Making an once-off AVC after being made Redundant

Hi,

I've recently been made redundant and would like to invest some of my redundancy in AVC's utilizing my AVC allowance for the prior (2015) tax year.

I assume I can no longer invest AVC's with my previous employer. I've just started working with a new employer but only on a fixed short term contract. I assume I could invest in AVC's via their defined contribution scheme of which I am a member or can I possibly invest via a PRSA?

I'd be grateful if somebody could confirm my lump sum AVC options and what would be the best choice if any.

Thanks in advance.

Yes, you can contribute to your new scheme (with a direct payment rather than through payroll deduction) if the rules allow and set against 2015 income before Oct 31 but subject to the usual limits depending on your age.
If your recent redundancy was in 2015 the taxable element of your redundancy is not available for pension tax relief. DC schemes tend to have lower annual fund charges than a PRSA. But the contribution charge may be higher than you could get with an execution only prsa . Check the bid/offer spread in the DC scheme.

You cannot invest in an pension in respect of income from your old employer. Any AVC payments related to that employment, has to be made prior to you leaving that company. If you have any earned income from after leaving them, it goes into a personal pension plan.

With your new employer, you can make AVC payments relative to the income you have earned from them. You can do it through their scheme or through a PRSA AVC plan. Ask the HR dept what the charges are to make an AVC. Some employers cover the pension costs for the scheme members, making it very cheap to make AVC payments.


Not too many contracts with bid/offer spreads these days Joe.


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