Public Sector AVC or PRSA- go with Cornmarket or do it myself?

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charliebear

Registered User
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15
Hello,

I would appreciate any advice anyone can offer. I work in the public sector and am a member of the Single Scheme (the recent version). I only have a short amount of service and am not likely to hit any limits in terms of my contributions by retirement age. I have some pension built up in a couple of older schemes from when I worked abroad which are staying where they are. I am interested in setting up some form of additional pension for the following reasons:

1. To get the tax benefit as I pay a significant amount at higher rate and it is just a no-brainer not to be availing of this.

2. Retirement age from the Single Scheme is linked to state pension age so for me will be about 68 and I definitely don't plan to be working in the public service by then.

Can anyone advise whether I can set up an AVC and pay into this and draw on it prior to reaching pension age in the Single Scheme? I know I can apply for cost neutral early retirement in the Single Scheme but if, for example, I had left that employment and no longer worked for them, my understanding is that this would not be an option and I would have to wait until 68 to access the preserved benefits?

I have done a lot of reading on the options available to me, which mainly seem to be to either go through a broker such as Cornmarket and get one of their public sector PRSA AVCs and pay into this directly via payroll. My concern is that this is ultimately tied to the Single Scheme pension and my concern about locking this away until age 68.

The other option seems to be to go via a broker such as LAbrokers and sign up to one myself, but claiming the tax rebate separately from revenue (which I have no issue with doing as I do a self-assessment tax return each year anyway due to a small amount of self-employed income).

If anyone can offer any advice to me I would really appreciate it as I have read a lot but don't seem to be getting any clearer. I would be interested especially in any views people have in any pension products that can be accessed sooner than your late 60s and rules in relation to this.

Many thanks in advance.
 
charliebear said:
Can anyone advise whether I can set up an AVC and pay into this and draw on it prior to reaching pension age in the Single Scheme? I know I can apply for cost neutral early retirement in the Single Scheme but if, for example, I had left that employment and no longer worked for them, my understanding is that this would not be an option and I would have to wait until 68 to access the preserved benefits?
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No, the AVC (whether through Cornmarket or an independent broker) is linked to your main Single Scheme benefits. It has to accessed at the same time as the main scheme - whether this is at normal retirement age or via CNER.
 
Thanks so much Early Riser for taking the time to reply.

Is there absolutely no other way that I can fund any other type of pension product, while in the Single Scheme, that is not linked to it in terms of retirement age? It may be possible for me to get CNER from the Single Scheme but the issue is that I may not be actually working there at that point in time and so the Single Scheme benefits and potentially any AVC would both remain tied up until state retirement age. This is putting me off starting an AVC at all but I'm thinking there must be some other way?
 
Unless you can do something linked to your self-employed income - but this would be seperate from your main employment income. I realy don't know anything about that, but hopefully others can advise.
 
Thanks, I could possibly do that but my self-employed income is a few thousand per year whereas my main employment is much higher so the actual amount would be quite low. The large amount I pay in higher rate tax comes from my main employment.
 
Early Riser said:
Unless you can do something linked to your self-employed income - but this would be seperate from your main employment income. I realy don't know anything about that, but hopefully others can advise.
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You can make AVC PRSAs but as said above they must be linked to your main employment. (Are you sure that you cannot access the Single Scheme benefits until 68 if you leave earlier?)

Aside from that you're limited to a Personal Pension or PRSA as a percentage of your self-employed income. This assumes that your main income is <€115,000.
 
Thanks again for the replies. Just to clarify, I would be very happy to access Single Scheme benefits sooner under CNER. The issue is that I am currently in my 40s and may not continue to work for my current public sector employer until I reach retirement age, or even early retirement age (say 55 or 60). I have previously worked abroad and may do so again.

My understanding of the Single Scheme is that while an active member of the scheme, you can apply for CNER and it may be approved (say if I was still working there at age 55 or 60). If I was to leave this employment, my understanding from the paperwork is that my benefits are then preserved until the normal retirement age (68) so I can't get in touch at the age of 60 and ask for CNER when I no longer work there.

This has the double concern of me also not being able to access the AVC fund I have built up, which would be linked to the Single Scheme and also locked away until age 68.

