Cornmarket AVC or LABrokers/Eagle Star PRSA AVC?

[toby2111]

Hi all!

Had a visit from a Cornmarket advisor/salesman(and I know there's been a lot of heated debate about these guys!).He did up an AVC plan for me,contributing €35 per week until retirement Aug 2035(when i'm 60) will yield me a total of €250,000!!This all based on projected pay at 60 of €132,979......where he got this figure from,i just dont know!Then,i looked at the small print,4% on every contribution,plus 1% annual management charge.So,looked around on this site and saw people mention LABrokers who seem to just charge 1% management charge which is tempting.I know this is execution only.So,heres my questions-

-How can LABrokers offer this,minus contribution charge?
-I know I receive no advice from them but do I receive regular updates on the funds performance or do I have to contact them.
-Cornmarket/Irish Life AVC is deducted at source whereas Eagle Star AVC is not.So,is it much hassle to organise this myself?Because,dealing with DES payroll can be painful at times!
-I began teaching at 22,are AVC's the way to go?I had 1 year break of service to do the Oz thing.So would NSP be a better option?

I know thats a lot of questions and theres been a bit of debate about this.Any advice greatly appreciated.

 

[Protocol]

Hi all!

Had a visit from a Cornmarket advisor/salesman(and I know there's been a lot of heated debate about these guys!).He did up an AVC plan for me,contributing €35 per week until retirement Aug 2035(when i'm 60) will yield me a total of €250,000!!This all based on projected pay at 60 of €132,979......where he got this figure from,i just dont know!Then,i looked at the small print,4% on every contribution,plus 1% annual management charge.So,looked around on this site and saw people mention LABrokers who seem to just charge 1% management charge which is tempting.I know this is execution only.So,heres my questions-

-How can LABrokers offer this,minus contribution charge?

Lower costs, no sales reps on the road, no advice, execution only. All that means no entry fees.

-I know I receive no advice from them but do I receive regular updates on the funds performance or do I have to contact them.

No need to contact them, you'll get the usual annual statements.

-Cornmarket/Irish Life AVC is deducted at source whereas Eagle Star AVC is not.So,is it much hassle to organise this myself?Because,dealing with DES payroll can be painful at times!

Direct debit from your current a/c. You apply for tax relief, and will get an amended cert of tax credits.

-I began teaching at 22,are AVC's the way to go?I had 1 year break of service to do the Oz thing.So would NSP be a better option?

That is a bigger, more important question. Search AAM for the debate.

 

[toby2111]

Thanks protocol.

Had a chat with a guy I know who also works for a financial broker.He said to forget about AVC's because by time i reach 60,i'll have 38 years service done,which is still pretty good.So he reckoned it would be better bet to buy back those 2 and a bit years that I am missing and that I should have enough,at retirement, to enjoy myself going into my twilight years!He said to enjoy the few bob we have now,save in the credit union instead of paying into a fund I cant touch until 60.Oh by the way,he said he would never give this advice to a regular customer!!

 

[ULS]

Toby2111 what expertise does this "financial broker" have in the public sector if even in pensions at all?

1. Do you know approx how much buying back 1 year costs?

Depending on your age and salary it could cost you over 20,000 for 1 year sure if you throw €150 a month into the credit union for the next 10 yearsAfter the tax relief it may only take 15 years of those payments to get your 2 years and half years which would give you a few grand extra in your lump sum and maybe another grand a year in your pension!!

2. What if you want to go before age 60 or have to go due to ill health before 60?

AVCs will give you the option of going earlier help you max the lump sum and then give you an extra income in retirement.

3. How would you survive on half of you salary if you have the full 40 years?

Public sector pension is a great pension but if you were to drop to half of you final salary in the morning even without you mortgage how well would you survive..... Would you not prefer to fund for a little more now without killing yourself and enjoy a better retirement.

4. Tax relief!
Save all you want in the credit union - you wont get much interest on it and you certainly wont get any tax relief.

If your "financial broker guy" can afford to retire at 60 on half of his salary and spend 50k on buying 2 years notional service well good for him. If he was giving this kind of advice to a regular customer he wouldnt have any, he would be out of business.

Best of Luck