A Single Premium Additional Voluntary Contribution (AVC) helps you to maximise your tax free lump sum before you retire and avail of any tax relief available to you.
There are many reasons why it might be right for you, for example if you have:
At retirement you will be entitled to a tax free lump sum as a result of your service and salary, as part of your Superannuation Scheme.
However, due to many different reasons this may be less than the maximum tax free lump sum Revenue allows you to fund for. If there is a shortfall between your Superannuation and Revenue entitlements then here is where you can take advantage of a Single Premium AVC.
Your Cornmarket consultant will calculate your scope for a Single Premium AVC using either the Superannuation Maximum formula or the Revenue Maximum formula depending on your personal circumstances i.e. how much money you have available to invest, years of service etc.
If you do not already have an AVC which will maximise your tax free lump sum on retirement then a Single Premium AVC may indeed apply to you.
Most Single Premium AVCs are invested in a Cash Fund, which minimises the risk but does not offer 100% security. The short term nature of these investments should also be taken into account as most Single Premium AVCs are drawn down within two months of retirement.
Superannuation Maximum estimates the shortfall in your actual lump sum and the maximum you could have received from Superannuation (i.e. with 40 years or more of service). If using the Superannuation Maximum formula, the following will be taken into account:
Revenue Maximum estimates the shortfall between your Superannuation and Revenue Maximum tax-free lump sum entitlements at retirement.
Revenue Maximum entitlement takes into account other elements which Superannuation Maximum does not.
If using the Revenue Maximum formula, the following will be taken into account:
Here's an example:
Public Sector pensions are our forté, we know them better than anyone else. We’ve been helping Irish public sector employees since 1972 and we're here to help you plan for your future.
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.
*€595 fee plus 4% contribution charge. An annual management charge will also be applied by the insurance company. The typical charge is 1% per annum. Please note: The charges above are correct for most of our AVC Schemes. Actual charges for your AVC Scheme will be confirmed by your consultant.