PRSA v company pension

[marsbars]

Can anyone advise me on pensions? I want to increase my pension using AVC's. I can do this with my company pension. I also have about 18 months of a PRSA, I stopped contributing to about 2 years ago, built up. Is there any benefit in starting PRSA contributions again or should I just use the AVC's option with my company pension? Should I do both if this is possible?

Thanks in advance for any help.

 

[LDFerguson]

If you have only one source of income, you can either contribute to the AVC arrangement your employer offers or an AVC PRSA of your own choosing. You may be able to convert your existing PRSA into an AVC PRSA - check with the PRSA company.

An AVC PRSA is paid gross and you claim back your own tax and PRSI relief. Otherwise, compare the two in terms of charges and fund choice.

 

[St. Bernard]

I would say the compoany AVC option would be immediatly beneficial as you would get the tax relief at source rather then having to apply for it at the end of the tax year.

 

[ClubMan]

I would say the compoany AVC option would be immediatly beneficial as you would get the tax relief at source rather then having to apply for it at the end of the tax year.

Tax AND PRSI relief. For a "standalone" pension you need to claim tax relief first and PRSI relief once tax relief has been claimed so it is a bit more administrative hassle. Getting tax relief at source via payroll is so much easier! However there are several other factors to be considered when comparing the two options - e.g. charges, range of funds on offer, whether or not the employer will match contributions to some level to the occupational scheme etc.

 

[LDFerguson]

I would say the compoany AVC option would be immediatly beneficial as you would get the tax relief at source rather then having to apply for it at the end of the tax year.

If the charges on the company AVC are much higher than on an AVC PRSA, most people would consider the minor administration of claiming tax relief (which you generally only have to do once) and PRSI relief (which involves filling out a form once a year) to be well worth it.