Single Public Service Pension Scheme shortfall AVC the solution?

moolah

moolah

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I started in the public sector in 2016. I plan to retire at 66. This will give me 33 years service, leaving me with a shortfall on my lump sum and my pension. I am thinking of starting AVC's. Cornmarket seem like the easiest option for a public sector worker. I want to get advice on how much I should pay in to my AVC's monthly and I would like to know if there is any other options for me apart from cornmarket that require little effort. Cornmarket have a 600 euro consultancy fee but I have found a NO ADVICE form which can be filled out yourself for €100. I looked through this form and there are a few questions that I would need help answering so I do not think this is an option for me. Also Cornmarket have three funds to invest in I have 26 years left in work so I am thinking of choosing their highest risk fund. Do you think this is a good idea?

Cornmarket fees:

No Advice Form:

No Advice AVC Application Form | Cornmarket

Set up your AVC without expert advice by downloading and completing a No Advice AVC Application Form today.
www.cornmarket.ie www.cornmarket.ie
 
Also look at Lyons financial, they will do an execute only AVC with 98% allocation I think. But if you're not comfortable in answering the questions I would advise you get professional advice from somewhere. It's not only Cornmarket who can advise on public sector arrangements so shop around.

Is the Cornmarket 100% allocation after the €100 fee? If you contribute circa €200 per month or €2,400 for the year, then the €100 fee works out around 4.16%. I cannot make out if any other charges are taken and you'd want to be sure of that.
 
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moolah said:
I want to get advice on how much I should pay in to my AVC's monthly and I would like to know if there is any other options for me apart from cornmarket that require little effort.
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You can go to any broker of your choice to set up a PRSA-AVC. This is the equivalent of a standard AVC offered by Cornmarket except that you pay by direct debit rather than salary deduction. You then claim the tax credit via your MyRevenue online account, and your take-home pay will be adjusted accordingly. You can shop around for costs - or some offer the advice-free option. I believe some on here have used these (https://www.labrokers.ie/avc-for-public-private-sector/) but otherwise I know nothing about them.

As you appear to be at just approaching 40 the maximum you can contribute to a pension (and get tax relief) is 20% of salary if you are 30-39, or 25% if aged 40-49, inclusive of what you are already paying to the main scheme (excluding the ASC). So that is one limit. Do your own sums on how much you have left to play after the main scheme contributions.
You should also take into account your current tax band. How much (if any) of your current salary is taxed at the 40% rate? I would be inclined to use this as another limit, ie, pay no more than you can claim tax relief on at 40%. You can always increase the amount later if you want.
Also consider you current budget and any other priorities (eg, a house). This is another limit you need to think about. It is good to start now but not to beggar yourself in the process. Remember that you will pay tax on the pension drawdown also (excluding the lump sum).
 
Thanks for the replies. I think i need to get some more precision on my figures. Is there an online excel spread sheet or google spread sheet that can work out my lump sum and pension?
 
moolah said:
Thanks for the replies. I think i need to get some more precision on my figures. Is there an online excel spread sheet or google spread sheet that can work out my lump sum and pension?
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There is an online estimator tool, it’s not great but will give you an approximate idea, Google single scheme estimator. You should also receive an annual benefit statement, contact NSSO through Peoplepoint if you haven’t.
 
moolah said:
Thanks for the replies. I think i need to get some more precision on my figures. Is there an online excel spread sheet or google spread sheet that can work out my lump sum and pension?
Click to expand...

Like Tomandgerry says, it's only going to give you a rough idea. You have a long time to go between now and retirement so that renders its output even more moot.

You can also make once off annual lump sum contributions to your SPSPS pension. This might be worth looking into, as well as the AVC angle.
 
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