# AVC - pensions



## advocate51 (20 Oct 2006)

i wish to make an AVC to my pension [ contributary] from back money i will get shortly.
1 how do i do it ?
2 what is the financial benefit?
example : 
if i get 10000 and wish to put 5000 in my pension fund how will it work??


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## ClubMan (20 Oct 2006)

Do you already have a pension? Occupational or personal or _PRSA_?

If you have a pension and want to make an additional lump sum _AVC _contribution then contact your employer or pension consultant (for occupational schemes) or broker or underwriter for personal/_PRSA _schemes.

Make sure to check the charges that apply to _AVCs _which may be different to regular contributions.

What is your age and gross income for 2005 and 2006?

What pension contributions have you made this year and last?

Pension contributions under your age related pension tax relief limit get full tax and _PRSI _relief. For a high rate taxpayer this means c. 48% back so for a €52 contribution from net income €100 goes into the pension.

If you did not maximise your contributions to your tax relief limit last year then you can backdate contributions before October 31st this year against that income. 

Obviously the main financial benefit is that you are saving more for retirement but the tax/_PRSI _relief is significant too.

See the key topics thread linked at the top of this forum for more relevant readin.


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## advocate51 (23 Oct 2006)

thanks for the answer.
ya I am in a FAS pension scheme.
my pension cont. is 121.23 pm from my salary.
I am 55 . last year 2005 gross 38000
this year 40700 but in creasing to approx 46000.
i will rec approx 14/15k gross backmoney in the next few weeks.


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## ClubMan (23 Oct 2006)

If you were 55 in 2005 then you could have contributed up to 30% (€11,400) of your gross to your pension and received full income tax/_PRSI _relief. If you only turned 55 this year then you could have contributed up to 25%  (€9,500). If you made contributions in 2005 then subtract them from the 25% or 30% figure and the remainder is the lump sum amount that you could make before October 31st 2006 and retrospectively claim full tax/_PRSI _relief (note that tax and  _PRSI _relief will need to be claimed manually and separately - see the key topics for a thread about claiming _PRSI _relief). For example if you made a lump sum contribution of €1,000 then you will be entitled to 42% (assuming top rate taxpayer) and up to 6% _PRSI_/health levy back - e.g. you could get €480 back from _Revenue _by cheque. Don't make pension contributions just for the tax relief though especially if there is some other more immediate use to which the money could be better put (e.g. reducing debts, buying a home etc.). If in doubt get independent, professional advice from somebody better placed to assess your overall circumstances and needs.


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