AVCs (with DB scheme) Are they a waste if I stay until I am 65?

Hi
I needs some info on my AVCs ,I started paying into AVC about 10 yrs ago,( ONLY £10 PER MONTH ) approx 18 months ago i found out by accident that if I stayed with my present company until I retired at 65 I would not be able to get my AVCs back as I would have been with them for 43 yrs and would get my full pension,I stopped paying any more money into my AVCs but have a sum of about £1600 just stuck in the account.
Is there anyway i can get this money out or transfer it somewhere or will I just have to retire early to get this money.

Re: AVCs

I am assuming you are on a defined benefits scheme.
Revenue rules allow you take a maximum pension of 2/3 of final salary (Final salary incluses profit share taken as cash, notional salary, BIK, etc.) ie figure on your P60.

Most defined benefits (DB) pension schemes allow a pension of 1/60 per year of service up to a maximum of 40 years giving a final pension of 40/60 of your annual salary less the state pension.

So, you can contribute to AVC's to make up the shortfall of the state pension and the difference in your annual salary and revenue's final salary.

If you retire earlier with less than 40 years service you can use the AVCs to increase your pension up to the max allowed.

Hope this makes sense.

Re: AVCs

Thanks for the reply,looks like i will have to retire early as seems like i cannot get at my AVCs until i retire .
Thanks again

Re: AVCs

You could if you wished continue to accru more than 40 years service, the actual maximum that you can retire on is 45/60 - the extra 5 is based on working 5 years after retirement.

Re: AVCs

You could if you wished continue to accru more than 40 years service, the actual maximum that you can retire on is 45/60 - the extra 5 is based on working 5 years after retirement.

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This is the first I have heard of the additional 5 years. Can you provide a link i.e to revenue or pensions board

Re: AVCs

Never look at this on Pension Board but it is covered in Pension Leglisation as Late Retirement options. Revenue would not have it on their website but I can guarantee that it is available under Occuptational Pension Rules.

Re: AVCs

Getting the benefit of added years (say 45/60ths) only apply if you continue to work in the Company after your Normal Retirement Age (65). You can accrue an extra 5 years on such a basis.
BUT, years of service in excess of 40 which accrue before Normal Retirement Age are ignored. So if you have completed 43 years service by age 65, you are only entitled to 40/60ths NOT 43/60ths. If you continue in employment after 65, then you can accrue additional years.

In oder for your AVC fund to be a waste you would need to be getting Revenue maximum benefits:
- pension of 2/3rds Final Salary (inclusive of bonuses, BIK etc) and with no offset for Social Welfare pension
- there would need to be a Spouses pension of 100% of your pension on your death
- pensions in payment would need to be indexed in line with CPI

In my experience, very few (very few) private sector schemes provide absolute Revenue maximum benefits, so I would expect that you have some scope for AVCs. Check with your Scheme Trustees.