Contributing more than 150% to AVC for 40% tax payer

[Sarenco]

Thanks - public sector pensions have always been a complete mystery to me!

So, somebody in that circumstance could take 25% of their private pension as a tax-free lump sum, plus whatever lump sum their public sector schme allows for (together with any AVCs), subject to the €200k tax free cap. Does that sound right?

 

[Steven Barrett]

Thanks - public sector pensions have always been a complete mystery to me!

So, somebody in that circumstance could take 25% of their private pension as a tax-free lump sum, plus whatever lump sum their public sector schme allows for (together with any AVCs), subject to the €200k tax free cap. Does that sound right?

The two of them are dealt with separately and what you say it correct. It it is irrelevant if it's public sector. If you joined Facebook and were part of their company pension scheme, the same rules would apply.

The Revenue should update their rules with regards to company pensions. When the calculations of lump sums were created, it was with DB pensions in mind. Now, unless in the PS, they are more or less gone for new members. All DC schemes should have a lump sum of 25% of fund value and annuity, ARF or taxable lump sum with the remainder. None of this 1.5 times salary and annuity or 25% lump sum and ARF/ taxable lump sum.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[Steven Barrett]

That only confuses me more

Before your post I assumed the max lump sum was

Lesser of(1.5 times final salary, 25% total fund)

But now your saying I can take 25% regardless of salary if I choose annuity?

That's because it doesn't make any sense!