caution to job sharers

[benny fitt]

If you have less than 20 years service at retirement your max tax free lump sum of 150% is reduced by about 8% for every year less than 20 e,g, 15 years allows only 90% of earnings as max taxfree lump sum.
Cornmarket were singularly silent on this point while allowing my wife to accumulate 150% of earnings in avc,s despite her short service.She paid them 800€ for "advice" when she started her avc.
Also if you have ,at retirement,an income lower than 12700€,you are obliged to keep your avc in a min arf fund,until age 75 or your income exceeds 12700€,irrespective of spouses income.
I am considering an equality challenge to these issues as no mitigaton applies to years spent as a homemaker as is the case in qualifying for contributory OAP.

 

[Conan]

But it is also worth bearing in mind that the AVC fund can be used to buy an annuity (additional pension). She does not have to invest in an ARF or AMRF.
That said, she should have been advised as to the rational for investing such amounts into AVCs. Clearly the most tax efficient rational is to maximise her tax- free lump sum, where the main scheme will not provide the Revenue maximum. But if she has only 15 years service there should still be some facility to use part of the AVC fund to top up what her main scheme will provide (45/80ths) to the a revenue maximum for 15 years service. Any excess must either be used to buy an annuity of invested into an ARF/AMRF.