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AVC/Purchase of notional service.

  • 28-03-2017 12:27am
    #1
    endacl
    Registered Users, Registered Users 2 Posts: 22,412 ✭✭✭✭


    Quick question for the people-who-are-good-with-numbers people...

    Well, two connected questions, really.

    I have an AVC in place to make up a shortfall in a public service pension.

    1. Can my AVC (once a sufficient fund has accumulated) be used to buy national year's of service?

    2. If I buy back years of service, is there any point in keeping up the AVC payments, as essentially tax-free additional contributions? I can afford to. Just wondering if there's any point.

    Oh. Third question that just occurred to me. What are the pros and cons of AVC v notional service? I've read the literature. Really, none the wiser. I really need the 'big cardboard pages with pictures in primary colours' version. My degree is in music...

    :confused:


Comments

  • #2
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,858 Mod ✭✭✭✭Henry Ford III


    endacl wrote: »
    Quick question for the people-who-are-good-with-numbers people...

    Well, two connected questions, really.

    I have an AVC in place to make up a shortfall in a public service pension.

    1. Can my AVC (once a sufficient fund has accumulated) be used to buy national year's of service?

    2. If I buy back years of service, is there any point in keeping up the AVC payments, as essentially tax-free additional contributions? I can afford to. Just wondering if there's any point.

    Oh. Third question that just occurred to me. What are the pros and cons of AVC v notional service? I've read the literature. Really, none the wiser. I really need the 'big cardboard pages with pictures in primary colours' version. My degree is in music...

    :confused:

    1/. Yes. Your employers scheme may allow this or you can purchase an annuity privately (horribly expensive though).

    2/. If your pension is fully funded there's little point, but you can aim to increase your scheme benefits. Ultimately all schemes are subject to revenue rules so it's difficult to overfund them.

    AVC's are investment products so there are plenty of retirement planning opportunities. Added years are a promise of future benefits. Chalk and cheese really.


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