Wednesday, November 30, 2016

PRSA AVCs for Public Service Employees

PRSA AVCs are Additional Voluntary Contributions made through a Personal Retirement Savings Account.

PRSA AVCs are a convenient method of funding for additional retirement benefits for the following reasons.

  • Give you control over your choice of funds and provider
  • Valuable tax relief is available
  • Potential for a larger tax-free lump sum at retirement
  • Access to an ARF/AMRF at retirement
  • PRSA AVCs are easy to understand and easy to set up
  • PRSA AVCs could help you retire early
Scope to make PRSA AVCs and maximise your retirement benefits.

You can make PRSA AVCs if the benefits that you will receive at retirement from your superannuation scheme and any benefits retained from previous employments, are projected to be lower than the maximum allowed by Revenue.

The following are examples of where there will be scope for providing additional benefits:

  • Missing Years

If you do not expect to have full service, you could use PRSA AVCs to make up part or all of the difference between the maximum allowable tax-free lump sum and the tax-free lump sum based on shorter service.

Likewise, you could use PRSA AVCs to bring your pension up to the maximum allowed by Revenue.

  • Non-pensionable Earnings

If you have non-pensionable earnings (e.g. overtime) you could use PRSA AVCs to fund for a pension based on your total earnings.

  • Social Welfare Integration

Class A PRSI contributors have their pension benefit reduced to take account of their eligibility to receive the contributory retirement pension (single rate). The shortfall between the resultant pension and the maximum allowable pension under Revenue rules can be made up by PRSA AVCs.

  • Spouse’s Pension (Death in Retirement)

The amount of spouse’s pension that can be provided is 100% of the maximum member’s pension. Your superannuation scheme provides a spouse’s pension of 50% of your pension.

  • Additional Member’s Pension

The Revenue maximum pension is 2/3rds of remuneration reduced by the pension equivalent of the lump sum. This maximum pension after lump sum could be as high as 60% of remuneration which leaves significant scope for PRSA AVCs in the public service, where the maximum pension is 50% of pensionable pay.

PRSA AVCs, taken out for any of the reasons highlighted above, can be used to offset the effect of these reductions.

PRSA AVC's are a tax efficient means of saving money.

You can purchase a PRSA AVC with Zurich Life with no contribution charge (100% of your money is invested) and a 1% annual management charge through  

This service is on an ‘execution only’ basis.

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