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AVC PRSA for a public sector worker vs tax-free lump sum

  • 13-10-2024 3:27pm
    #1
    sector_000
    Registered Users, Registered Users 2 Posts: 461 ✭✭


    My wife intends to retire early, sometime next year. At that point, she'll have spent only 22 years in the Public Sector.

    She will defer taking her pension for several years until she hits 65.

    I assume she'll only be entitled to (22/40) x 1.5 x Final Salary as her tax-free lump sum gratuity. Makes sense?

    If she were to open an AVC PRSA now, and fund that with the equivalent of (18/40) x 1.5 x Final Salary, would she then be allowed to withdraw all that tax-free? Would that withdrawal have to wait until age 65? Or is it independent of when she draws down her PS pension?
    Some of that AVC funding will be associated with 2023 tax filing, some with 2024 taxes.

    Also, I saw on some pension adviser website a statement about public sector AVCs:
    "AVC must be attached to an occupational/company pension scheme. They cannot be set up without the main pension scheme e.g. Public Sector Pension Schemes (HSE, Dept of Education)."

    What does that "attached" mean? Can she open up her own AVC PRSA with any provider?

    Thanks in advance



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