teachers and AVCs
I think this topic has started in the wrong place! You need to take one step back to consider all her options.
First of all she should only be considering AVCs if she has short service? Even if she has short service she has two options :
(1) Buy back service from Dept of Education. Effectively she can buy back the missing years at a fixed contribution level, which is very favourable. At 30 she can buy a missing year's service at a rate of 0.48% pa. Tax relief applies as for AVCs. Effectively she buys into a guaranteed 'real' investment return of about 2.5% pa and the State picks up the expenses...it's a very good deal. She would be buying a 'defined benefit' type AVC. She should ask Dept and Marsh about this first. Bear in mind Marsh get no financial reward in teacher signing up for buy back service with the Department, so their response to her will be interesting!
(2) Private Defined Contribution with AVCs. Here there are expense deductions borne by the teacher and there's no guaranteed investment return. This is the type of scheme being promoted by Marsh to TUI members.
You might be interested in looking at Commission On Pubic Service Pensions Report, November 2000, which (in Chapter 12 of Part IV) examines the public sector buy back option and the expenses involved in the alternative defined contribution private AVC schemes, such as the one being marketed by Marsh. The Consultants who did the analysis, on behalf of the commission, was Mercers who are part and parcel of the same group as Marsh! So their comments are interesting....their conclusion was ‘overall charges levied on public sector AVC schemes would appear to be higher than those charges in AVC schemes of typical private sector firms’ (Page 337 of Report)
You can download the part of the overall report which deals with public sector AVCs and service buy back from
www.finance.gov.ie/public...part-4.pdf .
Suggest your sister have this section of the report printed out and in her paw when the Marsh consultant comes calling. His or her reaction should be 'priceless'.