AVC's for teachers.

acequion

Exactly two years ago I was posting questions about AVCs here, and procrastination must be my middle name,or maybe it's my dislike of figures and accounts, because I've done nothing about it since and here I'm back asking questions. So apologies in advance.

I have decided to go for an execution only AVC and will probably go with Cornmarket as they now offer such an option and seem the most straight forward. I won't be investing much as I'm already paying into notional service and I'll be retiring in about 6-7 years. So I have two questions and would hugely appreciate any input.

1. "Cornmarket Individual Investment Service" Does anybody know what this is? On their form you can choose either this option or else a range of Irish life funds to invest in. As I know sweet f.a. about where or what to invest in I would imagine that would be my logical choice but I'm open to contradiction.

2. Getting the tax back.Some people say this is hard,others say it's no problem,so what do people here think? Does it take weeks to sort out the tax credits? And more importantly, would I have to go through this rigmarole each year? Would I have to file a tax return each year? I notice Cornmarket ask for a percentage of salary rather than a set sum, however salary doesn't really change from year to year[when no increment is due] or does it?

Basically I just want to get this thing up and running with a minimum of effort and fuss, otherwise I'll never do it. So thanks so much for replies.

gaiscioch

acequion wrote: »

Exactly two years ago I was posting questions about AVCs here, and procrastination must be my middle name,or maybe it's my dislike of figures and accounts, because I've done nothing about it since and here I'm back asking questions. So apologies in advance.

I have decided to go for an execution only AVC and will probably go with Cornmarket as they now offer such an option and seem the most straight forward. I won't be investing much as I'm already paying into notional service and I'll be retiring in about 6-7 years. So I have two questions and would hugely appreciate any input.

1. "Cornmarket Individual Investment Service" Does anybody know what this is? On their form you can choose either this option or else a range of Irish life funds to invest in. As I know sweet f.a. about where or what to invest in I would imagine that would be my logical choice but I'm open to contradiction.

2. Getting the tax back.Some people say this is hard,others say it's no problem,so what do people here think? Does it take weeks to sort out the tax credits? And more importantly, would I have to go through this rigmarole each year? Would I have to file a tax return each year? I notice Cornmarket ask for a percentage of salary rather than a set sum, however salary doesn't really change from year to year[when no increment is due] or does it?

Basically I just want to get this thing up and running with a minimum of effort and fuss, otherwise I'll never do it. So thanks so much for replies.

Hi acequion. I hope the summer is going well. I think this could be one of the threads. As I think I mentioned in it, I met a guy in a firm that specialises in pensions/AVC etc for public sector workers. I paid him €150 for independent financial advice. The summary: my Cornmarket AVC was bad value - it was an Irish Life AVC and, as he put it, Irish Life are 'C students', and he recommended that I move to Zurich where the returns are higher. He also advised that at this stage - 25 years off retirement (I won't last that long!) I should choose an AVC fund which was riskier in order to enhance my returns and then before I go to draw it down, move to a more conservative AVC fund (if fund is the right word).

Anyway, the downside of moving from Cornmarket/Irish Life AVC is that the Department does not facilitate direct deduction from your salary for any AVC which is not Cornmarket/Irish Life. That minor point aside, you can simply set up a direct debit for the money to be paid to Zurich each pay cheque. Not being a big fan of dd, I opted to pay the annual AVC in one go. Zurich then gave me a certificate to give to Revenue. I uploaded that to the Revenue Commissioners MyAccount service within 10 minutes of receiving it in the post, and from thereon my net pay increased a certain amount every fortnight to reflect the AVC tax refund (which was spread over the 12 months, and constituted about 40% of the total amount I put into it). As I made the AVC inflation linked, I have to send the RC that cert each year to confirm the new, higher amount paid. All-in-all it was little trouble to leave Cornmarket/Irish Life.

On a related issue, when I got the Cornmarket/Irish Life AVC, I also got a Life Insurance policy from them. However, for the premium I was paying it was bad value as it only covered me until I was 60 years old. I shopped around recently and came across an insurance broker in Wicklow, who is widely mentioned on Boards, and got a policy (with Aviva) €30 more expensive per year that covered me until I was 70. They do not give financial advice, however, and seem to be a sort of Ryanair of insurance brokers. If you've done your research, it could save you a lot of money to price it with them. See how their AVC price compares with all the Bonkers.ie (great website, by the way) results.


