AVC on Full Pension

G

GingerH

Registered User
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I have a modest AVC which I purchased from about 2002 to 2010 when I intended to retire early when I was 60 and would not have been at the max pension. I am now approaching 60 and have changed plans and now intend to retire at 63 when I will have full pension. My main reason for changing plans is that it makes sense for me to stay on longer rather than my spouse who has a more limited pension outlook & I am enjoying my work.

I understand that it is not intended that you would have full pension and an AVC. Is this the case? If so what can I do about it.
 
You can use the AVCs to purchase an ARF or an Annuity in addition to your full pension. You might be able to gain an extra amount of tax free lump sum on top of the amount provided by your pension scheme.
 
S class said:
You might be able to gain an extra amount of tax free lump sum on top of the amount provided by your pension scheme.
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A I understand it she will have 40 years service at 63. If so, will get 120/80 of pensionable remuneration tax free from her main scheme, which is the max allowed. The only possibility to go above this is to build up more service. She could take an additional 3/120 tax free from an AVC for each additional year of service (up to a max of 15/120 for 5 years). At 65 she could take 6/120 of pensionable remuneration tax free.
 
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Non pensionable allowances can be used to gain extra tax free lump sum from AVCs
 
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Yes I will have 40 years equivalent at 63. I do not intend to stay on beyond that.

I am happy to proceed to a ARF/Annuity though the total amount is limited (I need to check but it is around €22,000 in total) but I had understood that it was not possible to do so on the basis the purpose of the AVC was to make up for a gap in your pension . Note it is a public service pension.
 
S class said:
It is possible to have an ARF or Annuity from AVCs in addition to full pension.
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I think this depends on the "full pension" provided by the particular scheme.

Public servants paying Class A PRSI have plenty of scope to top up their "full pension" from an AVC. However, this is very limited for those on modified PRSI as the "full pension" for a retiree with full service is 40/80 of pensionable remuneration as annual pension, plus 120/80 tax free lump ie, the maximum allowed by Revenue (plus survivor pension).

I take it from GingerH's post that she is likely to be on modified rate PRSI. If so, if she has service beyond the maximum 40 years she can top up the max allowable pension by 1/60 of pensionable remuneration for each additional year served up to 5 years. This equates to 3/120 tax free lump per additional year plus the equivalent of 1/80 annual pension per additional year (I don't know how the capitalization formula for this).
 
The AVCs can also be made to make up the shortfall in widows / widowers pension from the 50% allowed by the public sector scheme to the 100% allowed by revenue. At retirement these AVCs can be used to purchase an ARF or Annuity.
 
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