Central Bank AVC options

[bobinvest]

I'm 36 and joined the Central Bank last year. I set up my AVC via Cornmarket last year and am maximizing my contributions to it. If I stay in the Bank I would be contributing to this for the next 30 years approx. I've read the very helpful post on Single Public Service Pension Scheme.

The Cornmarket set up (which is publically available) for the Bank is:



The list of available funds are:



For the last year I have been 100% High Yield Equity Fund but I am looking for a set and forget set up focused primarily/exclusively on indexed equities with as low a fee structure as possible. The only passive indexed fund I can see in this list is 'Aviva Global Equity ESG Passive Fund'. It is described as: "This Fund aims to grow your investment over the medium to long-term by principally investing in the companies that make up the MSCI World Index." This fund wasn't available when I initially set up my AVC.

Bearing my desired approach in mind, is going 100% into the passive fund at a 99% allocation rate with an AMC of 0.7% a decent approach or would I better going the DIY route and setting up my own PRSA?

I do value the convenience of everything being sorted in my payslip but would be willing to do some admin to benefit from lower charges or a wider selection of funds.

Any views much appreciated.

Thanks

 

[Ent319]

Hi Bob. Glad you enjoyed the thread. Because you're not on a scheme with the tiered AMC rates you could look into an execution-only Royal London option, especially if your contributions are greater than €750 pm and you can get the 0.6% AMC rate on index funds (with potential for rebates with further savings). The downside would be having to faff around with PRSA certificates / revenue MyAccount.

 

[bobinvest]

Thanks Ent319. The lower AMC of 0.6% v 0.7% is tempting along with the full allocation versus 99%. I just wonder if the hassle with Revenue is worth the effort of changing at this stage. Some of the calculators suggest thousands in the difference if I go to retirement on this avc prsa. Something to think about.

 

[GSheehy]

I just wonder if the hassle with Revenue is worth the effort of changing at this stage. Some of the calculators suggest thousands in the difference if I go to retirement on this avc prsa.

That's the crux of it really. Is it worth submitting a PRSA2 Certificate via My Account to save thousands?

On the fund/technical side, the additional costs on the Global Equity ESG Passive were 0.07%, in May of last year. The alternatives don't have filtered/ESG passive fund options so their additional costs are lower at circa 0.02%. Most folk don't give two hoots that their passive funds don't have an ESG designation and would be unwilling to pay extra costs for it. That extra cost would not be factored in to any 'quotes' engine. It would be included in the fund price/;past performance figures of the provider though.

 

[Dr Strangelove]

I just wonder if the hassle with Revenue is worth the effort of changing at this stage.

It absolutely is. 1.1% compounded for 30 years is 38.5%.

I’m in a similar position to you and have gone all equities with lowest possible fees.

Cornmarket are dug into various public sector bodies but when I’ve looked at their products personally I’ve never found them good value.

 

[bobinvest]

It absolutely is. 1.1% compounded for 30 years is 38.5%.

I’m in a similar position to you and have gone all equities with lowest possible fees.

Cornmarket are dug into various public sector bodies but when I’ve looked at their products personally I’ve never found them good value.

Thanks for this. Did you happen to have to move from Cornmarket. Would you have a steer on what’s involved?

 

[Dr Strangelove]

Did you happen to have to move from Cornmarket.

I never went with them in the first place

I imagine you have to set up a provider who will deduct AVC contributions from your bank a/c via DD monthly. They’ll send you a form and you upload to Revenue. Revenue adjusts your tax credits so net effect is the same.

For sure Cornmarket via payroll is simpler but savings really add up over long run.

 

[bobinvest]

That's the crux of it really. Is it worth submitting a PRSA2 Certificate via My Account to save thousands?

Thanks for this. Is the admin an annual requirement? I think what I’m most concerned about is cash flow. I don’t like the idea of having to overpay for the year and then getting a refund at year end. If I go this route, is it possible that my net pay is as currently?

 

[GSheehy]

You can pay by direct debit, upload the cert on policy receipt and tax credits adjusted immediately. If you don't want extra admin don't include indexation on the plan as new Certs are issued each year that happens and you have to adjust the figures again.

You can do a one off payment, upload cert and Revenue issue a refund to you.

Whoever you buy the product from should be helping you with this process.

I've never used My Accoubt but I believe you can submit queries through it if you need clarification on anything they'd outside the ordinary.

 

[Dr Strangelove]

Whoever you buy the product from should be helping you with this process.

I purchased income protection from a broker who offered to guide me through this process. I could do it myself and it took about ten minutes.

@bobinvest it’s the same process for AVCs and in the scheme of things should be easy for someone bright enough to work in the body that regulates the industry

 

[bobinvest]

Just to close this off. Got my PRSA AVC set up with Royal London, first contribution made, and cert uploaded to Revenue. All very straightforward! The hardest thing is trying to get my original AVC fund transferred over to Royal London. Thankfully looks like it will stay just under 10k so I'll avoid having to get that actuary cert I read about. Trump's tariffs had a small benefit for me!