Put simply, an AVC allows you to make additional contributions towards your retirement benefits. At retirement you’re free, subject to the relevant Revenue rules, to use the money in your AVC to buy the retirement benefits you want. You must be a member of your employer’s Superannuation Scheme to be eligible to join the AVC Plan.
The sooner you set up an AVC the better. Over time, with potential investment returns and compound interest, you will be much better off than if you leave it to shortly before you retire.
An AVC can help you to fund for an early retirement by building up money in your AVC which you can then use to buy the retirement benefits of your choice, subject to the relevant Revenue rules. This may include taking a cash lump sum, investing in an Approved Retirement Fund or using it to purchase service from your employer.
Payments into an AVC are entitled to tax relief (at your marginal tax rate, subject to Revenue limits based upon your age and salary). For example, if you pay tax at a rate of 40% and contribute €100 to your AVC account, then the real cost to you is only €60. This is because you do not have to pay income tax on your AVC contributions so you are in effect reducing your income tax bill by €40.
When you retire you may be able to take part or all of your AVC Investment Account as a tax-free lump sum subject to Revenue limits. The amount you can take will be based upon a number of factors, including your salary on retirement, your years of service and any other pension benefits you may be entitled to.
Subject to a minimum of €50 per month and a maximum determined by Revenue based upon your age, salary and your other pension contributions (Superannuation and Additional Superannuation from January 2019) you can select how much you contribute to your AVC fund. You can stop, start or pause your AVC contributions whenever you like. Any change to your contribution amount may take up to two months to take effect on your payslip.
We’ve been helping Irish public sector workers since 1972, and so our dedicated experts understand your needs. We can advise how much you need contribute to your AVC in order to have the retirement you want.
Warning: The value of your investment may go down as well as up.
Warning: This product may be affected by changes in currency exchange rates.
Warning: If you invest in this product you may lose some or all of the money you invest.
Warning: If you invest in this product you will not have any access to your money until you receive your Superannuation Benefits.