Have DC plan, other pension options?

C

Carpenter

Registered User
Messages
2,607
Hi All,
I haven't posted many financial queries in the past so I'm hoping someone can point me in the right direction regarding this pensions query. I have a Personal Pension plan from New Ireland which I started about 9 years ago. I stopped paying into this policy two years ago when my employer started a defined contribution scheme in the company. I am not contributing to this scheme (employer contributes 7.5% of gross salary), although I was offered the option of setting up an AVC. I was unsure about this at the time and was anxious to seek independant advice. I couldn't consider the additional expense at the time in any case. I now want to look at the options available to me, the most logical would appear to be to set up an AVC with a low cost provider like Quinn Life. This would give me the option of purchasing an annuity or ARF at retirement. My wife and I are already seriously considering investing directly in the stockmarket anyway with an SSIA lump sum, based on much of the advice I've read on AAM. That said I know I should still be looking at the AVC as this is a very tax effective method of saving money for the future. My wife works in the public service so her pension provision is quite good. Any thoughts please??
 
Carpenter said:
I am not contributing to this scheme (employer contributes 7.5% of gross salary)
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You get the employer 7.5% even if you don't contribute? That's nice!
although I was offered the option of setting up an AVC.
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You mean AVC contrinbutions under the occupational scheme or outside of it via, say, a PRSA? I thought that if the employer facilitated AVCs via the occupational scheme then if you wanted to make AVCs you had to take that offer and could not open a separate pension (e.g. PRSA)? Basically - are you sure that the option of opening a separate PRSA or RAC for AVCs is open to you? What charges apply to AVCs to the company scheme (if applicable)?
 

Yeah the 7.5% is good I must admit, there may be scope to look for ann increase to 10% this year. There is no tie-in of employer contribution versus employee contribution with this scheme. Basically the company had a broker set up the scheme and the broker "suggested" that I set up an AVC myself to cover the shortfall in predicted benefits at retirement. There is no AVC facility via the occupational scheme, which I suppose gives me more flexibility (in terms of provider). So, as I understand it I am free to start an AVC, subject to the revenue rules. I was very reluctant to discuss the AVC option much further with the broker- he was a tied agent and mightn't have my best interests in mind!
 
Is Quinn Life able to set-up a standalone AVC?

I gather that they are not able to set-up PRSA?

You have a good arrangement with your company whereby they put in 7.5% (I reckon you should try to push it up to 10% even if it means having to accept a lower salary increase than normal in return for the extra contribution).

In relation to your AVC, a standalone PRSA would be a good investment for you, with the obvious tax advantages that it brings (together with, as you said, ARF options at retirement).
 
CapitalCCC,
Hope to discuss the increase to 10% pretty soon (like at my annual review tomorrow!). I'll look at a PRSA...thanks
 
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