Single Public Service Pension Scheme - AVC

jopper

For those of us unfortunate (pension wise) to start in the public sector post 2013, what AVC’s are you using?

Our union heavily promotes Cornmarket to use as the sold AVCs provider but many people are giving out about this company, although the benefit they can take it directly out of your payslip.

As I won’t be able to live off the Single Public Service Pension Scheme can people recommend their AVC choice please. Thanks

masterboy123

Interesting post.

I am also aware of only the corn market.

How do you calculate the projected future pension?

Jim2007

https://www.boards.ie/discussion/2058416510/single-public-service-pension-scheme-avc

This would just be a case of the blind leading the blind…. While comments on what approaches people are taking is given with the best intentions, you have know way of known the quality of that advice and furthermore the people giving it don't know either (and that goes for the comments you have already heard as well). And that is because they don't have the knowledge, tools or data necessary to accurately evaluate performance (mind you some of the advisors don't seem to have either when put under pressure).

If you already feel you are endanger of being unable to finance your retirement, then you need to sit down with a financial planner and come up with a realist plan that you need to execute. AVC may or may not be part of the plan, but I would assume there will be some more bitter pills that will need to be swallowed. Errors in pension funding are very difficult to correct, but the sooner you start the better the chance you have.

jopper

https://www.boards.ie/discussion/comment/123545940#Comment_123545940

Lots of great points there. But still, it is interesting to hear what other people are doing and if Cornmarket are a good as they market themselves to be

Jim2007

https://www.boards.ie/discussion/comment/123546208#Comment_123546208

There is NO data to tell you if Cornmarket are good or not. The market data is not there, you don't have the skills to construct the benchmarks and even if you did, you don't have the data and above all you don't have the timing events. So asking random individuals on the internet for an opinion on something they can't possibly have an informed opinion on, is not the way to go….

But 40 years in this industry has thought me one thing - you can't protect people from themselves.

I'll leave the thread open, but once it starts to venture off I will close it down.

Geuze

https://www.boards.ie/discussion/2058416510/single-public-service-pension-scheme-avc

Have you estimated what your pension income in retirement will be?

Geuze

https://www.boards.ie/discussion/comment/123545707#Comment_123545707

Cornmarket is one brokerage.

There are other insurance/pension brokers.

Jim2007

https://www.boards.ie/discussion/comment/123545707#Comment_123545707

You can't really, with any accuracy unless you are in your final working years as there are too many moving parts… What you should do every few years is a couple of "back of a cigarette packet" calculations to get a feel for how you are getting on.

• How much would you need to retire now based on current out goings? Here people tend to under estimate the figure as they assume they will do very little in retirement, when in fact they will still be healthy and want to do a lot or are sick and want to have extra comforts not covered or limited by healthcare. I would not accept a figure below say 70% of your current salary less the current state pension.
• What capital value is needed to generate your required income and is the projected capital value of your pension fund in line with that value. The consensus return for a professional manager on a well balanced portfolio is about 8%, with the real return being about 3% over a 40 year period. People will argue they can do better, but it is almost always a flawed calculation.
• Is the reported return on the fund (not your actual return) in line with the benchmark. This should actually be easy, but EU law does not require it and asset managers in the British Isles are notoriously shy about displaying it. However a compentent financial advisor should be able to give you an approximation or better, be able to identify the underlying "white listed" fund and use that.

All of this is very subjective, but given the objective of ensuring you will have enough at retirement, it is very advisable to be conservative in your estimates.

masterboy123

https://www.boards.ie/discussion/comment/123548897#Comment_123548897

Thank you for this.

I have about €30,000 highlighted on my SPSPS annual statement, that's with 12 years of work. I have another 30 years left until I retire.

Any idea if I could calculate my pension based on this information? If the pay remains the same.

Tipp1991

https://www.boards.ie/discussion/comment/123549836#Comment_123549836

There's an estimator tool for the Single Pension Scheme: https://singlepensionscheme.gov.ie/for-members/scheme-information/single-scheme-estimator-tool/

masterboy123

https://www.boards.ie/discussion/comment/123549866#Comment_123549866

The link for the calculator is not working. Is it working at your end?

Geuze

https://www.boards.ie/discussion/comment/123548897#Comment_123548897

This thread is about PS pensions in Ireland, which are unfunded.

They are DB pensions.

It is possible to estimate future benefits, albeit more difficult with the SPSPS.

In the pre-95 PS pensions in Ireland, it was simple to calculate benefits:

Lump-sum = 1.5x final salary

Pension = 0.5x final salary

The SPSPS estimator tool isn't working for me:

https://singlepensionscheme.gov.ie/for-members/scheme-information/single-scheme-estimator-tool/

Tipp1991

https://www.boards.ie/discussion/comment/123550178#Comment_123550178

Ya, it downloads it as an excel file.

Jim2007

https://www.boards.ie/discussion/comment/123550432#Comment_123550432

For DB type pensions you can use the buy in value as an alternative. And if you have say 30 years to go you probably should because there is always the possibility you want to leave or the structure of your fund may change. And given the fact that governments continue to kick the pension funding issues down the road it is very possible that there will be some serious restructuring to come.

masterboy123

https://www.boards.ie/discussion/comment/123550509#Comment_123550509

Not downloadable.

Geuze

http://singlepensionscheme.gov.ie/wp-content/uploads/2022/11/Updated-Member-Booklet_ENG-NOV-2022.pdf

See calculations in screenshot below:

Lump-sum = 3.75% * gross pensionable wages * work pattern

Cairnq1

You can choose any broker to set up a PRSA AVC or set it up yourself directly with a Life Co. The AVC can be done with any of the Life Companies. The brokers job is to compare and contrast the fund platform of each Life Co. and make a recommendation. If you don't have a broker call a couple in your area and sound them out. If in a couple of years your not satisfied with one broker you can change brokers at no cost to you. If you join the Cornmarket 'group AVC scheme' it is more difficult/costly to transfer your AVC to another provider. Different rules apply to group AVC's versus individual PRSA AVC's. Cornmarket have some advantages such as salary deduction (tax releif at source). They are a large organisation with 40+ years experience with public sector. But their AVC schemes are with Irish Life and you may prefer another Life Co. Also some people prefer a one to one client broker relationship.

masterboy123

https://www.boards.ie/discussion/comment/123740077#Comment_123740077

Can you please share the website to set up AVCs online?

Geuze

There is no "one" website to set up AVCs.

That is like saying there is "one" website to buy a new car.

There are multiple sellers of new cars, just like there are multiple sellers of pensions.

Pensions are typically sold through brokers.

There are hundreds of brokers selling pensions.

Walk through any town in Ireland, and you will pass brokers selling pensions.`

If a public servant wishs to start an AVC, then have a few options:

(a) in many PS organisations, there is one broker (usually Cornmarket) that has an exclusive right to operate salary deduction for AVCs

(2) employees are free to go elsewhere, and start their own AVC, which will be a PRSA-AVC, with any other broker / lifeco

(3) I believe that some lifecos will deal directly with workers, avoiding the use of brokers, but I don't know much about this