Superannuation and private pension simultaneously

[3CC]

Hi,

I have checked the forum and cannot quite find the answer to the following.

I have had a personal pension with Quinn Life for the past few years and have recently joined a local authority superann scheme.

Is it acceptable to continue the personal pension plan with 13.5% of my salary (assuming a max contribution limit for tax relief of 20% ie 6.5% superann +13.5% private pension).

I already rang Revenue twice on this and got two different answers!

Thanks,

DM

 

[LDFerguson]

Assuming the Local Authority income is now your only source of income, the answer is Yes but there's no point.

You can continue the Personal Pension but you won't get tax relief so there's no point in doing so. Instead, you should set up an AVC or AVC PRSA for the 13.5% contribution - you will get tax relief on this.

I'm assuming you have explored your options on Notional Service Purchase.

 

[3CC]

Thanks LD,

I have read the relevant key post by Brendan and I reckon that I should hold off on a decision on Notional Service until closer to retirement.

I am 37 years old, just started in the LA and have about 5 years contributions to my personal pensions (RAC). It would have been a bit simpler if I could just get tax relief on 13.5% in my current RAC but that would be too easy. I am only temporay with the LA so I still see the RAC as my 'main' pension as I will probably not accure more than 10 years in LA over my career. So I guess I need to find an AVC now. Any suggestions? I like tracker type invenstments (passively managed and low annual charges).

Thanks again,

DM

 

[LDFerguson]

It would have been a bit simpler if I could just get tax relief on 13.5% in my current RAC but that would be too easy.

Although there are some valid reasons why AVCs need to be linked to some extent to the "main scheme", I'd be inclined to agree that it should be possible to create suitable rules to allow you to deem your Personal Pension an AVC.

So I guess I need to find an AVC now. Any suggestions? I like tracker type invenstments (passively managed and low annual charges).

There is presumably an AVC facility available in your Local Authority. You should investigate this, although my experience has been that many of these "official" public service AVC schemes feature chunky charges, by comparison with other arrangements.

Your alternative option is an AVC PRSA of your choosing. Irish Life and New Ireland offer a passively-managed Consensus Fund through their Standard PRSA contracts but you'd need to get a non-Standard PRSA to get a wider choice of index-tracking funds. Watch charges on non-standard PRSAs as there's no statutory cap. A discount broker should be able to set this up for you.