"Care must be taken to ensure that overfunding does not occur, as surplus funds may have to be refunded to the employer and taxed as a trading receipt."
"The aggregate benefits payable on retirement to an employee who retires at normal
retirement age after 40 or more years' service with the same employer, when expressed as
an annual amount payable for life (or for life subject to a guaranteed minimum period not
exceeding ten years) and taking into account any benefits paid as lump sums, should not
exceed two-thirds of final remuneration on retirement (section 772(3)(a) Taxes
Consolidation Act 1997 (TCA)."
If she was to open an AVC / PRSA AVC, how would one calculate the maximum pension pot to not run into point a above (risk of overfunding)?
According to point B, somehow even if (for example's sake) her pension pot is 10 million euro, she would only be able to pay herself a maximum of 2/3s of her salary of 60k ( around 40k ) per year? This can't be correct, right?
If she were to retire early (say 55), after the tax free lump-sum, would she be able to move the (PRSA) AVC into an ARF?
I read somewhere that since the single scheme is a defined benefit scheme, this was not an option and the only alternative is an annuity ?
Can she retire early with no penalty in regards to the (PRSA) AVC she opened?
Get an estimate of her benefits at retirement from the Single scheme. Then get an estimate of her benefits from her proposed PRSA AVC. Make sure that the two combined don't exceed the limits.
It's her salary at retirement which will presumably be higher, but in a nutshell, that's it. That's the upper limit.
seems a bit unfair when private sector can get up to 200k tax free
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