Lastly, the independent guy that gave me advice said that the salary protection from Cornmarket, while expensive, was worth keeping.

feedthegoat

Very interesting and informative post.

I suppose it depends on how long you have left in the job and how risk averse you are.

Good to know that the salary protection is recommended, know of 2 colleagues who have had to use it due to health issues.

acequion

Thanks so much gaiscioch for all that. Your earlier thread is brilliant and I was thinking WTF how did I miss that?? But then I saw it was June last year and for me June is the big switch off time from everything job related.:D

But there's great information there. I've been talking to Cornmarket but finding them extremely frustrating. They are military about the "No Advice" part of the Execution only, no advice AVC. They won't even answer simple questions. They just want the big sit down and rummage through your finances while pocketing their 450k for the compliment. Probably confuse the heck out of me while they're at it!

I might need their advice if I was starting out,but I'm already invested in the notional service scheme which I find good. I'm buying back 10 years as I was many years abroad and started late, but even with that I'll still have a shortfall,so I want to invest about 300 a month for the next 7 years or so. I'd invest a bit of a lump sum as well, but they won't even tell me if I can do both.

So I will go the "execution only" route but with who,I don't know yet. Is that risky do you think, when I know nothing about what fund etc I'm putting my money into? Will I need some independent financial advice? These AVCs or PRSAs, I think they call them, are becoming increasingly popular with loads of brokers so there most be some relatively standard fund for the ordinary Joes investing blindly.

The "execution only" form is quite tricky, requiring details like percentages of salary now and at retirement and mathematical stuff like that. Will the employer give me that information?

You're right that arranging to get the tax back is quite easy and in no way a deterrent to the execution only scheme.

Anyway, I hugely appreciate all the help I can get so thanks again.

acequion

feedthegoat wrote: »

Very interesting and informative post.

I suppose it depends on how long you have left in the job and how risk averse you are.

Good to know that the salary protection is recommended, know of 2 colleagues who have had to use it due to health issues.

I also have the salary protection. It only runs up to age 60 though.

evolving_doors

Dont forget to claim relief on the salary protection.

acequion

Gebgbegb wrote: »

Dont forget to claim relief on the salary protection.

Doesn't that come out at source?

evolving_doors

acequion wrote: »

Doesn't that come out at source?

Oh yeah sorry, I pay it myself and claim it back. I Don't go through payroll.

man_no_plan

Best advice I ever got is that if you're not paying directly for financial you'll pay indirectly.

acequion

man_no_plan wrote: »

Best advice I ever got is that if you're not paying directly for financial you'll pay indirectly.

Thanks man_no_plan but Cornmarket's fees are exorbitant. €450 for the initial meeting,granted you get the tax back on it but you still pay about €280 ish. Then 5 % of every single contribution. That's in addition to the other standard charges and 1% for putting it through payroll for you.

But you're right. It's like doing something on the cheap and you pay in the long run. But where to find a good financial advisor?

man_no_plan

acequion wrote: »

Thanks man_no_plan but Cornmarket's fees are exorbitant. €450 for the initial meeting,granted you get the tax back on it but you still pay about €280 ish. Then 5 % of every single contribution. That's in addition to the other standard charges and 1% for putting it through payroll for you.

But you're right. It's like doing something on the cheap and you pay in the long run. But where to find a good financial advisor?

Cornmarket have are tied agents I think, for Irish Life. There's a crowd in Maynooth, PSRA, found them good.

Cornmarket guys are always trying to sell in my experience.

I cant retire until I'm 102 I think qt this stage so no need for an AVC here

gaiscioch

PSRA was where I went also. They held meetings for older teachers from my school and one of them gave me their name. It cost me €150 for a 1.5-2hour meeting out in Maynooth (they charge a bit extra to visit you). It was worth it just for the change your AVC from Irish Life/Cornmarket advice.

