- the other “shortfall” between the above and Revenue maximum would be the contingent Spouses Pension which technically could be increased from 50% under the main scheme to 100%. But this is a contingent benefit, ie it only arises IF you predecease your spouse (so it might never arise).
No allowances. I got about 2 weeks payment in lieu of untaken leave on my final payslip.did you have any non pensionable pay or allowances available to increase the Revenue pension limit?
Correction.At retirement you can have a pension of 2/3rds final salary + an ARF or Annuity funded from your AVCs.
The definition of salary per revenue definitions is different to the PS scheme; it includes more than just basic pay and can be indexed in line with inflation. Also, the uplifted scale can give a higher lump sum (and pension) than the 3n80th/n60ths. There's always scope for AVCs on a PS pension.I don’t doubt what you say, BUT:
- if you had 39 years Public Service then you “shortfall” was
3/80ths x Final Salary as a lump sum, plus
1/80 x Final Salary of pension
- the “cost” of that shortfall was probably fairly modest (no disrespect)
- the other “shortfall” between the above and Revenue maximum would be the contingent Spouses Pension which technically could be increased from 50% under the main scheme to 100%. But this is a contingent benefit, ie it only arises IF you predecease your spouse (so it might never arise).
- I am curious how somebody calculated you were not overfunded with an AVC of €183k. How did they value such a contingent benefit?
I don't think the definition of salary differs. However, some allowances and payments made to PSs are pensionable and some are not. Those that are not pensionable for PS Superann purposes may be allowed by Revenue. However, this probably doesn't apply to the majority of PSs.The definition of salary per revenue definitions is different to the PS scheme; it includes more than just basic pay
I don't get this one - can you elaborate or illustrate?can be indexed in line with inflation
Also, the uplifted scale can give a higher lump sum (and pension) than the 3n80th/n60ths
An average of 3 or more years salary with inflation applied could give a higher salary, where the actual salary has increased at a lower rate than inflation over the period used.I don't get this one - can you elaborate or illustrate?
An average of 3 or more years salary with inflation applied could give a higher salary, where the actual salary has increased at a lower rate than inflation over the period used.
Thanks everyone. All very interesting, lots to think about.
I just want to bring it back to basics for a moment and try and avoid complex calculations etc.
I found this definition of “AVC overfunding”
“If you have accumulated excess funds, over and above your tax free shortfall and will have guaranteed pension income (either from your job/state pension or other income) which will put you into the higher income tax threshold (40%), your AVC fund is overfunded.
Many employees, especially members of Defined Benefit Schemes, may find themselves facing a huge tax bill on these funds in retirement. This means, that although you would have got tax relief going into your AVC, at your marginal rate of tax, you could be faced with a tax liability of up to 52% when withdrawing these AVC funds on retirement”.
I mean is this essentially it? If you are being taxed at 40% when accessing AVC’s, it’s probably not worth your while and you should explore other options to save/invest for retirement? And AVC’s are really only beneficial to top up your pension in retirement only if you can keep it in 20% income tax rate?
This is completely wrong“If you have accumulated excess funds, over and above your tax free shortfall and will have guaranteed pension income which will put you into the higher income tax threshold (40%), your AVC fund is overfunded.
Yeah, I was wondering where this came from. Seems to be from here:This is completely wrong
Yes, that’s it. I tried to put in the link but it wouldn’t let me post.Yeah, I was wondering where this came from. Seems to be from here:
Public Sector AVCs | AVCs Contributions And Tax Relief/Top up your tax free lump sum/
Expert public sector AVCs advise. Calculate your AVC requirements and whether or not AVCs are beneficial for you. Learn if you are underfunded or overfunded and how to make regular or lump sum contributions into AVCs to fund any shortfall in your pension.mmadvisors.ie
I found this definition of “AVC overfunding”
“If you have accumulated excess funds, over and above your tax free shortfall and will have guaranteed pension income (either from your job/state pension or other income) which will put you into the higher income tax threshold (40%), your AVC fund is overfunded.
Many employees, especially members of Defined Benefit Schemes, may find themselves facing a huge tax bill on these funds in retirement. This means, that although you would have got tax relief going into your AVC, at your marginal rate of tax, you could be faced with a tax liability of up to 52% when withdrawing these AVC funds on retirement”.
There must surely be a strategy where you retire earlier but don't use the 'other' sources for a few years,living instead off the AVC pot and avoiding excessive taxes
Yes, you could take the max lump sum out of the AVC pot only and leave the main scheme pension undiluted.Can you not withdraw lump sum from the AVC's instead of your main scheme ??
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