Best approach for AVC's and a few other queries

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neo123

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A bit of background to set the scene. I've been getting various aspects of my finances in order over the past 12 months or so, and I'm finally getting around to considering the optimal approach to my pensions situation. Overall financial situation is healthy so there is capacity to contribute as much as is sensible to the pension.

Age: 41
DC Pot 1 = €100k
DC Pot 2 = €50k
DC Pot 3 = £40k/€50k - UK
DB Accrued to date = €6k pa from 65, and accruing another c€1k pa each year - This is in the Single Public Service Pension Scheme

1) Optimal way to do AVC's: My gross contributions to the pension each year are c€5k. My salary is c€100k (in case it's relevant I'm on 80% time of a full time €130k salary and may choose to go back to 100% at a future point). Based on this and my age there would seem to be considerable room for additional pension contributions. The simplest solution would seem to be to just go with the Cornmarket option doing annual single premium and the terms don't seem absolutely terrible (?). Is there any reason not to go this route, or a better option that would give more flexibility or choice at the point of retirement?

2) Should I bring the UK pension back to Ireland? This relates to an employment i had 15 years ago. My employer no longer exists, and it's with Hargreaves Lansdown. The charges are reasonably high (c1.25% pa). Is it worth the hassle of trying to transfer this back and perhaps combining into one of my other DC pots? I've seen numerous posts on here about maintaining separate pots can give additional flexibility and options at retirement. I expect there will be some level of awkwardness/hassle figuring out lump sums/income tax/etc which could be avoided perhaps if i moved it back.

3) Standard Fund Thresholds - My wife passed away at the start of this year, and as part of her death in service benefits I have an ARF of c€1m from which I do not currently draw an income. Am I correct in saying that this ARF is completely unrelated to the Standard Fund Threshold limits that would apply to me?
Assuming it is separate, the limits are very unlikely to come into play based on c€25kpa DB pension at 65, and the c€200k DC with growth to 65. But if the ARF was relevant here, then the limits could come into play, and affect my choices/capacity for AVC's I'm asking about above.

Any and all suggestions appreciated! Thanks
 
neo123 said:
The simplest solution would seem to be to just go with the Cornmarket option doing annual single premium and the terms don't seem absolutely terrible (?).
Click to expand...

Quick point.

In most unions, the Cornmarket contribution fees seem to be 0% on regular AVC premium, but 4% on single premium.

Something to watch out for.
 
neo123 said:
2) Should I bring the UK pension back to Ireland? This relates to an employment i had 15 years ago. My employer no longer exists, and it's with Hargreaves Lansdown. The charges are reasonably high (c1.25% pa). Is it worth the hassle of trying to transfer this back and perhaps combining into one of my other DC pots? I've seen numerous posts on here about maintaining separate pots can give additional flexibility and options at retirement. I expect there will be some level of awkwardness/hassle figuring out lump sums/income tax/etc which could be avoided perhaps if i moved it back.
Click to expand...

Whatever Irish pension arrangement you transfer it into must be approved by HMRC. The list is here. https://www.gov.uk/guidance/check-t...on-schemes-notification-list#countries-g-to-i

You could retain the flexibility you speak of by transferring to a Buy Out Bond / Personal Retirement Bond. Standard Life and Zurich Life have suitable products.
 
0.7% - 1.0% is what's quoted (all but one of the funds is either 0.70% or 0.75%). Seems to be done via Aviva and has limited enough fund options (c20) but it has enough options to choose something appropriate from a quick glance.
 
neo123 said:
0.7% - 1.0% is what's quoted (all but one of the funds is either 0.70% or 0.75%). Seems to be done via Aviva and has limited enough fund options (c20) but it has enough options to choose something appropriate from a quick glance.
Click to expand...

100% allocation and 0.7% to 1% AMC is pretty good, assuming that Cornmarket aren't charging any additional set-up fee.
 
neo123 said:
2) Should I bring the UK pension back to Ireland? This relates to an employment i had 15 years ago. My employer no longer exists, and it's with Hargreaves Lansdown. The charges are reasonably high (c1.25% pa). Is it worth the hassle of trying to transfer this back and perhaps combining into one of my other DC pots?
Click to expand...
You have 3 options - all reasonable depending on what you value most.

Do nothing
Leave your UK pension where it is. The 1.25% AMC hurts. But this is a tiny part of your €1.2m + DB pension total pension funds. So it doesn’t matter too much.

There’s also always the risk of the UK and/or Ireland changing the rules and making accessing UK pensions as an expat more difficult and/or more costly. But again, given how small this is compared to your overall pot…

And yes, there might be a bit more hassle sorting out the tax initially. But I can’t imagine that being too problematic.

Transfer to a UK-based International SIPP
Google names like MyExpatSIPP or Invinitive (just some of the providers out there).

An International SIPP is a UK pension plan designed specifically to for expats (because expats are no longer allowed to open regular SIPPs). Transferring should be fairly straightforward and you’ll be able to get a lower AMC. At retirement time, an ISIPP will make it easier to access you funds (e.g. paying in euros to an Irish bank account instead of requiring you to hold a UK bank account - but beware of the additional fees that may be incurred to avail of things like this).

Your pension will still be held in the UK in a UK pension fund however. So the risk of changes to the law still exists.

This option is almost a no-brainer (why pay more if you can pay less?) except for the fact that ISIPP providers seem to be little known entities and I’d be a bit worried about their ability to keep going for several decades (especially as this is a very niche market).

Transfer your pension to Ireland to a PRSA or Buy Out Bond
Check out my adventures doing just there here. I’ll keep updating that thread as I go.

As you can see, this is easily the highest-hassle, highest initial cost option. You’ll want to spend some time reading up on the stringent rules around it before even considering it.

In the end, you’ll end up with your pension in an Irish pension plan, hopefully with a lower AMC. That removes the risk of the UK/Irish laws changing around accessing a UK pension as an expat.

But the cost and hassle doesn’t seem justified in your case to be honest given the small relative amount of that pot.

You won’t be able to consolidate that pot with your Irish ones BTW. One of the many rules the UK imposes on pension transfers abroad is that the receiving scheme must not allow you to access your pension any earlier than you would have been allowed to in the UK.

The earliest you can access your private pension in the UK is 57 (as of 2028). In Ireland, it’s generally 50. So while your pension will end up in an Irish scheme, that scheme will have additional terms attached to ensure that you don’t access your pension before 57. It wouldn’t make any sense to put your other Irish pension pots in there.
 
Thanks for this really informative response.

I'm veering towards just leaving it where it is given it's relatively modest in the grand scheme of things. It's certainly of lesser importance that the other aspects i need to tackle. I'll certainly keep an eye on your progress though and see how much stress is involved in getting it over the line, and can reconsider at a future date.
 
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