AVCs Questions

C

Conscientious

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I sent below to my company's pension provider but I don't have high expectations of an answer never mind a quality answer...

I wish to make an AVC in respect of 2017 income. Previously I personally contributed 5% of my income through payroll, the company also matched this to 5%.


I’m in the 30 to 39 age bracket. Does the limit for tax relief include the employer contribution of 5%?


Also, I am self-employed for tax purposes as I also have non PAYE income. My net rental income for tax purposes in 2016 was €6,333 and you can assume similar for 2017. How does this affect my limit for AVCs?

Can anyone assist?
 
If it’s a standalone PRSA, it includes the employer 5% and if it’s an occupational/executive/DC scheme, it doesn’t.

The rental income is a red-herring; it doesn’t constitute relevant earnings for pension purposes.
 
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In making your AVC for last year, you have two choices: (1) make the AVC to the scheme's AVC facility. (2) Set up your own AVC PRSA with a PRSA provider of your own choice. Either one will give you precisely the same benefits / tax reliefs etc., so you should evaluate the two options considering...

  • the range of funds available from each and their suitability to your own needs.
  • the charges imposed by each. If it's a large group scheme, the charges may well be lower than an individual AVC PRSA due to "bulk buying" power. Or it might not. You'll need to ask.
 
I've learned my pension is an Occupational Pension and not a PRSA. Do I still have the option of setting up an AVC PRSA?

The Occupational Pension seems to have the advantage that employer contributions do not count towards reaching contribution limits for tax relief.
 
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