DBs and AVC

Discussion in 'Pensions' started by Jordan Belfort, Jan 3, 2017.

  1. Jordan Belfort

    Jordan Belfort Registered User

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    11
    I have a DB pension and have been making AVCs the last 10 years. I had thought that I could retire a bit early and just draw the AVCs while keeping the DB as deferred, and index linked, until 65.

    However I'm told there is a requirement to start to draw down both at the same time.

    I don't want to take the DB early as it is prorated by about 4% PA before 65 and index linking stops once drawn down.

    Is there any obvious solutions to this ?

    Thanks
     
  2. Conan

    Conan Frequent Poster

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    594
    It is a Revenue rule that you must draw down any AVC fund at the same time that your main scheme benefits become payable. Assuming that both are linked to the same employment, you cannot draw down the AVC whilst leaving the DB deferred.
     
  3. Jordan Belfort

    Jordan Belfort Registered User

    Posts:
    11
    Thanks Conan.

    If I stopped making AVCs through the company scheme and set up my own PRSA for those contributions would it be possible to draw down the PRSA while leaving the company DB deferred ?

    Also if I left current company and moved the DC portion to new employer would it be possible to draw the DC while leaving the DB deferred ?
     
  4. SBarrett

    SBarrett Frequent Poster

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    2,162
    If you stopped the AVC's, you'd have to start up a PRSA AVC plan. Again, this is linked to the DB scheme that you have. There is no way to separate the AVC's from the main scheme in order to draw down one portion early. They both have to be done at the same time.


    Steven
    www.bluewaterfp.ie
     
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  5. Conan

    Conan Frequent Poster

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    594
    The only way to draw down a PRSA earlier than the main scheme benefit would be if you had a PRSA not linked to your main scheme employment. So if you had some self employed income (Schedule D Case 1 or 2 income) and you effected a PRSA in respect of that specific income.
    But if your only pensionable income is from the current employment then all benefits have to be taken at the same time.
     
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  6. SBarrett

    SBarrett Frequent Poster

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    2,162
    Even then, you have to maximise the tax relief available under the pension scheme for the employed income before you can make contributions for the self employed income.

    The Revenue cracked down on this a number of years ago, especially concerning medical consultants who had private and public income.


    Steven
    www.bluewaterfp.ie