AVC-HSE, I'll be short 8 years of a full 40 year service at the age of 65

cologneboy

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Hello there,

looked up most of the existing threads in relation to AVC's but still have some questions left unanswered which i'd like to get some ideas on.

I'm currently employed with the HSE, I'll be short 8 years of a full 40 year service at the age of 65. I'm considerng now to bridge that gap by way of AVC's. In addition I do have about 10 years of employment in Germany which will trigger, although small given the 10 years, a German pension at the age of 65.

Here are my questions:

1) Can I choose whatever AVC-PRSA provider of my choice or do I have to go with a particular one, chosen by the HSE (I'd like to go with Eagle Star)?

2) Will my German pension be taken into consideration in relation to the 3/4 of final salary rule as maximum for my pension?

3) Could I use my AVC-PRSA to fund a pension-mortgage and if so, who would be the most likely mortgage provider be?


Any advice/information appreciated!,

Thanks,
 
Re: AVC-how to go about it?

1) Can I choose whatever AVC-PRSA provider of my choice or do I have to go with a particular one, chosen by the HSE (I'd like to go with Eagle Star)?

2) Will my German pension be taken into consideration in relation to the 3/4 of final salary rule as maximum for my pension?

3) Could I use my AVC-PRSA to fund a pension-mortgage and if so, who would be the most likely mortgage provider be?
1) Yes - but you should also consider Notional Service purchase...there are a number of threads on AAM.

2) Yes - and it's 2/3. There is some scope, however, for funding beyond that level. This would include upgrading spouse's and children's pension to 100%, ahead of the 50% standard in the public service and Revenue recognising that commuting 1/6 of pension for a 3/2 lump sum is too large given the decline in annuity rates.

3) Sorry - know nothing much about pension mortgages.
 
Re: AVC-how to go about it?

(3) In relation to a pension mortgage, you could use any pension fund as security for a loan to buy property - that is really all a pension mortgage is, it is a way of using your pension fund as security to borrow...you would not be able to use your HSE pension fund as security because it is a DB arrangement...your AVC Fund (if you were to set one up) would need to have a projected value that would satisfy the bank that it would enable you to fund the capital repayment at its maturity.

Hope that helps.
 
Re: AVC-how to go about it?

Here are my questions:

1) Can I choose whatever AVC-PRSA provider of my choice or do I have to go with a particular one, chosen by the HSE (I'd like to go with Eagle Star)?

Is your job with the HSE your only job and does it provide an occupational pension? If the answer is yes to both of these questions then you may well be better off going with the HSE AVC scheme. The reason being that you would not receive any tax relief on contributions to a PRSA from another provider.

Tax relief on contributions to PRSAs are only allowed against earnings from a self employed trade/profession or from a job where there is no occupation pension scheme. There would however be tax/prsi/health levy relief on the AVC-PRSA provided by your employer, which could be up to 47% if you are a high rate tax payer.
 
Re: AVC-how to go about it?

Is your job with the HSE your only job and does it provide an occupational pension? If the answer is yes to both of these questions then you may well be better off going with the HSE AVC scheme. The reason being that you would not receive any tax relief on contributions to a PRSA from another provider.

You DO get tax relief on contributions to another provider. You can have only one PRSA AVC, however you can choose not to go with your employers AVC.

The drawback is that you will not get tax or PRSI relief at source (which you will get if you do it through your employer's scheme). The relief is got by reclaiming tax and PRSI from the Revenue, once you get your periodic certs from your provider.

The upside is that you can select from a wider range of options and also negotiate lower charges. My wife (teacher) pays 3% total p.a. in charges on her PRSA AVC - I don't know if the HSE provider is the same as the teacher's (Cornmarket) but the teacher's scheme carries total costs of 7% plus set-up (€835) or 'top up' (€417.5) charges. (See page 3 here: ).

Hope this helps a bit.
 
Re: AVC-how to go about it?

Thanks for all replies, much appreciated.
I've been in touch with my local supernnuation officer and received quote on buying notional service. This seems to me the way to go. That way I have a defined benefit in retirement which I consider low cost in comparison to other options.

Thanks again,
 
Re: AVC-how to go about it?

Hmm, that's not what it suggests here:

[broken link removed]

(Page 3, point 6)

The topic is less relevant now that Cologneboy has decided on another route.

The 2003 Revenue note says exactly as you say, however the Revenue have since clarified the position.

I've done a quick search of both the Revenue & Pensions Board websites and can't find the updates to support the fact that one CAN contribute to a stand alone AVC.

There are plenty of mesages on this site confirming that you can, as I said yesterday, my wife, a teacher, has one.
An article in the Sunday Business Post discussed the matter [broken link removed]
 
Re: AVC-how to go about it?

The topic is less relevant now that Cologneboy has decided on another route.

The 2003 Revenue note says exactly as you say, however the Revenue have since clarified the position.

I've done a quick search of both the Revenue & Pensions Board websites and can't find the updates to support the fact that one CAN contribute to a stand alone AVC.

There are plenty of mesages on this site confirming that you can, as I said yesterday, my wife, a teacher, has one.
An article in the Sunday Business Post discussed the matter [broken link removed]

Thanks for that, I was just going by the Revenue site and like yourself couldnt find out anything about standalone AVCs. Good to know though! Pity the Revenue & Pensions board don't keep this kind of info up to date, hey? :rolleyes:
 
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