Prime Time on public service "Union appointed avc providers Vs Notional Service"

Re: Prime Time on public service pensions

This programe absolutely terrified me last night, im sure this was probably part of the agenda.

I signed up to an AVC in july following a meeting with a cornmarket "financial advisor".
they should not call their sales person this in my opinion. if they are actively selling AVC's and pointing out only the negatives of NSP, how can they call themselves financial advisors. all they are are salepersons who want to push their own product at you.

i am very scared now as i am not very clued into the complicated schemes for pensions available, and i took the cornmarkets title of "financial advisor" literally thinking they were doing the best for me in my situation.being only 29 and teaching 6 years, retirement is a long way away.

does anyone know how easy / hard it is get out of this schmee and what i stand to lose if i do? at least im only 4 months in.

also can the NSP allow for anyone wanting to retire before 60? my AVC is set up to allow retirement at 53. so in my sitaueion do i have no choice but to stick with cornmarket in order to retire early with full pension?

any advice would be really appreciated as the information out there is so mind boggingl!!!!!!!!
thank you all

Re: Prime Time on public service pensions

I believe there is a fundamental point that was missed in last night's programme and in the discussion here so far.

I have no interest or otherwise in the Cornmarket group but do work in pensions.

Public servants with many years service will generally have a decent guaranteed State pension. Rather than buying back years, when asked by public servants, I suggest that the AVC method is worthy of serious consideration due to the option to invest in the post-retirement ARF regime.

The state pension dies with you, the ARF is a piece of family wealth that passes on to one's kids.

So if there's already a healthy guaranteed pension in place, why not look to a tax efficiently long term savings plan instead.

There's a danger that this very important piece of information will not get out there and that thousands of AVC holders will pull the plug now (when equity prices are on the floor).

Regards,

Rocy1

Re: Prime Time on public service pensions

My other half is a teacher and I work for a semi state. Cornmarket have been over to advise her a couple of times on various issues. In fairness, I found them very useful when we were looking for a mortgage, the really took out a lot of the legwork for us. I obviously checked out the advice we were getting myself and found what they advised us to do and the deal we got to be the best on offer at the time, and even since then they have given us further advice on this kind of stuff.
I am however always skeptical of any advisor(s) who are tied in with a union and often wonder how these guys manage to keep the same deal with the unions for so long, are the Unions getting a slice of the action?

A guy called around a few weeks ago for a financial review and in fairness the advice he gave was good. I just started buying notional service (not much but enough to give me a full pension) and also took out some salary protection cover, as well as applied for a couple more tax credits I was unaware I could claim for.
He did explain the ins and outs of the AVC products they had to offer and advised it was very tax efficient to put money into one. I can see that it would suit some people but belive there are better AVCs on the market than those which CM are pushing.

One other thing, which the stock market is well work buying into (with the right products at the moment), you do need to be putting in a lot of cash in the first few years (while the market is low in order to benefit from any rises) and in fairness in these times people have less money to put into these types of long term savings schemes.
Again, as with any advice you get from anyone, it is always best to research it elsewhere before you sign up on the dotted line (as I have learned the hard way).
As mentioned the thing which will anger many here is the fact that the Unions are getting paid a lot of money to look out for their members. In this instance it appears they are getting more money from CM to keep up the friendship and the Unions appear to have lost track of why they exist in the first place (not as a profit making organisation).

Kippy

Re: Prime Time on public service pensions

What I don't like about these AVCs is the charges:

(1) Approx. 400 euro set-up fee [EDIT: it may be possible to avoid this by self set-up]
(2) 5% charge on each and every contribution - that is a SAVAGE charge in my opinion
(3) the usual 1%-1.5% annual management charge
(4) the DES charges 1% to collect the deduction [EDIT: this no longer exists]

What I want is an AVC with ZERO entry charges and 1% AMC.

Re: Prime Time on public service pensions

Rocy1,
A good point.

If you already have a base pension (a guaranteed income), even if based on short service, the AVC route offers options that the Notional Service route does not:

• Maximising the tax free lump sum only (as earlier)
• Investing the balance into an Approved Retirement Fund, rather than buying an annuity (a guaranteed pension).

The difference between "pension" and "retirement benefits" is that with the AVC route there are more options than just buying pension (the point I think that the Cornmarket guy tried to make).

