Purchasing Additional Years v's Purchasing AVC's

22 February 2008.

Features/Benefits of Purchasing Years Service and funding AVC (Additional Voluntary contributions).

Purchasing Years/buying back years through your Employer

Funding an AVC

(Additional Voluntary Contributions

Attracts tax relief through net pay/salary

Attracts tax relief through net pay/salary

It is guaranteed to secure you the extra year(s) or portion of year Service - no investment risk associated with this

AVC investment returns are not guaranteed and could secure you a higher or lower benefit/fund than planned for.

This secures all benefits associated with service, i.e. extra pension, extra tax free lump sum, extra spouse’s pension etc.

Upon death post retirement, up to 50% of the extra benefits secured dies with you. Your Spouse will obtain 50% of the benefits that you had obtained.

AVC builds up a fund, of which you can select what benefit you desire, i.e. tax free lump sum, higher annual pension, Approved Retirement Fund, taxable lump sum.

Upon death post retirement, the full value of your AVC (ARF) passes to your Spouse, children or estate. Tax efficient means of Estate Planning.

This improves your pension benefit through your Employer for shortfall in years’ service only. Max years’ service is 40 years. Shortfall can arise from the following reasons:

-started employment later in life(e.g. at age30)

-Job sharing or part-time at any stage

-Parental leave, or maternity leave

AVC can be used for all of the following:

- Fund for shortfall in pension service( ie Max 40 years’ service)

-Fund for State Offset, if you joined Employer Pension Post April 1995.( Old age contributory pension is offset against Employer Pension,)

- Fund for Spouses Pension. Available for all employees. Employer provides for 50% Spouses Pension. Revenue permits Employees to fund for the further 50% through AVC means. If you satisfy the €12,700 per annum guaranteed pension income (employer pension, state old age pension etc.)then you are not obliged to purchase the Spouses pension, but you can obtain full access to your AVC fund post retirement( subject to Revenue guidelines) instead.