Working out Max AVC contributions in the single service pension scheme

[Purple Socks]

Hi all,

I am 51 years old and have recently joined the Civil Service as a Higher Executive Officer (HEO). I have a query regarding the maximum percentage of my gross salary that I can contribute to an Additional Voluntary Contribution (AVC).

Based on my understanding:

• State Pension (OAP): €15,564
• HEO salary (Point 1): €59,435
• Maximum pension contribution at age 50 is 30% of gross salary

Pension-related deductions:

3% of €59,435 = €1,783.05
3.4% of (€59,435 − (€15,564 × 2)) = €990.75

Total pension deductions: €2,773.80, which is approximately 4.66% of gross salary.
I could therefore contribute up to 25.34% of my salary to an AVC.

As the State Pension increases, this percentage would rise. As salary increases, the percentage decreases.
For example, at Point 7 of the HEO scale (€69,849), the total pension deduction would be approximately 4.92% of gross salary.

My questions are:

Is my calculation correct?
What would be a prudent buffer to ensure I do not exceed the maximum allowable contributions? Would contributing 25% to AVCs be considered safe?

Thank you.

 

[Protocol]

As well as doing the calculations above, you can look at the December payslip, and read off the total occupational pension conts.

 

[LDFerguson]

I can suggest two ways around this...

• As @Protocol says, wait until your final payslip of the year has issued as that will have the exact figures for the year. Then in January make a contribution for the previous year.
• If you'd prefer to pay monthly, pay a low percentage on a monthly basis, e.g. 20% and then top it up each January to your maximum using the final payslip of the year.