Is AVC allowed?

B

Brianne

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If one is in a situation where one's occupational pension is 2/3 of final salary and there is no entitlement to state pension, is one allowed to have an AVC or PRSA and are there tax advantages that one could reap by starting same , approx twenty years from retirement?
Many thanks in advance.
 
Maximum allowed pension is 2/3 final salary, including indexation on pensions in payment, 100% pension to continue to spouse (if applicable) on death after retirement, indexation on spouse's pension, guaranteed minimum payment period of pensions up to 10 years whether you live or die. Final salary can include remuneration over and above your basic salary, e.g. bonuses, overtime, BIK etc.

In practice it is exceedingly rare for a pension scheme to be automatically funding for all of the above, so any gaps can usually be funded through AVCs or an AVC PRSA.
 
Many thanks for reply. Pension is unusual one, no longer in place for new employees. It's non contributory, no benefits for spouse, and is 2/3 of final salary. Obviously great for pensioner, but as there are no spousal benefits was wondering if the tax advantages of an AVC or PRSA and the savings advantages of a pension were available. Will probably have to discuss with revenue. From your reply, I think that the fact that the pension is 2/3 and is index linked means that one could have a pension but wouldn't get any tax reliefs normally associated with same.I'll check it out
 
If you have a spouse, you can make AVCs either through the scheme's AVC facility (if there is one) or your own choice of AVC PRSA, to fund for a spouse's pension. If the scheme doesn't take all of your income into account (e.g. bonuses, overtime, BIK etc.) you can also make AVCs to fund for the excess. Any such AVCs will qualify for tax relief at your highest rate.
 
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