Converting public service AVC to a PRSA

S

Scurnane

Registered User
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I have left the public service and can no longer contribute to the ps AVC scheme. Therefore I want to transfer the fund to my new private sector employer's defined contribution scheme.

However, the AVC fund manager insists I pay a 5% fee for converting the AVC to a PRSA before transferring.

Does this make sense and is the 5% considered appropriate?
 
Cornmarket?

Sounds scandalous to me but you'd need to take advice on whether this sort of gouging is standard in the industry.

The question I'd ask you, however, is why do you want to do this?

If you thought/were advised that that this AVC product was appropriate for you then what has changed? Why not leave the fund untouched until you retire? It's not as if your employer is likely to match your contribution if you put the AVC funds into your new scheme (which is the only benefit of a DC scheme) so leave it where it is and you'll have the benefit of diversity in your retirement funds.
 
oysterman said:
Cornmarket?

Sounds scandalous to me but you'd need to take advice on whether this sort of gouging is standard in the industry.

The question I'd ask you, however, is why do you want to do this?

If you thought/were advised that that this AVC product was appropriate for you then what has changed? Why not leave the fund untouched until you retire? It's not as if your employer is likely to match your contribution if you put the AVC funds into your new scheme (which is the only benefit of a DC scheme) so leave it where it is and you'll have the benefit of diversity in your retirement funds.
Click to expand...
Thanks oysterman,

Not cornmarket but another provider that specialises with the Defence Forces.

I highlighted about 12months ago that I may be leaving the PS and asked what my options were: the only one outlined to me was that my fund should be allowed to be transferred into my new employers scheme. Never stated that it could be left sitting as is, nor that there would be such a high fee for converting it.

I will look to keep it sitting as is. Thanks very much for the advice.
 
AVC's are tied to the employment scheme in which they were made. I am not aware of someone being able to transfer AVC benefits from one employer to another (I could be wrong but I have never come across this).

Or are they looking to transfer the benefits from the scheme AVC plan to a PRSA AVC plan in your own name?

Is 5% appropriate? It depends on how much 5% is and what they are doing in return for it. You can always offer to pay them a fee. If they refuse or you aren't happy with what they are offering for their fee, go elsewhere, there's 2,800 advisors out there.


Steven
www.bluewaterfp.ie
 
SBarrett said:
AVC's are tied to the employment scheme in which they were made. I am not aware of someone being able to transfer AVC benefits from one employer to another (I could be wrong but I have never come across this).

Or are they looking to transfer the benefits from the scheme AVC plan to a PRSA AVC plan in your own name?

Is 5% appropriate? It depends on how much 5% is and what they are doing in return for it. You can always offer to pay them a fee. If they refuse or you aren't happy with what they are offering for their fee, go elsewhere, there's 2,800 advisors out there.


Steven
Click to expand...
Thanks Steven,

Yes I believe that's what they are suggesting, converting the AVC to a PRSA so that I can then transfer it to my new employers' scheme. In this case, 5% is around €800.

When you say I can go elsewhere, I am in the process of leaving the PS employment and therefore they told me I can no longer contribute. I presume they are the only ones who can convert it from AVC to PRSA?

I think I will ask them to keep it as is for the moment (with no more additional contributions).

Thanks
 
Hi Scurnane

I don't think you can transfer it to your new employer. You can transfer it from your AVC to a PRSA AVC (which is an AVC in your own name, which you control). The value of this fund is linked to your job in the defence forces and must be drawn down when you draw down your defence forces pension.

When I say go elsewhere, use a different advisor.

Check with your old employer what the management charge is on the AVCs. They could be lower than the standard 1% that is charged on the PRSA AVC plan.

Steven
www.bluewaterfp.ie
 
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