Published on February 29th, 2016 | by BoyleToday.com
The Financial Column
Important reminder: Deadline approaching, 27th March 2016.
NB: 27th March 2016 is the Closing Date for once-off Pre-Retirement access to AVCs (Additional Voluntary Contributions).
For a period of three years from 27th March 2013 until 27th March 2016, members of occupational pension schemes (i.e. employees in a company pension scheme) who have been making Additional Voluntary Contributions (AVCs), are permitted to access up to 30% of the value of their AVCs on a once-off basis. Withdrawals made are subject to income tax at the individual’s marginal tax rate.
The important point to note is this is a once-off measure which was introduced in 2013. Once the 27th March 2016 deadline has passed, AVCs cannot be accessed until the person’s normal retirement date.
Additional Voluntary Contributions (AVCs) – Some general information.
Employees and directors who are members of a company (occupational) pension scheme may enhance the retirement benefits (i.e. increase their tax free lump sum and/or their pension) provided by their pension scheme by making AVCs. This may be through making AVCs to the scheme itself, or by making AVCs to a separate arrangement, or by making AVCs through a Personal Retirement Savings Account (PRSA) AVC.
Back-dating of tax relief on lump sum contributions is allowed for the previous tax year. For example if you are a PAYE employee, subject to 40% income tax, and you make a €5,000 lump sum contribution to an AVC and hadn’t done so in 2015, then you would receive tax relief/rebate of €2,000.
A person making AVCs to enhance their benefits can do so provided they don’t exceed the maximum benefits allowed by the Revenue.
For advice on AVCs and all other aspects of retirement planning you should consult a local independent financial broker or adviser such as Money Plus. In this regard Belinda McCauley and her colleagues at Money Plus, Bridge St, Boyle would be delighted to assist you. Belinda can be contacted at 071-9194000/ 086-7847827 or by email: email@example.com.