It is complicated, there are a number of issues to be considered and personal circumstances will vary. So advice (good advice) is necessary and that can take time (more than the two minute clip in an ambush job).

Again, I have no connection to Cornmarket, but I do wish that programs such as this would be more balanced rather than trying to be sensationalist. Both the AVC and the Notional Service routes are valid options. Neither is always the best solution.

As to HGF, I would be questioning why you would be doing AVCs since you appear to qualify for full service. AVC funding to "early retire" at age 53 is not that simple. I would question if this is allowed under the Public Service scheme. Normally you cannot fund for additional benefits (where there is no shortfall based on normal retirement age) on the assumption that you might retire early. Maybe the Public Service rules are different, but that is not possible in the private sector. I suggest that HGF should clarify this with Cornmarket.

Re: Prime Time on public service pensions

As far as I know with the Nsp scheme that you do not have the option to retire early you have to choose whether it is 60 or 65, so for those of us wanting to retire earlier this seems unfair. Another point is that when you buy nsp, you are buying 5 benefits, Pension, Lumpsum, Childrens pension, Spouse pension and Lump sum, all I want to do is buy the pension and lumpsum, so you have to pay for all 3 of the others which makes no sense.

So what if you are single, have no children have a partner but not going to get married, we are paying for benefits which are no good to us.
If you are married and when you die your spouse gets half of your pension, if they pre decease you when you die all those contribution you made to nsp for all those years die with you.

Even if you have children nothing goes to them. At least with an avc what ever you have put into it along with the tax breaks it goes to your estate. This was explained to me very clearly by cornmarket and the avc was the way for me to go.

Re: Prime Time on public service pensions

They are anything but advisers, they are 100% salespeople (though they are encouraged to pass the QFA exams). There is a huge axe dangling over their heads, if you don't make your targets you are gone. If you do make your targets, you make a fortune, we are talking 6 digits here.

So there is absolutely no hope of getting impartial advice off these people, they will lose their jobs if they go around advising people to take the NSP route. Cornmarket has a monopoly. What do companies do when they are in a monopoly and are unchecked? They abuse it. They are very good and greasing the wheels of the unions with sponsership. The usual gombeenism.

You should be getting onto your unions about this first and foremost. This cosy arrangement is benefitting the unions and cornmarket at the teachers and nurses expense.

Re: Prime Time on public service pensions

Protocol said:

What I don't like about these AVCs is the charges:

(1) Approx. 400 euro set-up fee
(2) 5% charge on each and every contribution - that is a SAVAGE charge in my opinion
(3) the usual 1%-1.5% annual management charge
(4) the DES charges 1% to collect the deduction and pass it to Cornmarket / Marsh / Irish Life

What I want is an AVC with ZERO entry charges and 1% AMC.

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Hi Guys,

I commend Conan for actually taking the time to discuss some of the many differences between NSPs & AVCs.

Just a point on the charges... There is no deduction charge applied by the DES & this 1% fee has not existed since 2003.

Also there are options to do these AVC schemes on an Execution Only option therefore not incurring a 'set up fee'.

Re: Prime Time on public service pensions

Fair enough, the 1% DES charge is gone.

But what kills me is 5% of each and every contribution.

You would never deposit 100 in a bank if they charged you 5 euro before they added interest!!

Re: Prime Time on public service pensions

I seem to remember Quinn being the company recommended somewhere else on this site as one with the lowest charges. No absolutely sure about this. Maybe someone else can point in the right direction.

Re: Prime Time on public service pensions

dillage said:

Hi Guys,

I commend Conan for actually taking the time to discuss some of the many differences between NSPs & AVCs.

Just a point on the charges... There is no deduction charge applied by the DES & this 1% fee has not existed since 2003.

Also there are options to do these AVC schemes on an Execution Only option therefore not incurring a 'set up fee'.

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if your talking about the cornmarket group avc schemes the execution only option avoids the setup charge but still incurs the 5% contribution charge

mula said:

15 mins was not enough to cover this topic and will probably leave ppl more confused then informed. imho nsp's are not the best solution in all cases as was potrayed by the program.

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Bronte said:

Are all civil servants a member of a trade union? Even if they are why do they have to deal only with a particular agent? Is this not anti competitive?

