Procedure for making AVC on existing pension?

D

dubguy

Registered User
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Hi,

I am 50 yrs old, mixed employed/self employed history, have had an old Canada Life/Now Irish Pension since my 20's but at very low premiums. Also have an Aviva pension from when I did a tax related contribution a while back, no longer contributing into that. I have outside savings that I will be mainly relying on for retirement, the pensions are mainly tax related. I have a couple of questions:

1. I have been exclusively self employed for the last couple of years and I'm doing my 2016 Income Tax return at the moment. This highlights that I am well short of my possible pension contributions. I would like to max this out for 2016 (so around an 18k extra contribution). Should I do this into one of the existing pensions? What is the process for this? Is there an input charge for this? I looked at the annual statements for both pensions and they seem to have a .75% fund charge but don't mention any charge on money in (which I assume is the contribution charge mentioned a lot on here?)

2. Should I move the Aviva into my main Irish Life pension?

3. Both pensions have had abysmal performance over the years. They seem to fall like a stone during recession and recover at a minuscule rate in good times. I have consistently earned more on my cash deposits than the main Irish Life fund has managed over the last 10 yrs, which seems crazy. Is this normal? Should I/Can I change funds in some way?

The Irish Life plan is called Annual Premium Personal Pension Master and the Aviva one is called Horizon Plan Personal Pension.

Any advice would be appreciated.
 
Putting my pedantic hat on, I have to correct the title of your thread. An AVC is an Additional Voluntary Contribution that is made to an occupational pension scheme ie paying more in than is required under the scheme rules. As you are self employed, it does not apply (it matters to ensure you invest in the correct pension product).

Anyway, back to your question, the amc of 0.75% is decent enough. You need to find out from your provider if you made a single premium top up, how much of that would actually be invested. Also, as you have such an old plan, are there any initial units... this is from the days when advisors took 60% commission. The insurance company had to make this back, so the plans had incredibly high management fees for a number of years, 5.5% per annum is the highest I've seen. The thing is, any new premiums also pay out high commissions (will be lower now due to your age) and any new premiums may get caught.

Where is your money invested? You may have invested in a poorly performing fund or moved it around. Usually when I see a 20 year old pension plan, the returns are pretty good. Another reason is that the charges might be pretty high. If you are only putting in a small amount, you may be having only 94% - 95% of your premium invested.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Hi Steven,

Thanks for that. I've never actually had any contact with Irish Life since the transfer over (other than them sending me stuff related to that transfer) so this was my first time contacting them. They offered contact details for my "personal adviser" who turned out to be a third party that they say is related to the adviser who sold me the pension in 1990. The name isn't the actual name of that adviser (who was a bit of a conman, got me to sign a blank sheet before I had made my mind up and then pushed that through without further consultation). Anyways, I asked could I just make a direct top up via Irish Life and I was informed "Former Canada Life products cannot be topped up" - yikes! What is that all about I wonder? I suspect I am going to have to talk to my "personal adviser", who I imagine has been sold my contact details and will be looking to spin me for a quid (googling the name suggests he is a tied agent for Irish Life/Canada Life).

Any further advice on how I could proceed without dealing with a tied agent would be appreciated.
 
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