They can as you suggested, use their AVCs to take out an extra private pension. This could be an Annuity or an ARF.
They can fund for the remaining 50% surviving partner pension.
What happens when an AVC is overfunded as in a case such as this ?The caveat here is that Class D/B public servants who retire at 60 with full service have relatively little room to manoeuvre with AVCs without risking overfunding (unlike their Class A PRSI counterparts).
I don't know how capitalisation is calculated here but they have a pension of 50% from age 60, a lump sum of 120/80 and provision for a survivor pension of 50% on retiree's pension.
What happens when an AVC is overfunded as in a case such as this ?
Is the overfunded amount drawn down in its entirety on retirement and taxed or does it go to an ARF and can be drawn down as required ?
I presume you mean at the high rate of 40%? Everybody is taxed at their marginal rate whether that's 0%, 20% or 40%.I would guess it is unusual in practice but you face being taxed (etc) at your marginal rate on any overfunding at retirement.
Good question, ClubMan. I am not sure in truth but I would guess it will be at 40% - to the extent that the amount overfunded got relief at this rate.I presume you mean at the high rate of 40%? Everybody is taxed at their marginal rate whether that's 0%, 20% or 40%.
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