciate the confirmation. Strange rule indeed. I missed that the pension scheme in my new employment will only kick in in 2022, otherwise I'd have maximised the contributions before I left the old place!

Looking at the PRSA section on pension authority web site, I just need to find a PRSA provider so I can maximise my contributions for this year.
If i understand correctly I can then transfer this to another PRSA provider (for example, the pension scheme of the new employment) whenever I like.

 

[Steven Barrett]

Thanks Steven, appreciate the confirmation. Strange rule indeed. I missed that the pension scheme in my new employment will only kick in in 2022, otherwise I'd have maximised the contributions before I left the old place!

Looking at the PRSA section on pension authority web site, I just need to find a PRSA provider so I can maximise my contributions for this year.
If i understand correctly I can then transfer this to another PRSA provider (for example, the pension scheme of the new employment) whenever I like.

You can only make contributions in respect of the period in your new employer that you are not part of the pension scheme. The company probably has a provider or you can use one of the discount brokers available. When you join the scheme, you can transfer the benefits into the new scheme.


Steven
www.bluewaterfp.ie