Most public servants will retire with a reasonably good pension,
You don't say what the ongoing annual management fee is and I don't understand the "single premium charge" but I still suspect that you could easily get lower charges than those by shopping around - e.g. a lower and possibly 0% bid offer spread and an annual management fee of c. 1%. Unless things have changed significantly since I last looked at this in detail...? Obviously the charging structure is just one item to be considered when shopping around. You also need to consider fund selection, customer service etc.Had a quick took at a brochure and it highlighted their fees/charges, ie bid/offer spread of 5% and a single premium charge of 3%.
...
Are these charges above the typical industry normal?
To get the best deal on fees s/he would most likely have to look at setting up a PRSA AVC vehicle as opposed to the group AVC scheme negotiated by the union. There are threads elsewhere on AAM about these.My partner works in the public sector where their union is now talking about AVCs due to recent rule changes (whereas in the past it wasnt favourable).
Had a quick took at a brochure and it highlighted their fees/charges, ie bid/offer spread of 5% and a single premium charge of 3%.
So if my partner decides to do a AVC for 2010, does the above mean only 92% of the AVC will go to the investment funds? Are these charges above the typical industry norm?
Thanks
S
Most public servants will retire with a reasonably good pension, if they have a good number of years service & finish on a reasonably good pay grade.
But would it actually be worth paying into say an AVC aswell to top up your pension income?
For example, a public servant retiring with the full 40 years at age 60 on 90K/yr will receive an annual pension of 45K and a once off, tax-free lump sum of 135K.
Any additonal contributions to a private AVC would earn 41% tax relief.
The fund may rise a small bit over its duration
(from last night's show private pensions have only risen 1% per annum on average over the past 10 years - not sure if this 1% growth is after factoring in the management fees, etc or not, but I'd say not!)
But upon retirement, I don't think there would be any tax-free lump sum possible from their private pension pot (as you received your public service pension lump sum tax-free - I'm open to correction on this!)
And you will also likely be paying 41% on your annual pension income due to the 45K public servant pension putting you over the threshold.
So I don't see there being any benefit in an AVC for public servants if they have a good number of years service & finish on a reasonably good pay grade.
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