I earn just under 100k so the amount I am paying in higher rate tax is incredibly high. We have in the last couple of years focussed on overpaying the mortgage (largely an emotional decision I realise) but I feel with the potential tax benefits I need to shift my focus to pensions. But I worry about the timescales for accessing it.
 
charliebear said:
My understanding of the Single Scheme is that while an active member of the scheme, you can apply for CNER and it may be approved (say if I was still working there at age 55 or 60). If I was to leave this employment, my understanding from the paperwork is that my benefits are then preserved until the normal retirement age (68) so I can't get in touch at the age of 60 and ask for CNER when I no longer work there.
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I am not too familiar with the Single Scheme specifically but, in general, in the PS if you resign your post then your pension is either preserved or you can take CNER - if you have reached the relevant age for the latter. The choice must be made at time of resignation. If you were to resign your post at 50 (say) then CNER would not be an option and you would be left with a preserved pension.
 
Thanks Early Riser, that's a good point, the other option would be to try to remain with a Single Scheme employer until the minimum age for CNER. In my version of the scheme, which is the recent one, this is age 55. It's just hard to know if that's going to be the case and seems like a bit of a gamble.

I am quite keen on the idea of an early semi-retirement, where I could have paid off the main residential mortgage, draw on some form of provision I've put in place for semi-retirement and do part-time work on a consultant/ self-employed basis as and when. I feel this, for me personally, is a more balanced and healthy way to approach things than working flat out in a stressful sector until I can make a switch to not working at all.

It looks like, bizarrely, I might be better looking at ways other than pensions to try to fund that mid fifties to mid sixties period but I will have to do this from net income with no tax benefits. I have fairly good provision from previous DB pensions for the old age years, along with the state pension.
 
Early Riser said:
I am not too familiar with the Single Scheme specifically but, in general, in the PS if you resign your post then your pension is either preserved or you can take CNER - if you have reached the relevant age for the latter. The choice must be made at time of resignation. If you were to resign your post at 50 (say) then CNER would not be an option and you would be left with a preserved pension.
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Very interesting, I’m currently a teacher on the single pension scheme. I am meant to work until age 68 but would love to retire earlier than that. Cost Neutral early retirement is an option from age 55 but would leave me with a tiny pension.

So if I was to resign at 55 I would have to choose between CNER and a preserved pension at this point? I had hoped to leave my permanent job but continue working 100- 120 days a year in a substitute capacity. If I took the CNER option what would have to my new pension contributions? Presumably if I don’t take the option my pension continues to grow (albeit at a minimal rate)
 
k06351000 said:
So if I was to resign at 55 I would have to choose between CNER and a preserved pension at this point? I had hoped to leave my permanent job but continue working 100- 120 days a year in a substitute capacity. If I took the CNER option what would have to my new pension contributions?
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If you want to avail of CNER you would have to take it at point of resignation - otherwise a preserved pension is the default option. You could look towards a career break and postpone your decision until your return. If you take CNER and return to work part-time you would be subject to Pension Abatement - although this is likely to be more theoretical than real, unless your combined pension income and subsitute pay exceeds the amount you would have been earning in your previous pensionable job. It appears that Abatement has been at least partially suspended in the education sector at the moment : https://www.education.ie/en/Circulars-and-Forms/Active-Circulars/0003_2021.pdf
 
If you decide to go abroad you could see if it was possible to transfer your AVC value to that country. There is a rule in pensions manual about not being able to transfer to avoid pension rules but if you genuinely move to another country you should be OK.
You could then decide to draw those benefits from that country, or move the value back into a buy out bond which could be accessible from 50/55+ with 25% tax free..

Food for thought...
 
Fresh-Start said:
If you decide to go abroad you could see if it was possible to transfer your AVC value to that country. There is a rule in pensions manual about not being able to transfer to avoid pension rules but if you genuinely move to another country you should be OK.
You could then decide to draw those benefits from that country, or move the value back into a buy out bond which could be accessible from 50/55+ with 25% tax free..

Food for thought...
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An AVC or an AVC PRSA is linked to the main scheme. A public service pension is not transferable as there's no fund to transfer. I would doubt that Revenue would permit the transfer of part of a scheme benefit to another scheme (in Ireland or abroad), thus separating it from the main scheme.
 
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