prsa /avc public servant

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Paddy2014

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Hi I have prsa/avc its 15 year term. I am in year 11. I will retire in 4 years time. My wife does not work. I will be on the lower rate of tax. It is small 30K ish when policy terminates.
My query is. I understand I will be allowed a certain amount when policy terminates.
Subject to my financial circumstances as outlined above , the balance then reverts to an ARF.
Now , is there any way of knowing (approximately) over what term this ARF typically lasts?

I will be approaching 60. I mean can the ARF extend to 5/10/15 years. I'm thinking if its stretched out too far ...I may not be here to avail of it (small and all as it is)

is the policy company obliged to tell you. All I get is....depends on your circumstances at the time the policy terminates ...... no help

THks
Paddy
 
If your AVC fund will be circa 30k I would suggest that you check to see whether your main scheme is giving you the maximum tax-free lump sum on retirement. As a public servant I assume you will get a pension and a lump sum. If the scheme lump sum is less that the Revenue maximum then you should use the AVC fund to bridge the gap. Maximising your tax-free lump sum is the most tax effective.
If there are any funds remaining then you can either:
- take it as taxable income, or
- invest it into an ARF, from which you must draw down a minimum of 4% pa.
How long the ARF last depends on what investment growth you get and how much you draw down each year. On your death, your spouse can take over the ARF and on the death of both of you any funds can pass to children.
 
Thanks a mill. Yes you are correct will get lump sum @ pension (half work pay / taxable etc) I wonder what is the " maximum tax free lump sum " figure!? I really wanted to take the max (all if poss ! I know you can't) rather than the ARF. When you say take it as taxable income ... One wouldn't do that I suppose as it defeats the purpose of getting the tax relief in the first place thanks again for your interesting and knowledgable reply. Paddy
 
Paddy,
Subject to having completed at least 20 years service by retirement the Revenue max lump sum is 150% of a Final Salary. If the gap between what the Scheme pays and the revenue max is equal to or more than your AVC fund then you can take all the fund.
Final Salary can be defined as your total earnings in the last 12 months or averaged over any 3 consecutive years in the last 10 years.
 
Conan said:
Paddy,
Subject to having completed at least 20 years service by retirement the Revenue max lump sum is 150% of a Final Salary. If the gap between what the Scheme pays and the revenue max is equal to or more than your AVC fund then you can take all the fund.
Final Salary can be defined as your total earnings in the last 12 months or averaged over any 3 consecutive years in the last 10 years.
Click to expand...
Ah conan your brilliant thks a mill.
Paddy
 
just dug out some paperwork from my pension (Zurich PRSA/Avc) I see that they reckon it will be worth mid 30k in the end.
I found salary details also. I am in or around 61k /62k(gross) in the last few years , so I suppose with the "rises" coming , could be
in or around 65K gross when I could retire year in 4 years time or so. So Conan , Revenue Max 150% (excess 20 yrs completed) Would that be a revenue max lump sum ...(maths not best subject) in or about 75K? (150%)

If I was to get (provisionally)the figure worked out by dept.( at pre retire course) 80k (described as "gratuity after deduction of outstanding superannuation scheme contributions) with 30k pension a year.

scheme paying 75K approx. (after deduction superannuation contribution)add my mid 30k(PRSA/AVC) making 105k .....based on these figures!
IM LOST lol. am I working this out anyway correctly?! thanks again for your assistance ...(I'm really wondering if I could get the figure as is in full -within the limits , would it be worth just leaving it till I retire and take it in full , and start some other policy for 5 years with the contributions I would have from stopping this policy)

thks Paddy
 
Paddy, In general, your lump sum from your employer will be 3/80 of final salary x no. of years service. E.G. if you have 30 yrs worked, €65k x 3/80 x 30 = 73,125. As max potential lump sum, 150% would be €65k x 1.5= 97,500, you could draw a potential max. €24,375 from your prsa. Substitute your actual service at retirement for the 30 used here. Slim
 
ah that's brill , slim. thank you. 24k so in that scenario I could take the full amount so , if I stopped shortly (when I get to in or around that figure)
I will then have availed of the tax relief available, and as I will be on the lower rate when I retire , and will avoid the ARF.
I can start some other short term savings for the next 3/4/5 years EG , Post office savings or similar...thks
 
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