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Hi Bronte, this is the perception with the majority of civil servants however it is far from the truth, Cornmarket, may be the recommended agent by the unions but a civil servant is not obliged to use them, in fact those that I know have received biased advice and Cornmarket are simply commission driven on multi sales, a pity it is only coming to light now !! There are many good and professional brokers in the market place that look at the clients individual needs. Cornmarkets days are numbered hopefully !

Re: Prime Time on public service pensions

Here's my brief summary, for what it's worth. Lest there be any question of conflict of interest, I'm a broker.

• NSP offers guaranteed benefits, which are index-linked. This is hugely valuable.
• NSP isn't suitable for all people for a variety of reasons. You may have short service and want to increase just your tax-free lump sum. You may want to fund for early retirement. You may want to invest the proceeds in an Approved Retirement Fund. These (and other reasons I have come across) would make AVCs preferable to NSP.
• Anyone considering putting extra money into their public service pension should only do so having carefully considered both the NSP and AVC options in the context of their individual requirements. The potential conflict of interest arises in that a broker can get paid commission for selling an AVC but the NSP scheme does not pay commission to brokers, including Cornmarket.
• Most brokers operate either on commission or on a fee in lieu of commission. Cornmarket appear to be paid by both methods. I've heard arguments that the extra charge can be justified by the complexity of public service pension arrangements. I don't accept this. Private sector pension planning can be a complicated business also, but most brokers just charge either commission or a fee, but not both.
• Cornmarket have an advantage that their AVC product gets deducted directly from salary, thus offering you immediate tax and PRSI relief. If you choose an AVC outside of Cornmarket, you claim your own tax and PRSI relief. Usually, you claim your tax relief once and your tax credits are adjusted.
• Until fairly recently, Cornmarket had a monopoly on all AVC schemes that they operated. They still have a monopoly on salary deduction AVC schemes in the areas they operate. Given such a huge captive market, you'd think that they would have hammered out a unique low-charge deal with Irish Life using volume of business as leverage. In fact the charges are higher than comparable AVCs individuals can buy elsewhere. Cornmarket charges used to be higher still.

If you want information on a Ford, do you go to a Nissan dealer?

AVC's are sold by the brokers, NSP's are sold by the dept. If you go to a specific bank they will tell you about their products. I did an AVC because I'd turn in my grave if I died before 78 after paying into NSP's. All my contributions would go back to the government. When I looked into it I would have to live until I was 78 to see a return from NSP's. What a risk.

The costs for AVC's may be high but look on all banks websites. 99% have the 5% and 1% so they are all the same if you ask me. When I was younger my money was scarce so the AVC let me put in what I choose. NSP's are set, fixed and won't let you retire before 60 or 65 if you started teaching after 2004.

Can anyone remember Eddie Hobbs telling a Bus Eireann bus driver on one of his programs a while back to set up an AVC.........."it was sound financial advice" now you tell me, what is his game? I don't trust any of them especially him. This is not the first time I've seen him stir dung.

AVC's suit me down to the ground and trust me, I spent months looking into it.

Interesting to see that the defense of Cornmarket has come from brand new posters who just registered today.

�� retire early (before normal retirement age)
�� fund for additional benefits over and above those from the Superannuation Scheme
�� retain control in retirement of the money they have built up in their AVCs
�� increase their family wealth in retirement

If you or any of your colleagues have queries about their AVC plan we will be only too happy to answer them. They can contact us on 01 4084000 and selecting Option 1. Alternatively, if they would like to talk to one of our consultants in person in their workplace or home we’ll be pleased to arrange this for them. [FONT=Verdana,Verdana]
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tmurr said:

Look at this. I feel happier now. Look at the pension regulators response.​

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I had a consultant call me on the phone today and after he explained things to me i feel happier. We are a nation of sensationalists and as this is the only site where this discussion is taking place I had no option but to respond. My advice - don't believe anyone including websites. Do your own investigation work. I did.

Why is Eddie Hobbs wheeled out as if he is a "National Authority on Everything"? It's ridiculous.

tmurr said:

I had a consultant call me on the phone today and after he explained things to me i feel happier. ...My advice - don't believe anyone including websites. .

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Hilarious. It's great to see the newcomers to Askaboutmoney posting such funny posts.

Don't trust anyone except the Cornmarket salesmen, sorry consultants.

Brendan