Age 30, should i do AVCs

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54red

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I am a 30 year old teacher and met a cornmarket rep this wk. Of course he tried to push everything on me but I signed nothing. What I am interested in knowing more about is AVCs. Can anyone give me more information? I only began teaching in sept 04 which means I can't retire till I'm 65 (I think). But i would like to retire with full pension aged 60. So what are my options? pros/cons? Explain it to me like I'm a 2 yr old because finances aren't my strong point!
 
My father is a secondary teacher with superannuation, Cornmarket AVC and an Eagle Star PRSA-AVC.

I do a small bit of advising teachers on their pensions.

My advice: first of all, make sure you fully understand your pension scheme, notional service purchase, AVCs, etc.

Don't rush into a decision.
 
My advice, after doing AVCs for several years and seeing my savings grow very little is to start buying back years NOW through the notional service scheme. This scheme will give you a guaranteed return, the AVC gives NO guarantee.
 
Agree with above - first preference for most people would be buying service.

Second choice would be PRSA AVC.

Very last choice would seem to be Cornmarket - and even then I think it might be better to do nothing than go that route.
 
thanks for replies, cornmarket does not seem to be the option to take... Can somebody explain the notional service scheme? is this run by the department or who do i contact?
 
Maybe a silly question but i also cant retire till 65, even then i will only have 38 years built up - Can i buy back say 7 years and retire with full pension at 60?
 
thespecialon said:
Maybe a silly question but i also cant retire till 65, even then i will only have 38 years built up - Can i buy back say 7 years and retire with full pension at 60?
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Hi, just went through this whole issue as I re-entered teaching after a few years away. As a "New Entrant" you can retire anytime from 55 to 65 and get your pension,unfortunately that's the only good news.

Firstly the dept way of buy back for missing years only works if you want to retire at 65, as I'm missing 3yrs at 65 so thats all I can buy(the cost was ridiculous). There is no option to buy 8 to retire at 60. That's the rules according to Dept.
Even worse is the fact that while I'm allowed retire early like teachers from before 2004 the A1 State Pension will NOT be paid until 66. This worked out as a pension in today's money of €14500 after 33 yrs.
This is due to a reduction factor which is applied to your pension years scaling back your pension. This was seemingly passed in 2004...What were the Public Sector Unions doing???

Contrary to a few threads I've read on this site my experience of Cornmarket was positive, the rep explained all options unlike the Dept(including the dept's scheme). They had a fee of approx €350 rolled into the AVC's first year.
 
The State Pension is paid from retirement at age 65 if you retire in your 65th year.

I do not see why you think it is unfair that the State Pension cannot be paid at early retirement - if it could then why the devil would any of us not take it as early as possible!!
 
Whatever you do, do it quickly? You seem to have an unnecessarily negative view of Cornmarket. You must have met a bad rep. AVCs are tax efficient firstly and if you actually ask about investment funds you mightamek a better decision. Too many people blame the advisor for poor returns. The advisors job is to explain the potential of funds versus risk. Many people pick low risk funds and then give off because they receive low returns. If you are 30 you should be investing a reasonably high risk strategy as you have plenty of time for ups and downs and the regular investing actually lowers the risk because you are investing at all points in the market.
 
niallliam said:
You seem to have an unnecessarily negative view of Cornmarket. You must have met a bad rep.
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The Cornmarket scheme for teachers has come in for severe criticism here and elsewhere for many years now. My understanding is that the charges are extremely high and that it may not be the best option for many potential customers.
 

the oap can be paid before 65
 
ClubMan said:
What do you mean? The state old age contributory and non-contributory pensions are only paid out at 65/66 as far as I can see.
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you can apply for the supplementary pension in the case of public sector employees paying a1 prsi. this is to avoid D1 contirbutors having an advantage over those that pay a1 prsi after 1995
 
What is the Supplementary Pension? I can't see it listed on the SW website. Do you have a link?
 
ClubMan said:
What is the Supplementary Pension? I can't see it listed on the SW website. Do you have a link?
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the supplementary pension is paid to A1 PRSI payers who have a preserved retirement age of 60. the reason for this is they would be at a disadvantage compared to there D1 counterparts if they had to wait till 65 to get the oap. im afraid i dont have a link to it but if you check with your local hr dept or sw office they should confirm it for you although they probably will dismiss it at first as they wont know but if you press them to find out they will.


mula
 
It this Supplementary Pension exists then surely it would be mentioned on the SW website? Are you sure that you're not talking about some other SW payment?
 
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