Nurse - Contributing to AVC with option to buy back years

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Dogwalker

Registered User
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Hi,

First time poster, I hope someone can advise me please.

I am a nurse with 23 years service, I'm 48 years old and would like to retire if at all possible at 60.

With that in mind, I have been contributing to an AVC and have approximately €13,000 in my AVC currently and have just recommenced contributions having paused them for a number of years.

So I understood I had a shortfall of 5 years roughly.

My local HR have advised me that I can have my training years (3.6 years) counted as service. To do this I will have to purchase them for €5300.

I have a number of options re purchase:

Use some of my AVC fund to cover the €5300 thereby reducing the AVC fund to less than €8000.

Leave the AVC fund as it is and pay the €5300 myself and claim the tax relief on it.

Any thoughts on what is the best value option for me? Any advice would be greatly appreciated.
 
It depends how much money you have generally.

If you’re swimming in cash outside of your AVC fund, there might be an argument for using that.

But if you’re tight for cash, use the AVC money.

Either way, you should do it; it’s a “no brainer”.
 
You can't withdraw funds from the AVC pre retirement, so how can funds in the AVC be used now to buyback years of service?
 
Protocol said:
You can't withdraw funds from the AVC pre retirement, so how can funds in the AVC be used now to buyback years of service?
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They’re not “withdrawn”. They’re tax-relieved pension monies which can be used to fund other tax-relievable pension benefits. I’ve seen it done on multiple occasions.
 
Really?

So if I have 10k in an Irish Life AVC, at age 40, I can direct IL to sell those shares/funds, and they will issue me with the funds, that I then use to pay the HSE to buyback years?
 
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Protocol said:
Really?

So if I have 10k in an Irish Life AVC, at age 40, I can direct IL to sell those shares/funds, and they will issue me with the funds, that I then use to pay the HSE to buyback years?
Click to expand...

No. What actually happens is that Irish Life and the HSE Superannuation people are put in touch with each other and Irish Life pay them directly.

It makes perfect sense really; there’s money in a pension pot which was subject to tax-relief and the age-related rules etc. And the individual has the opportunity to purchase service which is subject to tax-relief and the age-related rules. So logically the individual should be able to use the money in the pension pot to fund it.

But, aside from all of the above, I’ve actually done this.
 
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Folks,

Thank you very much for taking the time to respond to my post.

@Gordon Gekko, I'm not really flush with money right now so I'm going to contact my AVC Provider and ask them about the possibility of using the AVC fund to finance these 3.6 years. That's what it's there for after all, as you rightly point out.

I will be delighted if this is a runner as I am finding the job enjoyable but very physically and mentally demanding and I expect that to become more challenging as I get older. To retire at 60 would be a dream come true for me.

Thank you to all have posted here, what a great sharing community! :)
 
I bought back my student nurse years back in 2006, I paid the money directly to the hospital that I trained in it was about the same amount as above, when I went to claim tax relief I was informed I could not get any tax relief unless I returned to work for that same hospital, I wrote to the tax office and hospital at the time and never got any further, so I never get the tax relief, I never did understand this at the time ? and I was broke at the time :(
 
Dogwalker said:
I have a number of options re purchase:

Use some of my AVC fund to cover the €5300 thereby reducing the AVC fund to less than €8000.

Leave the AVC fund as it is and pay the €5300 myself and claim the tax relief on it.
Click to expand...

Would your HR allow you to do this by salary deduction? I have done this in the past. If so, you could either reduce your AVC amount or pause payments for whatever length of time the salary deduction takes. (Or leave the AVC as is, if you can afford it and the total combined amount remains within your age related limits).
 
Early Riser said:
Would your HR allow you to do this by salary deduction? I have done this in the past. If so, you could either reduce your AVC amount or pause payments for whatever length of time the salary deduction takes. (Or leave the AVC as is, if you can afford it and the total combined amount remains within your age related limits).
Click to expand...
Hi EarlyRiser

That was offered as an option. Unfortunately the repayment plan was only for 6 months ...that was too much for me...I couldn't afford to pay that amount of money over a 6 month period.
 
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