Now oversubscribd for public service pension with AVCs

I have worked in the public service (hospital) for 22 years. Because of the qualifications I had to obtain prior to securing my post, at age 65 I would have only 30 years actual service. For this reason I started to purchase 5.5 notional years about 10 years ago and also subscribed to AVCs about 7 years ago in order to obtain near enough a full pension at age 65. A few years ago I eventually obtained 5 professional years because of the time spent obtaining my qualifications. My pension advisor informed me that I am oversubscribed and that my professional added years and the years being purchased by me will provide a full pension at age 65. My question is, what can I do with the funds already invested in AVCs (€40,000) to date? Can I transfer these into my main pension fund as a lump sum to offset my ongoing buy-back of notional years? Will the AVC provider allow this? Any advice would be very welcome. Many thanks.

I very much doubt that you will be overfunded even if you are credited with 40 years service. At worst you can stop the AVCs and when you do retire you can use the accumulated AVC fund in a number of ways:

• Augment your tax free lump sum. Your State scheme will provide you with 150% of Base Salary. However Revenue rules allow you to get up to 150% of gross taxable earnings (incl overtime, allowances etc)
• If you still have funds left over you can improve the Spouses Pension. The State scheme will provide a Spouses Pension of 50% of your pension (i.e. 50% of 50%). Howver Revenue will allow a Spouses Pension of 100% of your 50%.
• Clearly maximising the tax-free lump sum is best, because you get back the additional amount tax free. After that you should be able to invest all balance of your AVC fund into an Approved Retirement Fund (ARF)

Get better advice.

Thank you Conan. Your advice is very welcome.

In addition, you can fund for the equivalent of the OACP, assuming that your pension is co-ordinated. In reality, it's hard to overfund if you're a public sector worker with an AVC/PRSA on the side.

Thank you oysterman.