thanks for the advice.i appreciate itThere are a number of points to consider:
- Under Revenue rules, the max benefits you can get from an Occupational Pension (including any AVCs) is limited to
# a pension of 50% of final Salary , plus
# a lump sum of 150% of final Salary
- you are suggesting that that is what the Garda Scheme will provide. If strictly so, then you have no scope for AVCs.
However:
- the Revenue limits are based on Final Salary, which can include any non-pensionable income such as Allowances, overtime etc.
- so whilst your Occupational Pension benefits may be based on basic salary (is that correct?), you can invest AVCs to provide benefits based on other non-pensionable earnings
- clearly the most tax effective strategy would be to build up an AVC pot to equal 150% of any non-pensionable earnings, since you could take such as an additional tax free lump sum (based on current rules).
- any AVC fund in excess of the additional 150% would have to be used to generate a retirement income, and obviously such additional income might be taxable (depending on your overall income and tax thresholds at the time).
So if you expect to retire on “full benefits “ from the Garda Scheme and won’t have any non-pensionable income, then strictly speaking you cannot invest AVCs. But assuming you will have have some non-pensionable income, then that will allow scope for investing AVCs.
Perhaps you need to talk to whoever manages your AVC facility.
If the OP is 36 (based on username) and has 30 years service at 57 then that is a full* Garda pension of 50% of final value salary.So if you expect to retire on “full benefits “ from the Garda Schem
This statement is misleading.So if you expect to retire on “full benefits “ from the Garda Scheme and won’t have any non-pensionable income, then strictly speaking you cannot invest AVCs.
Hi Conan. sorry, I meant to ask about this. how does an avc give benefits in relation to non pensionable earnings? eg overtimethe Revenue limits are based on Final Salary, which can include any non-pensionable income such as Allowances, overtime etc.
- so whilst your Occupational Pension benefits may be based on basic salary (is that correct?), you can invest AVCs to provide benefits based on other non-pensionable earnings
Most DB schemes provide benefits (pension and lump sum) based on basic salary. But under Revenue rules, it is possible to calculate benefits on gross earnings (base salary plus any non-pensionable income). So if you have some non-pensionable earnings it is possible to use AVCs to fund benefits on such non-pensionable earnings.Hi Conan. sorry, I meant to ask about this. how does an avc give benefits in relation to non pensionable earnings? eg overtime
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?