Nat. Teacher AVC €865 and then per annum 5% fee plus 1% of fund: exorbitant

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dangerhere

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One year ago I began paying AVCs through Cornmarket who are the only authorised agent for national teachers. They charge an up front fee of 865 Euro and then their cost per annum are 5% fee plus 1% of the fund. It appears this is extermely exhorbitant. Has anyone any similar experiences or know of a cheaper way to do this.
 
You're right, those fees are a rip-off. You'll probably find if you checked that Cornmarket have monopoly rights through an arrangement agreed by your union with your employer. Then for every client Cornmarket gets, your union gets paid a fee (essentially a kick-back). The whole system stinks! Every public sector union seems to be at this.

But you don't have to use the AVC provider that your payroll specifies. You can set up your own AVC pension or PRSA and make payments outside of your salary, then claim your tax back retrospectively. If you can choose a discount pension provider, the savings on fees can be substantial.
 
Read the small print!!!

There is also an additional 1% "collection" fee on the gross contribution - on account of the difficulties presented by teacher's salaries (???). In addition the default scheme also carries a higher management fee (1.75%). If you decide to seek advice from the Woodchester rep - they contact you at least once a year - that costs €832.

My wife had an ASTI AVC through Woodchester but she changed to a PRSA AVC with another provider three months ago. She opened the Woodchester AVC in 1997 and last year was the first where the fund value exceeded cumulative contributions! Too little too late!

Our advice - bypass Woodchester and go independent. There is better choice and more value elsewhere.
 
Can teachers buy added years on guaranteed rates (there is a related thread running about the guaranteed buy back of years for public sector workers)?
 
I mean if they pay a fixed amount they are guaranteed a certain number of years...the fixed amount can not change.

And - because the government is (in effect) administering the pension it would kick the crap out of any deal being run such as the arrangement with Cornmarket which has no guarantees and seems to have a lot of fees built in.
 
The Cornmarket/teachers pension issue was raised a few times on AAM in the past but I'm not sure if any of the threads specifically about their charges still exist. Try searching. I remember Cornmarket specifically reacting to/rebutting criticisms of their charges made by Brendan and by others on AAM. :)
 
I am certainly not criticising the charges - but a defined benefit offer from the government at "pre-historical" buy-back rates beats the hell out of any DC (Defined Contribution) arrangement that could possibly be made by any provider.
 
Capital1 said:
And - because the government is (in effect) administering the pension it would kick the crap out of any deal being run such as the arrangement with Cornmarket which has no guarantees and seems to have a lot of fees built in.
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Don't forget that while notional service can be purchased up to 40 years service at retirement age (giving 120/80 x final salary lump sum and 40/80 pension), there is now further scope for AVCs to fund additional benefits. Look here:http://www.askaboutmoney.com/showthread.php?t=22099&highlight=avc+prsa

It seems to me that any public servant of any description who will be at all short of service on retirement should buy as much notional service as they can in preference to AVCs:[broken link removed]
and then (to ice the cake) take out a standalone PRSA AVC with a low-cost pension provider to fund any of the extra benefits the Revenue will permit you. But, frankly, a full public service pension is so good that the AVC part of this strategy is bordering on the OTT.
 
I hope to merge a number of fairly good threads concerning Teachers AVC's here over the next few days.

Does this 1% charge from the department still exist?

From http://www.irlgov.ie/debates-03/11Nov/Sect8.htm (Dail Debates Nov 11 2003)

Mr. Kenny asked the Minister for Education and Science the charges or levies a company (details supplied) impose on teachers with respect to the AVC scheme. (26448/03)
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Minister for Education and Science (Mr. Dempsey):

My Department currently takes a 1% handling fee by way of a deduction from the total contributions of members in respect of all the products operated under the deduction at source arrangements for Cornmarket. The role of my Department is to operate the deduction facility.

The issue of any charges or levies that the company referred to by the Deputy may impose on teachers is a matter between the company, the individual teacher and the relevant teacher union.​
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aj
 
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