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AVC and Pension planning for 2014 onwards

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  • 23-10-2014 9:14pm
    #1
    seekingthetruth
    Registered Users Posts: 32 ✭


    Hi,
    Im a teacher working on my first year that will hopefully lead me to CID.

    Im just gone 35 and have been teaching since Jan 2006 on various different contracts (maternity, career breaks, secondment).

    I recently had a meeting with a man from Cornmarket and he advised me to open an AVC to make up the shortfall in my pension because of being down in years at retirement. I have found older threads on here but because I am a "post 2004" entrant into teaching I dont know whats best for me.

    I have been looking on boards.ie and the feedback is not good for cornmarket or AVCs and I am very unsure of what to do?

    Anyone able to advise me?

    Its hard to find someone to trust to tell you the truth
    Thanks


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    #2
    rainbowtrout
    Registered Users Posts: 15,381 ✭✭✭✭rainbowtrout


    Very hard for anyone here to provide financial advice without knowing all of your circumstances.

    But at the same time, just based on what you have posted.

    Post 2004 teachers have to do the full 40 years to 65 if possible. No early retirement option, or rather, no early retirement and getting your pension at 60 etc. Minimum age for retirement is 65 with no upper limit.


    So the question should be:

    If you have been teaching since 2006, have you been teaching consistently and working up your years of service, getting your increments etc. What you have said about maternity leaves, career breaks etc would indicate that you have.

    I'm working off the assumption that you have been working solidly for 8 years since 2008 and started teaching therefore at 27.

    27 + 40 years for full service = 67 at retirement with potentially full service.


    From ASTI website:
    http://www.asti.ie/pay-and-conditions/retirement-pensions/retirement-options/
    Compulsory retirement age for teachers who commenced teaching before 1st April, 2004 and whose service is not interrupted for a period greater than 26 weeks is 65, i.e. teachers must retire no later than the end of the school year in which they reach their 65th birthday. Such a teacher, if a member of the superannuation scheme, would receive a pension based on the number of years he / she was a member of the scheme, e.g. a teacher aged 65 on a salary of €60,000 who was a member of the superannuation scheme for 40 years would receive a pension of 40 eightieths of salary, i.e. €30,000 and a tax free lump sum of €90,000.

    For those teachers who came into the system after 1st April, 2004 the present compulsory retirement age of 65 has been removed enabling them to remain longer in work should they so wish, subject to suitability and health requirements.


    Also :

    The minimum retirement age on "full" pension for teachers who came into the system on or after 1st April, 2004 is 65.


    So based on the above information, and also the assumption that you have worked full hours for the last 8 years since 2006, if you choose to retire at 65 which is the minimum age you can go, you will have 38 years service.

    You can continue to 67 to get full service. If you have had gaps in service in the last 8 years you will have to allow for that in your calculations.

    Whether you choose to buy back years/ invest in AVC will have to take that information into consideration, how much you want to retire on, and what your own personal circumstances are.


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    #3
    2011abc
    Registered Users Posts: 1,661 ✭✭✭2011abc


    Wrote a long reply and it seems to be gone .Long story short , how in the name of God is any teacher going to be able to work at age 60+ at the rate things are going ?Theyre retiring in their droves early -often due to mental health reasons- having served 70-80% of their time in relatively relaxed conditions .
    They government must surely be deliberately conspiring to prevent teachers getting anything like a fair pension while feeding desperate , unemployed NQts into the meat grinder of an increasingly onerous occupation .50% dropout rate in England in first five years ...


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    #4
    rainbowtrout
    Registered Users Posts: 15,381 ✭✭✭✭rainbowtrout


    2011abc wrote: »
    Wrote a long reply and it seems to be gone .Long story short , how in the name of God is any teacher going to be able to work at age 60+ at the rate things are going ?Theyre retiring in their droves early -often due to mental health reasons- having served 70-80% of their time in relatively relaxed conditions .
    They government must surely be deliberately conspiring to prevent teachers getting anything like a fair pension while feeding desperate , unemployed NQts into the meat grinder of an increasingly onerous occupation .50% dropout rate in England in first five years ...

    I don't think ranting really helps the OP.


