Freezing AVC!

C

cord

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Hello All
I have searched for info' on what I'm about to ask but couldn't find anything! I am a public servant with an 8 year old AVC and I am strongly thinking of freezing it, and using the montly payements to purchase Notional Service. If I can freeze the AVC? what will I be annually charged to manage the frozen fund and would there be a charge to kickstart the fund again?. The NS montly payements are not cheap and as was pointed out, one doesn't see a growing fund, but I am buying in to a DB system.
Regards
 
Ongoing charges will depend on the terms of your avc contract. Dig it out or contact the provider. You should probably expect to pay an annual 1% of your fund.
 
Just to clarify, you are paying this annual management fee regardless of whether you 'freeze' the AVC or not, so it's not hugely relevant to the decision to switch from AVC to NSP. Freezing is probably the wrong way to thing about it - you would really be just stopping further payments to the AVC, and switching to the notional service purchase instead. Your broker should be able to give you projection of what benefit your AVC will give you (though there are many assumptions in this projection) and you can compare this to the benefit you'll get in the notional service purchase.
 
I have made some inquiries in this regard and have been strongly advised to purchase notional years rather than investing in AVCs - this is the way to go. I would stop paying AVCs immediately and instead put your money into NS - a much better option financially and one you will appreciate when you're drawing down your pension.
 
But don't you have to work until age 60 or age 65 if you purchase NSP, whereas with AVC's you retire when you want?
 
Paddylast said:
I have made some inquiries in this regard and have been strongly advised to purchase notional years rather than investing in AVCs - this is the way to go. I would stop paying AVCs immediately and instead put your money into NS - a much better option financially and one you will appreciate when you're drawing down your pension.
Click to expand...

Can i get the number of whoever ''strongly advised'' you NSPs are the way to go, they might be for you but depending on the circumstances of the individual they also might not be.
 
cord said:
Hello All
I have searched for info' on what I'm about to ask but couldn't find anything! I am a public servant with an 8 year old AVC and I am strongly thinking of freezing it, and using the montly payements to purchase Notional Service. If I can freeze the AVC? what will I be annually charged to manage the frozen fund and would there be a charge to kickstart the fund again?. The NS montly payements are not cheap and as was pointed out, one doesn't see a growing fund, but I am buying in to a DB system.
Regards
Click to expand...


Hi,

YOU AVC FUND CAN NOW ALSO BE USED TO BUY NSPS AT RETIREMENT IF YOU WANT TO GIVE YOUSELF ANOTHER OPTION.
The nsp can be expensive based on age now and years to retirement and are not flexible (cant stop or start when you want).
DB on nsps are only beneficial depending on how long you live into retirement.

ecdarg
 
There is a difference of €9000+ per year between lump sum and deduction purchase. I need 5 years which equals €45,000!! (All Gross). Also my 8 year old AVC has made just over €1500 (Payed in €34000, now valued at 35,500 and lets NOT mention that I have save on tax!!) So at present the jury is/are out as to which way to go. But I have 4 months to decide.
Regards
 
Hi Cord,

You can freeze your AVC. You will still incur a 1% (or thereabouts) annual management charge. But just check with your broker that you don't incur other charges such as "policy fees', or "maintenence charges".

Also, if you are in AVC scheme sponsored by your Union for more than 15 years, Revenue will not allow you to transfer funds to your PRSA AVC.

Auburn.
 
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