Employee scheme and AVCs to PRSA

ClubMan said:
No - you can only access the PRSA AVC when retiring from the employment and taking benefits from the main occupational scheme.
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You don't necessarily need to be retiring from the employment to take your benefits at Normal Retirement Age - that only applies to early retirements. But you do indeed need to take the AVCs or AVC PRSAs at the same time as the benefits from the main occupational pension scheme.
 
Just a quick hijack, i have a DB scheme with work and also contribute to a linked DC pension with avcs. I max out my contributions of 20% but using scheme rules this equates to approx 18k. By revenue for my age im allowed 23k tax free. Can i do lump sum of 5k each year into my dc pot that the company have set up or am i limited by my scheme rules of % of pensionable salary?
 
If you are saying that your age related revenue tax free yearly maximum is 23k, then you can do the 5k extra lump sum into your AVC pension policy tax free.

You can exceed the pension contributions rules of your employment scheme.
 
Cheers, yes im entitled to do 20% of 115k according to revenue but my scheme for avc contributions is based on my pensionable salary which is lower then my actual salary and results in approx 18k a year going into avcs.
Is the contributions i make to my DB scheme of 4.5% separate from revenue total of 20% avc contributions for my age?
 
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Ah didn't know db contributions were part of the 20% im allowed. I'm at 22.8k so won't be doing any lump sums so. Thanks
 
On a related question.... If a Local Authority (pre95) employee pays the following contributions towards a DB pension...
- superann = 5%
- spouse & child = 1.5%

At age 55-60, does this mean that any contributions to a PRSA AVC (personal, not via salary deductions) are limited to 35% - 5% - 1.5% = 28.5% ?

If the employee was to buyback service too would that also reduce the amount which could be put into a PRSA AVC so that the total of all pension contributions (superann, s&s, PRAS AVC, buyback amount) does not exceed 35% ?
 
redstar said:
At age 55-60, does this mean that any contributions to a PRSA AVC (personal, not via salary deductions) are limited to 35% - 5% - 1.5% = 28.5% ?
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28.5% is the remaining limit that will gain tax relief.
More contributions could be made but won't gain tax relief.
Tax relief could be claimed in a future year if the person did not use all their age related tax relief in any future years.
 
Damn just realised, I have been paying 20% avcs from my pensionable salary along with compulsory 4.5% to DB scheme. Does that mean I have been taxed at high rate on 4.5% of my avc contributions all along?
 
confused87 said:
Damn just realised, I have been paying 20% avcs from my pensionable salary along with compulsory 4.5% to DB scheme. Does that mean I have been taxed at high rate on 4.5% of my avc contributions all along?
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If you're aged 30-39 then the maximum amount of pension contributions that you can get tax relief on is 20%. In the year in which you turn 40 you can get relief on 25% for the full year no matter when your birthday falls in that year.
 
Looks like I have been overpaying 4.5% since 2022. Would revenue have taxed me or do I need to let them know now? I'm below 23k actual limit but above % for my age.
 
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Check back to see how much you have over contributed.
Revenue only calculate tax relief up to your age allowed limit, so no need to contact them.
Reduce your future AVCs and claim tax relief on any overpayments in the next few years.
If you have any non pensionable earnings these are also allowed when calculating your maximum age allowed yearly limit.
 
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Do you mean revenue only calculate say 30_39 age bracket is 20% of 115k which equals relief of 23k per year so unless I go over that they dont really care?
 
Revenue calculate 20% of your earned employment income.
20% of 115k is the maximum allowed, but this maximum only applies if your earned employment income is 115k or more per year.

If you make pension contributions over this amount you don't get tax relief on the excess amount, so it's not an issue for Revenue.
 
Yes I make over 115k, that's why I was aiming for 23k total contributions for my age..With my scheme however my pensionable salary is below 115k. Hence why I now know i was above % threshold for my age but just at 23k threshold for total if my pensionable salary was 115k or above. I was working off total 23k figure for 115k rather then % for my age.
 
confused87 said:
I was working off total 23k figure for 115k rather then % for my age.
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I don't understand what you mean but if you're earning more than €115K and are in the 30-39 age bracket (and don't turn 40 this year) then the maximum amount of pension contributions that you can get tax relief on is €115K x 20% = €23K.

Taxation of pensions

This page describe how pensions are taxed
www.revenue.ie
Tax relief is granted according to your age-related factor and subject to the earnings threshold of €115,000.
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The contributions the scheme puts in is % of my pensionable salary which doesn't include overtime and is salary minus 1.5times state pension. Maybe revenue only care about gross salary in eps statement so and in that case I'm entitled to put in full 23k.
 
I don't really understand the point(s) that you're trying to make but the relevant figure for pension contribution tax relief purposes is your gross for USC purposes on your balancing statement/statement of liability or €115K, whichever is lower. You can contribute your age related percentage of this and get full tax relief on it.
 
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