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    #5
    solerina
    Registered Users Posts: 2,435 ✭✭✭solerina


    OP
    One thing to be aware of is that your actual pension upon retirement must be a certain amount to enable you to actually access your AVC. This is a problem if your retire before 68 for many people (ridiculous that we cant access our full pension at retirement, and apparently the supplementary pension to cover the shortfall was done away with in 2011). I could be wrong but I would be surprised if you meet this minimum until you also get the OAP at 68. If this is the case for you then you would be better off opening a savings account and putting your money in there.


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    #6
    seekingthetruth
    Registered Users Posts: 32 ✭seekingthetruth


    Let me list my service:
    Jan 06 to May 06 - Sick Leave 21 hours per week
    Sept 06 to August 07 - Career Break 18.5 Hrs
    Sept 07 to May 08 - Maternity 21 Hrs
    Oct 08 toMay 09- Maternity 20 hrs
    Sept 09 to Mid Nov 09 - Maternity and Sick Leave (then unemployed for 3 months.... :( )
    Mid Feb 10 to May 10 - Sick Leave 22 hrs
    Sept 10 to May 11 - Maternity18 Hrs
    Sept 11 to May 12 - Maternity 21 Hours
    Sept 12 to August 13 - Fixed Term 19.5 Hrs
    Sept 13 to August 14 - Fixed Term (Secondment) 17.5 Hrs
    Sept 14 to Date - 18.5 Hours RPT

    Im told that I will receive 40% tax relief on whatever I put into AVCs on my earning at the high rate so my PAYE will drop by €40 a fortnight and I put in €98 so overall its €58 a fortnight

    If anyone thinks I have posted too much personal info please tell me and I will remove it, I regard this to be an anonymous forum but am open to correction.

    Will an AVC beat inflation and will it grow? Do I contact the Dept to see am I eligible for NSP ?
    Who else can offer AVCs and are trustworthy to provied them/manage them without charging fees?


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    #7
    rainbowtrout
    Registered Users Posts: 15,381 ✭✭✭✭rainbowtrout


    To be fair you haven't put down any location/subjects so it wouldn't be all that easy to identify you.

    You also have been consistently employed since 2006 except for those 3 months you mentioned. It might be worth contacting the Dept to find out what that equates to in terms of years towards pension, so you can see how many years you have to do in total.

    On the financial end of things, I can't offer a whole load of advice. I have an AVC but I'm pre 2004.


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    #8
    man_no_plan
    Registered Users Posts: 1,018 ✭✭✭man_no_plan


    http://www.cspensions.gov.ie/modellers.asp
    Have a look there op and see does it help. It left me feeling very depressed....

    Mod might hyperlink it, wont let me.

    Hyperlinked..


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    #9
    solerina
    Registered Users Posts: 2,435 ✭✭✭solerina


    man_no_plan wrote: »
    cspensions.gov.ie/modellers.asp

    Have a look there op and see does it help. It left me feeling very depressed....

    Mod might hyperlink it, wont let me.


    Thanks for that link...fairly depressing stuff, esp when I hear so often what a great pension we have. Isnt so great if you retire before 68 (a lot of money missing when you cant access the OAP)


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    #10
    evolving_doors
    Closed Accounts Posts: 11,812 ✭✭✭✭evolving_doors


    Consider the option of keeping the ball of money yourself!
    Yer pension might be pittance but possibly balance that with having a mortgage paid off earlier and possible second property paying for itself , plus maybe downsize to cheaper property.
    Also if you ever need access to a lot of cash quickly (illness/children) it aint no good if its tied up in a pension.

    Just another take on it!


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    #11
    man_no_plan
    Registered Users Posts: 1,018 ✭✭✭man_no_plan


    Armelodie wrote: »
    Consider the option of keeping the ball of money yourself!
    Yer pension might be pittance but possibly balance that with having a mortgage paid off earlier and possible second property paying for itself , plus maybe downsize to cheaper property.
    Also if you ever need access to a lot of cash quickly (illness/children) it aint no good if its tied up in a pension.

    Just another take on it!

    That's a great idea armelodie, no opt out on public service pensions though!


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    #12
    evolving_doors
    Closed Accounts Posts: 11,812 ✭✭✭✭evolving_doors


    man_no_plan wrote: »
    That's a great idea armelodie, no opt out on public service pensions though!

    Ah ya but just in terms of spending extra cash on AVC's every month...


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