Use AVC to retire at 60

T

Thisisme

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Hi I am looking at AVC options to set myself up for retirement at 60.


I recently joined the public service last summer 24. I'm currently 47.

My Plan/Dream

- Retire at 60.
- I will have 13 years done in the public service.
- Access my public sector pension & lump sum at 60.
- Access other private pensions at 60.
- Use an AVC to fund my retirement at 60

My main questions are these;
- What are the best options for AVCs?
- Who has best selection, least amount of fees etc?
- Should I go with Cornmarket, another provider, or find a AVC/fund myself and just submit to revenue.


So far I have spoke to someone in Cornmarket about an AVC and financial planning. Not impressed at all. Looking for a quick sale. Documents sent to sign the next day without a promised follow up call to discuss. I spoke to a nice lady from AskPaul. She was very helpful. Discussed a lot and was talking about the Zurich Dynamic fund as an option. However the fees seems big at 1.5% annually. A friend gave me the contact of someone in Cornmarket who he said was good. So I am to speak with them soon.


Grateful for any advice to help get me on track. Thanks
 
Did any of the salespeople you have spoken to so far discuss the possibility of buying referable amounts in the Single Public Service Pension Scheme with you? This is an alternative to AVCs. In effect you buy more benefits in the Single Scheme directly. There are pros and cons of doing this vs making AVCs and neither one is better for everyone, but in my opinion you should at least evaluate and compare the two before making your decision as to which is more suitable to your particular requirements.
 
1.5% is a very high yearly management fee.

If you are happy to chose your own funds and risk levels, you could get a lower cost 'execution only AVC PRSA' from a broker.
Some brokers offer both advice and execution only PRSAs.

Check out ferga.com, PRSA.ie and LABrokers.ie

Don't go directly to a provider, (Zurich, Irish Life, etc) a broker will set up an AVC PRSA from any of these providers at a lower cost.
The broker never has access to your pension payments. The payments always go directly to the providers.

So you are fully secure dealing with the broker.

You might get a better deal from these than from Cornmarket.
 
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LDFerguson said:
Did any of the salespeople you have spoken to so far discuss the possibility of buying referable amounts in the Single Public Service Pension Scheme with you? This is an alternative to AVCs. In effect you buy more benefits in the Single Scheme directly. There are pros and cons of doing this vs making AVCs and neither one is better for everyone, but in my opinion you should at least evaluate and compare the two before making your decision as to which is more suitable to your particular requirements.
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A potential con for the referral amount route is that the OP is proposing to take CNER at 60. So his pension will be reduced to about 80% - including the added pension from the referrals.
This is based on limited information though. The actuarially reduced Single Scheme pension at 60 may be a quite small amount. So what does the private pension amount to? Is the OP set up for a full State Pension at 66? The AVC from the Single Scheme years could at least bridge the gap until then.
 
LDFerguson said:
Did any of the salespeople you have spoken to so far discuss the possibility of buying referable amounts in the Single Public Service Pension Scheme with you? This is an alternative to AVCs. In effect you buy more benefits in the Single Scheme directly. There are pros and cons of doing this vs making AVCs and neither one is better for everyone, but in my opinion you should at least evaluate and compare the two before making your decision as to which is more suitable to your particular requirements.
Click to expand...
No that was not discussed. I would at least like to evaluate it based on my current scenario. The two people I spoke to so far were trying to sell me AVCs
 
Thisisme said:
Access my public sector pension & lump sum at 60.
Click to expand...

Surely a SPSPS member can't retire and acess pension at age 60?

EDIT: what I mean here is that normal retirement with pension is not possible at age 60.

It would have to be CNER, see next post.
 
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Protocol said:
Surely a SPSPS member can't retire and acess pension at age 60?
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From https://singlepensionscheme.gov.ie/...22/11/Updated-Member-Booklet_ENG-NOV-2022.pdf

Can I retire early?

From age 55, once you have completed the Single Scheme vesting period of 24 months, you can apply to your employer for cost-neutral early retirement. The early retirement benefits payable to you up to the date of your retirement will be based on the lump sum and pension amounts that have built up to the date of your retirement. However, your lump sum and pension will be permanently reduced to reflect the early access to your benefits. The rate of the reduction will be in line with actuarial rates approved by the Minister for Public Expenditure & Reform. Your age at retirement and the time remaining until your normal retirement age are the main factors in determining the reduction to be permanently applied.
 
I would hope that the advisors gave you a realistic assessment of what your CNER benefits would be at 60, as 13 years of SPS contributions, subject to a CNER reduction, will not be of significant benefit, I'm afraid.
 
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