Possible to Change from Cornmarket AVC to Davy Select AVC-PRSA?

A

AnAthas

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Hi. As the title suggests I have an AVC with Irish Life through cornmarket. I was onto both Irish Life and Davy to see about moving the avc from one to the other. One of the parties thinks I can - the other party thinks I can because they are two different things.
Is this correct? is an AVC different from an AVC-PRSA even though both are going to be tied to by occupational pension?
 
You can separately set up an AVC PRSA with any provider. This will be linked to your employment. The employer is not involved in this process.
You could then cease payments to your AVC scheme and leave it parked.
You might be able to transfer the funds in your AVCs into your new AVC PRSA.
You could also continue to make payments to either or both schemes.
 
And doing what @bstop mentions might be a chance to get lower charges and maybe also a better choice of investment funds via the AVC PRSA. I always worry about charges when I see Cornmarket mentioned! ;)
 
Thanks. So, in summary AVCs are set up on your behalf by your employer and they do a PAYE type scheme handling all tax month by month - whereas a AVC-PRSA is set up by you where you do the depositing and settling of your tax at year end? But - is there a definite regulation somewhere against transferring all my cash in my AVC to the AVC-PRSA. They are both tied to my job/employer.
The hassle of handling two AVCs rather than one - and working out the lump sum etc when it comes to retirement. It's in everyones best interest if I can transfer over.
 
Employers are not involved in setting up any AVCs.

By definition, an AVC is a private arrangement between an employee and a pension firm / life assurer.

An AVC is tied to an employment, yes, but the employer is not involved in setting it up.
 
AnAthas said:
Thanks. So, in summary AVCs are set up on your behalf by your employer and they do a PAYE type scheme handling all tax month by month - whereas a AVC-PRSA is set up by you where you do the depositing and settling of your tax at year end? But - is there a definite regulation somewhere against transferring all my cash in my AVC to the AVC-PRSA. They are both tied to my job/employer.
The hassle of handling two AVCs rather than one - and working out the lump sum etc when it comes to retirement. It's in everyones best interest if I can transfer over.
Click to expand...
There are no regulations preventing you from transferring your AVCs to an AVC PRSA.
The employer does not have any input into an AVC PRSA. They will not know if you have one and they will not know how much money you are investing into it.
The only time the employer will have any knowledge that you had an AVC PRSA is when they are contacted after you retire, by the provider to get details of your salary in order to calculate your maximum benefits.
The employer does not take part in the contractual process of setting up an AVC.
Only the employee and the provider are involved. However the employer will be involved in the implementation of the ACCs as they must be notified in order in set up deductions from wages. Because of this they will be fully aware of the amount of money you are investing. This can be a disadvantage when seeking a pay increase from the employer.
There is no great hassle in having more than one scheme at retirement. The two providers will liaise with each other at retirement time to calculate your maximum benefits.
In my case I had both schemes. When I retired the AVC provider calculated my maximum lump sum entitlement. When the details were then sent to the AVC PRSA provider they calculated a higher lump sum entitlement. They told me that the AVC provider had not used the best approved calculation method. It could be to your advantage at retirement to have more than one provider involved.
 
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AnAthas said:
So, in summary AVCs are set up on your behalf by your employer and they do a PAYE type scheme handling all tax month by month - whereas a AVC-PRSA is set up by you where you do the depositing and settling of your tax at year end?
Click to expand...

The tax relief isn't difficult to sort out. Once you've set up an AVC PRSA you go to your Revenue online account and notify Revenue there. They send out increased Tax Credits to take account of your AVC PRSA to you and your employer and that's it. (Alternatively you can choose to leave it until the end of the year if you want and claim back all your tax relief in one lump sum. Some people view this as a form of short-term "savings" discipline - when you get the tax refund, pay for a holiday etc.)
 
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