Key Post The Single Public Service Pension Scheme

@Ent319

From my calculations you can get better value going the PRSA AVC route but I like your approach because by choosing a mixture of funds that amount to a low weighted AMC you get the convenience of the AVC route (AVCs via employer payroll deductions and tax relief sorted) but still have relatively low overall fees.

Can I confirm how you calculated your weighted AMC?

70 % Indexed Ethical Global Equity / 20% Indexed Emerging Markets Equity / 10% Indexed Fixed Interest.

Indexed Ethical Global Equity fund - (0.75% AMC)
Emerging markets - (0.65% AMC)
Indexed fixed interest fund - (1% AMC)

Weighted average AMC across all funds will be:
0.75% on amounts <€40,000
0.5% on amounts between €40,000 and €140,000
0.25% on everything above €140,000.

Calculation:
70% of 0.75 = 0.525
20% of 0.65 = 0.13
10% of 1.00 = 0.1

0.525 + 0.13 + 0.1 = 0.755 (AMC on amounts < €40,000)

As an alternative, Standard Life offer a PRSA AVC. All their funds you can invest in have AMC 0.9% that is reduced to 0.4% once the value of your pension pot is > €100,000. The 0.4% applies to all of your money not just the amount in excess of €100,000.

The Cornmarket/Irish Life sliding scale AMC looks appealing but the first €140,000 of your money is always being "taxed" at an AMC that is higher than you could get via the PRSA AVC route and that will add up to many €1,000s over a long time frame.

But I agree your approach might be a best compromise for convenience sake. With an AVC fund you also have the certainty of being allowed to used "part of it" to purchase additional Single Pension scheme benefits at retirement and not have to forfeit any remainder of the fund. That option might appeal to those who are more risk averse and won't come close to having "full service".
 
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Hi @CharlieMac,

Your methodology for working out the weighted AMC is correct (I rounded down a bit) but I disagree slightly with your conclusions.

To get to the €100,000 on the Standard Life option (to get the rebate) most people would have to save in an AVC / AVC PRSA subject to fees unless they were starting with a very large lump sum / had lots of tax relief to use up.

If they started their pot in a SL PRSA AVC they could be at 0.9% AMC for a fairly long time and this is much higher than the starting AMC available on some of the Cornmarket products. We've established that members of the AHCPS scheme can get the world equity indexed fund at 0.65% AMC with the tiered reductions scaling down to 0.15%, for example.

Even taking 0.75% base AMC on a Cornmarket product as an example: SL is slightly ahead on fees from €100,000 to €300,000 but after that Cornmarket pulls ahead. So at €200,000 fees on SL are €800 and Cornmarket is €940. Flashforward to €300,000 and its €1200 for SL and €1200 for Cornmarket. Every year after that Cornmarket wins.

So it depends on your starting sum, how much you're putting into your pension and how fast you plan on getting it in there.

If someone's employer belonged to a public sector scheme with Cornmarket that didn't have good index funds around 0.8% or less, Royal London via Execution-Only would be the clear winner over Standard Life in my view to start off an AVC. The person could decide later whether they wanted to switch out of it to the SL product.

Edit: The compound interest calculator here is pretty good for guesstimating how big your fund might be for certain periods of time based on how much you're putting in.
 
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I am surprised AHCPS is slightly different than the others.

I thought they are all under the same scheme such as Forsa etc.
 
Looks like there might be a bloodbath in the stock markets over the next while.

If there is, statistically speaking, probably a great time to start your AVC if you haven't yet!
 
Related to the topic so thought Id share my current AVC experience (AHCPS via Cornmarket):

I'm new to the Civil Service and recently signed up for an AVC on an execution-only basis and selected the Indexed World Equity Fund. Just received the first documentation:
  1. AMC: 1%
  2. Bid/Offer Spread: 5%
  3. Extra Allocation: 5.26%
  4. Allocation Rate: 100%
The spread and extra allocation seem to roughly cancel each other out but I'll be honest I never heard of this before now, assume it's standard?

I'm not sure if I've missed a trick in terms of the previously mentioned 0.65% AMC with the AHCPS scheme, and now considering cancelling and going 'claim the tax back myself route' if I can even do that (deductions not started yet).
 
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Hi @JSF221,

That's strange. I know someone personally that's invested via the AHCPS scheme and is currently receiving the Indexed World Equity Fund at 0.65%.

I can only think of a few things that might have happened:

* Not to insult your intelligence: are you mixing up being an AHCPS union member vs. being invested in the AHCPS scheme? The scheme you get depends on what scheme your employer has signed up for and not what union you belong to. So you could be an AHCPS member but your employer could be signed up to the Forsa Scheme or some other scheme.
* Perhaps your employer has signed up to an older version of the AHCPS scheme? Is there any reference to the tiered AMC? (like here).
* Has Cornmarket put you into a different version of the fund with a similar name but a different AMC?

The suggestion is that before you set up an AVC you email Cornmarket for a list of the available funds and their AMCs on the scheme.

Don't know about the bid / offer spread and extra allocation stuff. Haven't seen / heard of that on other schemes.

You should have a cooling off period you can exercise without charges. You could do this ASAP and then clarify the situation with Cornmarket.
 
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Thanks for the input @Ent319. Documentation does state plan name as 'AHCPS AVC Plan' and employer name as 'AHCPS'. I sent them an email earlier for some clarification on it so I'll report back when I hear from them at some point next week.

When I emailed them originally I was advised that all funds and AMCs were only available on their website and they couldn't share via email. Having read the more recent part of this threat that does appear to be incorrect.

I'd also like to just say thanks for putting this thread together - I've found it so helpful in getting my head around the single scheme.
 
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My wife recently joined the public sector and was speaking to Cornmarket yesterday about setting up an AVC (Forsa one). Armed with knowledge from this thread, she asked about fund options outside 'Balanced', 'Adventurous', 'Cautious' etc. The Cornmarket rep confirmed on the phone and subsequently by email that there were only three fund options available. Trying to figure out if she just got a misinformed Cornmarket rep or if there has been a change in the funds available. If limited to the three funds referred to, I think she will be looking at the Royal London PRSA AVC route.
 
Does anyone know what the "+" means in the €2,150,000 allowance is when calculating pension fund allowance? Does it mean whatever the SFT is at the time?

I'll have 30 years of Sláintecare consultant contributions by the time I retire - which capitalise at approx €2mil.
Male with spouse (not working currently)

I am not sure how much AVC contributions I can make beyond that.
 
Seaniemed said:
Does anyone know what the "+" means in the €2,150,000 allowance is when calculating pension fund allowance? Does it mean whatever the SFT is at the time?

I'll have 30 years of Sláintecare consultant contributions by the time I retire - which capitalise at approx €2mil.
Male with spouse (not working currently)

I am not sure how much AVC contributions I can make beyond that.
Click to expand...

What year will you be retiring? The Standard Fund Threshold is increasing from 2026 onwards - going up to €2,600,000 over the course of a few years and then due to be inflation-linked after that.
 
They would. I'd keep an eye on (Capital Value of HSE benefits + AVCs) every year or so to make sure you're not at risk of going over. If you get too close, you can always stop paying AVCs and switch to a cash fund.
 
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