# Teacher AVC



## tommi (10 May 2015)

I will be retiring early from teaching.  I will have a lump sum of about 100,000.
If I had 40 years service, I would get about 140,000 lump sum.
I also have about 70,000 in AVC's.  Does anyone know much tax will I pay on the AVC's
if I withdrew the full amount of AVC's??


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## Steven Barrett (10 May 2015)

You pay income tax at the marginal rate so if you took it in one go, you'll be paying over 50% in tax. 

Steven
www.bluewaterfp.ie


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## tommi (10 May 2015)

SBarrett said:


> You pay income tax at the marginal rate so if you took it in one go, you'll be paying over 50% in tax.
> 
> Steven
> www.bluewaterfp.ie


Many thanks.  I assumed that I would be allowed 40,000 of the AVC tax free - the 
difference between the 100,000 I will get and the 140,000 I would have got if I had full 40 years
service.


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## elacsaplau (11 May 2015)

Hi Tommi

Some of your AVCs can be taken tax free, being the difference between what your pension scheme provides and the Revenue maximum.

See section 9.4 of the Revenue pensions manual for details - it sets out the general rules with regard to maximum lump sum benefits upon early retirement - on grounds other than ill-health:  [broken link removed]

If I were you, I would look for a quote from your Pensions Department of your options and in seeking the quote I would make it clear that you wish to take the maximum possible tax free amount.


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## tommi (11 May 2015)

elacsaplau said:


> Hi Tommi
> 
> Some of your AVCs can be taken tax free, being the difference between what your pension scheme provides and the Revenue maximum.
> 
> ...



Many thanks.  I will look into that.  Thanks again.


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## oysterman (14 May 2015)

tommi said:


> Many thanks.  I will look into that.  Thanks again.


If your AVCs are with Cornmarket, which is most likely, make sure to arrange a meeting with one of their advisors who should be able to walk you through this stuff. God knows you've paid them enough over the years.


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## Gerry Canning (14 May 2015)

By all means contact Cornmarket but strongly advise get a 2nd opinion.


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## Steven Barrett (14 May 2015)

Gerry Canning said:


> By all means contact Cornmarket but strongly advise get a 2nd opinion.



Cornmarket have a lot of the systems in place to calculate tax-free lump sums etc for the public service schemes. 

Public service pensions are extremely complex and most independent advisors simply don't have the resources to put such systems in place. 

Steven
www.bluewaterfp.ie


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## oysterman (14 May 2015)

Gerry Canning said:


> By all means contact Cornmarket but strongly advise get a 2nd opinion.


I'm not advising OP buy any more products off them, merely that s/he gets the value of what's already been paid for. They do know the PS pension rules well by all accounts and I've heard of them being really good in these situations. It's hard to blame them for the ludicrous terms the PS unions have agreed with them for monopoly products like AVCs by salary deduction.


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## Gerry Canning (15 May 2015)

oysterman said:


> I'm not advising OP buy any more products off them, merely that s/he gets the value of what's already been paid for. They do know the PS pension rules well by all accounts and I've heard of them being really good in these situations. It's hard to blame them for the ludicrous terms the PS unions have agreed with them for monopoly products like AVCs by salary deduction.


oysterman,
Sorry , I didn,t mean to even hint that.


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## Planner (18 Jun 2015)

Dear Tommi,

You should also look into dynamisation for your earnings. You also have the option to access 30 per cent of your AVC without being liable to USC or PRSI. With this in mind you need to look at your estimated earnings in retirement to weigh up will you be over your standard rate threshold or not.

If you are, taking the 30 per cent may be an option.

It would be in your best interest to seek professional independence advice.


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