avcs

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io62kg

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i am 60 years old and have a considerable sum invested in avcs. the avc fund is being wound up and i have been advised i have 4 options. (1) involves continued employment and i am unemoloyed. (2)transfer payment to a company recommended insurance company. (3)transfer payment to an alternative company. (4) transfer payment to to a PRSA. the default option is number 2. what are the risks and which looks the best and safest.
 
If I may re-phrase your question, you should be asking "Which is the best option for me?" All of these options have merits for different people. The choice between them depends on your particular circumstances and requirements. Your financial broker should go through all the options in detail with you, explaining each one. In particular, you should be considering: -

  • When do you intend/want to retire and/or draw on these funds?
  • Have you other pension entitlements?
  • How much risk are you willing to take, in return for the potential for extra return? (From your question, I'm guessing that you're looking for a low-risk option.)
  • There are two methods of calculating maximum tax-free cash at retirement from such a pension scheme. Both should be considered before deciding between PRSA and Buy-Out Bond.
  • What are the charges on the default option Buy-Out Bond (option 2)? Can they be improved elsewhere (option 3)?
  • What are the fund choices on Option 2? Do they suit your requirements?
All of the above should be considered before you're in a position to make an informed choice.

Liam D. Ferguson
 
thank you. i dont have a financial background so i will see a broker this week. in the meantime any information would be appreciated. (1) i assume i wont be able to draw on the funds until age 65 as theyare administered in conjunction with the main plan. (2) i paid into a company pension for 20 years. no early retirement accepted at this time. (3) low risk. (4) i dont understand. (5) the management charge is 0.75%p.a. i havent checked other companies. (6) there are 6 options ranging from technology, high risk, through multi asset medium, to cash low risk. the company supplied the application form for the buy out bond. if i use a financial broker will there be a further charge?.
 
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