Pension while probation

Alkers86

Registered User
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Someone I know is starting a new job and won't have access to the new pension scheme until after the 12 month probation period. Their existing pension is maxed up to the relief rates for their age so there is no scope for AVCs.

What are their options for retirement planning in the interim until the probationary period is over.

Early 30s.
 

rob oyle

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585
If they don't have scope for AVCs in their new role (not sure why, they can't have used to their age-related limit for the year in a previous job?), what kind of retirement planning would they want to do?
 

Alkers86

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41
I meant that they have been contributing the full 20% to their pension that they are entitled to claim tax relief on so they can't use the first year of income for any AVCs for last year as an example.
When their probation is up, they will again max-out their contribution to 20%.
I guess the easiest thing to do is for them to save for a year and then do an AVC once they get access to the new fund?
 

EmmDee

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198
Get them to check with their HR dept -what I have seen before is that new starters don't benefit from the company contribution until probation is over but could make their own contributions. It might be worth asking that specific question (if they haven't already)
 

Fergal19

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If above fails he could see if the company provides him with a PRSA? if not just set up their own and contribute to it?
 

fayf

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Get them to check with their HR dept -what I have seen before is that new starters don't benefit from the company contribution until probation is over but could make their own contributions. It might be worth asking that specific question (if they haven't already)
I was in this same situation, and i was allowed put in AVC’s until the probation was up. Ypu may be better soeaking with Pension Provider dorectly if possible, as its an usual situation, and HR may not be familiar with it
 

GSheehy

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I think there's a bit of confusion in this thread regarding the type of pension product/vehicle that Alkers86 friend can use.

AVC's are additional voluntary contributions to an occupational pension scheme. The two are linked.

If the person isn't eligible to join the pension scheme then they can set up a PRSA or Personal Pension (RAC) for the duration of the probation.

Yes, the employer should have a salary deduction facility whereby the employee can make personal contributions to a Standard PRSA when they're not entitled to join the main scheme for the probation period.

If the PRSA Scheme that's available has a contribution charge of 5%, they might want to consider setting it up themselves and claim the tax relief direct from Revenue.

At the end of the 12 months the employee can transfer the PRSA to the main scheme, if it's in their interest to do so ie check the charges and there's nothing wrong with having separate pension/PRSA pots of money.
 

fayf

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47
In my case, i was ineligible joing Company Pension scheme until 6 months of employment, but i contacted the pension company, and they advised me there was no issue, making AVC’s during this period, which i duly did, for those 6 months.

So, its worth checking, and making a phone to establish if this is possible.

Make a phone call, and eliminate any confusion and get clarity.
 
Last edited:

Sunny

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3,539
How are people allowed to make AVC's to an occupation scheme that they are entitled to join until they have 6 months service? Are you sure the pension provider didn't set you up with a PRSA. You shouldn't be allowed make AVC's into the scheme until you are a member.
 

EmmDee

Registered User
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198
How are people allowed to make AVC's to an occupation scheme that they are entitled to join until they have 6 months service? Are you sure the pension provider didn't set you up with a PRSA. You shouldn't be allowed make AVC's into the scheme until you are a member.
This is where the detail is important. Often you are eligible to join a scheme but the company may not make contributions until you have completed probation - or after a year - or whatever. That's really the detail which needs to be found out. It should be in the documentation for the scheme.
 
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