AVC on Leaving

Hello

Just wondering, if someone is leaving employment, can they do an AVC on their last pay, avoid tax at 42% (+ PRSI), then when they have left, get a refund of pension contributions less 20% ?

Effectively saving tax of 22% + PRSI

Am I missing something ?

I presume so. Once you are within the age related tax relief limits then you are entitled to full tax and PRSI relief on pension contributions. However even if you don't do this before leaving (and your employer might not want the hassle of the administration etc.) then you can still do it into a personal pension plan or a PRSA. In fact you can also set pension contributions made before October 31st in any year against unused pension tax relief from the previous tax year if relevant - in addition to any contributions that you offset against the current tax year's relief. Does that make sense to you?

Thanks Clubman

I guess my main reason for seeing the attractiveness is that as I have less than two years service, I have decided to take a cash refund (as I can't bring my employer part with me), so this is a really quick way of avoiding (not evading) 22% Tax and 6% PRSI as far as I can see.

Do you agree ?