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Can a civil servant open a PRSA

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  • 24-05-2010 7:13pm
    #1
    MrMatisse
    Closed Accounts Posts: 1,743 ✭✭✭


    Can a civil servant who will get a government pension open a PRSA make AVC's and claim tax relief?


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    #2
    GerardKeating
    Registered Users Posts: 7,651 ✭✭✭GerardKeating


    Really-Stressed wrote: »
    Can a civil servant who will get a government pension open a PRSA make AVC's and claim tax relief?

    no,


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    #3
    MrMatisse
    Closed Accounts Posts: 1,743 ✭✭✭MrMatisse


    This is on a government website:

    The present situation for Public Servants (teachers, nurses, etc.) and Civil Servants is that they have two options as to where they can make AVCs to supplement their superannuation scheme benefits. The first is through their approved AVC scheme provider, an arrangement often negotiated by their Trade Union. The second is to establish a PRSA AVC with a provider of their own choice. However, the latter method contains the disadvantage that contributions cannot be deducted from salary and so the employee must manually claim their own tax and PRSI relief. In addition, the former method obliges the employee to accept whatever charges the incumbent AVC provider may impose. In practice, we have seen that these charges are not always competitive when compared with other offerings available in the wider market.

    Anyone explain?:confused:


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    #4
    sofireland
    Registered Users Posts: 1,245 ✭✭✭sofireland


    My understanding is that yes you can if the scheme you are in allows you to do so. Also they will have to do a check to ensure that you are not over funding your pension as per the rules of your scheme.

    I know Nurses/Teachers etc who have set them up with no problems


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    #5
    [Deleted User]
    Posts: 281 ✭✭ [Deleted User]


    Really-Stressed,

    The teacher,nurse etc. can set up their AVC by salary deduction but they are at the mercy of the AVC provider (normally only one) regarding what the charges are likely to be. If it's an AVC PRSA the nurse,teacher etc. can get hit with an Advisor Fee, 5% of each contribution that they make and an Annual Management Charge of 1%pa on funds invested.

    If the nurse, teacher etc. goes 'outside' the scheme and buys the PRSA AVC on an 'execution only' basis from a discount broker, the only charge that will apply will be the 1% AMC (No fee + No slice taken off each and every contribution). The only difference is that, because this cannot be done by salary deduction, the teacher,nurse has to claim the Tax/PRSI relief on the contributions manually. See here how it's done. It's not a that difficult to do and it's worth the effort.


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