Contributions to Pension Plan in excess of tax relieved Value?

Conan said:
The typical Public Sector scheme for someone with full service provides :
- a pension of 50% of Salary, plus
- a lump sum of 150% of salary
Combined, that’s equivalent to a pension of 2/3rds of salary. If you have any non-pensionable income from the Public Service (overtime, allowances, BIK etc) you could fund benefits based on these through AVC’s.
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Thanks for that information . Would you know what happens to contributions that have been made to a fund where they shouldn’t have been made ( or at least not to the level that they were made ) . Presumably the income tax relieved would have to be repaid but when does this happen ? . Is it when the error is discovered or does it have to wait until retirement date ?
 
I would also be interested in how this works, when does the tax have to be repaid? Now or when drawing down my pension?

I feel from reading all the excellent threads that I may also be inadvertently oversubscribed in my PRSA AVC due to what now looks to be poor advice from my husbands accountant (he's self employed, I'm a HSE employee). I have ~5 years to retirement @ age 60, 'D' Class PRSI. I do have a rental property but my understanding is that this cannot be used to calculate my pension as it is ''unearned'' ( what a joke!).

I have been trying to get a projected pension from HSE superannuation for over a year at this stage but they are snowed under so nothing forthcoming...

What do I need to do now?
 
It's unlikely that you will owe any tax back.

You can make extra AVCs because the revenue allowable pension for a widow's or widowers pension is 50% of the workers wages. The public sector pension schemes only allow 25% pension for widow's or widowers pension. You would need a fund of several hundred thousand euro to fund for the shortfall of 25%. If your AVCs are less than that you will not be over funded. You can have your full pension benefits from your public sector scheme and any remaining AVCs can be used to purchase an ARF or Annuity.
 
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I thought the State Pension forms part of a public sector worker’s benefits, so you can fund for that also through AVCs, no?

e.g. someone’s on €100k, so with full service gets a pension of €50k, which includes the State Pension of €13k, so crudely speaking you can build an AVC pot of circa €400k to cover that.

Is that broadly correct?
 
Mr Black said:
I have been trying to get a projected pension from HSE superannuation for over a year at this stage but they are snowed under so nothing forthcoming...
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That's a disgrace, albeit unsurprising that the HSE's internal service delivery to staff is as inefficient as its core service to patients.

Anyway, it looks very likely that your husband's accountant has not got you involved in an over-funded situation.
 
Gordon Gekko said:
e.g. someone’s on €100k, so with full service gets a pension of €50k, which includes the State Pension of €13k,
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Strictly speaking for post-1995 entrants it doesn't "include" but rather it is "integrated". So the worker gets a notional 50% of final salary which is reduced by whatever the SPC entitlement is. So PS pension element plus SPC=50% of final salary.

On the tax treatment I assume only the PS pension element is considered.
 
Thanks for your replies everyone, I can exhale now as I thought I was facing an unexpected tax bill. My PRSA AVC is < €100K... As a 'D' Class PRSI (started work in 1990) my pension is not integrated with the state pension.
I will be short ~ 2 years full pension @ age 60 due to job sharing years ago.
My understanding of my PRSA AVC pot is that initially it is used to fund any shortfall in my allowable tax free lumpsum of 150% of final salary.
Then if the balance is used to purchase an Annuity or an ARF (as I can fund the additional 25% shortfall of the widower's pension, thanks @bstop) can the income from the ARF/ Annuity be drawn down in my lifetime or does the draw down have to wait until after I die, assuming my husband outlives me? We have no dependents.

Apologies if that is confusing, it reflects my mind at present thinking about pensions/finance. I have spent my working life caring for patients and my pension horizon is looming and I have limited knowledge as to how it all works..
 
You can drawdown from your ARF or Annuity as soon as you receive the benefits from your occupational pension. i.e. age 60.
If you opt for an ARF and start drawdowns at age 60 you would gain 6 years of paid S class Prsi contributions. These are reconable for the contributory state pension. If you have 260 paid contributions you can qualify for a pro rata contributory pension at age 66. If you have 520 paid contributions you can qualify for the normal contributory pension. You should check your Prsi record at welfare.ie as you probably have A class contributions for your period pre establishment. S class paid contributions can also allow.you to qualify for the Benefit payment for 65 year olds.
 
Apologies if I'm getting this wrong.......but I was under the impression that there was a time that if you opted for a Tax Free Lump Sum (TFLS) based on income and service, any residual AVCs needed to be used to purchase an annuity (in contrast to someone whose TFLS was based on 25% of his pension fund).

1. Was this the case?
2. Is it still the case?

As in - if it is still the case, then the post of @bstop is not quite accurate/complete?
 
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