What exactly is an AVC Pension?
An AVC (Additional Voluntary Contribution) is a tax-efficient way to top up your pension. When you retire, you can use the money invested in your AVC to buy the additional pension benefits you want, subject to Revenue rules.
With an AVC you are investing in your future, to enhance your lifestyle and the financial security you enjoy in retirement.
Benefits of an AVC Pension
When Retiring You can Choose the Pension Benefits that You Want.
When the time comes to retire, AVCs let you choose what benefits you want, these include:
- Tax-free lump sum
- Approved Retirement Fund
- Taxable cash
We highly recommended you talk to one of our financial advisors who will take you through the process, step by step, to help you maximise your options.
You have Full Control over How Much You Invest
It’s your AVC so you can increase, decrease, stop or restart your AVC contributions at any time.
This means as life events occur your priorities may change; so too can your investment, ensuring financial security when you retire.
Option of Early Retirement
An AVC can help you to retire early providing you with additional income of up to 2/3s of your final salary as well as an initial lump sum of up to 1 and 1/2 times your final salary.
Investing in an AVC allows you to save money for your future and get tax relief right now!
For example, if you pay income tax at 40%, for every €50 you invest in an AVC the actual cost to you is only €30!
This is because you will get €20 of your €50 investment back in tax relief.
Why choose MadeSimple?
We use technology to facilitate a more personalised and environmentally friendly financial advice service from the comfort of your own home.
We aim to de-jargon pensions and personal finance, explaining them in lay mans language because we know they can be over complicated.
More on Additional Voluntary Contributions
AVC Teacher Guide
Click to review the Additional Voluntary Contribution Teacher Guide to educate yourself on the additional contributions you can make towards your retirement benefits when you are already paying into a pension scheme.
Financial Well-Being Webinar for Newly Qualified Teachers
If you’re a newly qualified teacher this webinar could provide you with some very useful information on your tax credits, payslip and AVCs. Even if you’re not newly qualified, you may still find some of the information on AVCs useful.
If you still don’t understand AVCs why not watch our quick explainer video to help you understand.
What Does the Financial Planning Review Cover?
We review all your pensions and calculate what your retirement income will look like. Based on that analysis, we can recommend a course of action so you can maximise your benefits. Very few employees we talk to have entered full-time employment from day one and stayed with the same employer for their whole working life. Employees call us worried about old pensions, career breaks, job sharing, working abroad, etc. Things are never straightforward until we produce your free report. This is a fantastic no obligation review of your financial wellbeing.
Whether you need to protect you family’s future, mortgage or plan for inheritance taxes, it is key to have the right insurance policy for your needs. Furthermore, as part of the report, we will search the market for the best prices out there.
If you have more than 3-6 months pay in your bank account (your emergency fund), you are faced with questions how to use your money wisely. Should you increase your pension contributions, open a savings account for your children’s education, invest in bonds, etc.? The MadeSimple report makes these questions much easier to answer taking into account your tax position and financial objectives.
You – Complete a short online application form
We – Generate your personal report that outlines your current benefits.
Together – We schedule a review online (we use Zoom, or a platform you may suggest) or over the phone to discuss what options are available to you.
After we complete the review, many employees are delighted to have their options regarding pension planning, salary protection, life protection, savings and investments explained to them so clearly. Not only that, but we can also set up policies for you all online in a very fast and efficient manner.
Get your complimentary, personalised review today! You have nothing to lose!
AVC Frequently Asked Questions
Put simply, an AVC allows you to make additional contributions towards your retirement benefits. At retirement you’re free, subject to the relevant Revenue rules, to use the money in your AVC to buy the retirement benefits you want. You must be a member of your employer’s Superannuation Scheme to be eligible to join the AVC Plan.
Anybody who is a member of a pension scheme can set up an AVC.
You can set up your AVC in three ways:
Fill in our online financial report form. An advisor will generate a personal report for you. You can then schedule an online meeting with and advisor who can guide you through the process of setting up an AVC.
Send us an email. One of our financial advisors will get back to you ASAP. E-mail: firstname.lastname@example.org
On the phone. Our friendly finance advisors are ready to help. Call us on 061 469884
There are lots of great reasons to start an AVC:
• You can benefit from tax relief
• An additional pension for you in retirement
• An additional pension for your dependants if you die after retirement
• Buying ‘missed years of service’ through the Purchase of Notional Service (PNS) Scheme
• An option to buy employer benefits, e.g. repaying a marriage gratuity, paying an amount deducted from your gratuity or paying outstanding Spouses’ and Children’s Scheme contributions.
*This option must be exercised prior to your retirement. †This benefit is not available to the Public Sector PRSA.
Subject to a minimum of €75 per month and a maximum determined by Revenue based upon your age, salary, and your other pension contributions you can select how much you contribute to your AVC fund. You can stop, start, or pause your AVC contributions whenever you like. Any change to your contribution amount may take up to two months to take effect on your payslip. You can also make one off lump sum contributions.
Yes! Like regular pension contributions, you can qualify for income tax relief at your marginal tax rate when you make these extra contributions.
You cannot start soon enough, because the sooner you start the more money you can build up. The more money you can save, the better the benefits you can avail of at retirement.
If you decide to make a once-off lump sum payment into your pension before the 31st of October, you can still qualify for a tax relief in respect of the previous year. You should note that you will need to have lodged your claim for tax relief with your local Inspector of Taxes by 31October in any year for your application for tax relief to be considered by the Inspector of Taxes.