However, in hindsight I should also have changed my then existing Irish Life life insurance policy so that it ends at 70 rather than 60; as I mentioned above, by using the execution-only LA Brokers website it was only marginally dearer to extend that by a full ten years with a company other than Irish Life (Aviva, in this case). To extend it by 10 years with Irish Life was far more expensive. Then again, had I extended it through a proper broker/broker that gives advice like PSRA they would have charged a commission on top of my annual charge. Furthermore, with that Irish Life insurance until the age of 60 I was paying for a "Conversion Option" but this, I later realised, was a waste of money (it gives you the right to continue your life insurance after the age of 60, in the case of that policy, without having to undergo health checks etc - however, because you are over 60 they are going to screw you with the premium anyway, using your age rather than health as grounds).

If you are going to meet any independent financial advisor, my sole advice would be to have plenty of questions ready and do loads of online research on Boards, Askaboutmoney etc before meeting them. You'll really benefit a lot if you are much more informed beforehand. I found they weren't pushing business - in fact, he said not to bother with the AVC at that time because of other financial priorities that I had.

gaiscioch

Gebgbegb wrote: »

Oh yeah sorry, I pay it myself and claim it back. I Don't go through payroll.

Curious about this, Gebgbegb. If it's not taken out of your salary, are you getting salary protection from a firm other than Cornmarket/Irish Life? If so, what prompted you to change it and how did you choose what firm to buy it off?

evolving_doors

gaiscioch wrote: »

Curious about this, Gebgbegb. If it's not taken out of your salary, are you getting salary protection from a firm other than Cornmarket/Irish Life? If so, what prompted you to change it and how did you choose what firm to buy it off?

I pay it myself through direct debit (through cornmarket). Then claim back the relief the following year.
I've forgotten what insurance company it's with... I went into it because Cm had a special offer if you were under a certain age (which they shut off soon after the sick leave arrangements changed)..

gaiscioch

Gebgbegb wrote: »

I pay it myself through direct debit (through cornmarket). Then claim back the relief the following year.
I've forgotten what insurance company it's with... I went into it because Cm had a special offer if you were under a certain age (which they shut off soon after the sick leave arrangements changed)..

Ah. That sounds like the same one I still have with Cornmarket/Irish Life, except the cost is deducted from salary every fortnight. The Department only seem to deduct from salary on behalf of Cornmarket because when I changed my AVC to Zurich they said they couldn't continue deducting the AVC cost from salary every two weeks.

mirrorwall14

Can anyone tell me how I figure out how many years of service I will have at 65? I'm a post 2004 teacher

rainbowtrout

mirrorwall14 wrote: »

Can anyone tell me how I figure out how many years of service I will have at 65? I'm a post 2004 teacher

That depends on what year you started in.

Year you turn 65 - year you started.

Or 65 - age you started teaching.

mirrorwall14

rainbowtrout wrote: »

That depends on what year you started in.

Year you turn 65 - year you started.

Or 65 - age you started teaching.

My first year was private. My second had just a small amount of dept paid hours, rest school paid. Then a year with less than full hours. That's why I'm unsure

rainbowtrout

You could probably ring the department and ask for a statement of service

frebel

acequion wrote: »

Exactly two years ago I was posting questions about AVCs here, and procrastination must be my middle name,or maybe it's my dislike of figures and accounts, because I've done nothing about it since and here I'm back asking questions. So apologies in advance.

I have decided to go for an execution only AVC and will probably go with Cornmarket as they now offer such an option and seem the most straight forward. I won't be investing much as I'm already paying into notional service and I'll be retiring in about 6-7 years. So I have two questions and would hugely appreciate any input.

1. "Cornmarket Individual Investment Service" Does anybody know what this is? On their form you can choose either this option or else a range of Irish life funds to invest in. As I know sweet f.a. about where or what to invest in I would imagine that would be my logical choice but I'm open to contradiction.

2. Getting the tax back.Some people say this is hard,others say it's no problem,so what do people here think? Does it take weeks to sort out the tax credits? And more importantly, would I have to go through this rigmarole each year? Would I have to file a tax return each year? I notice Cornmarket ask for a percentage of salary rather than a set sum, however salary doesn't really change from year to year[when no increment is due] or does it?

Basically I just want to get this thing up and running with a minimum of effort and fuss, otherwise I'll never do it. So thanks so much for replies.

I know it's been quite a while since this post but in a similar situation to you now so would be great to know how you got on?

pandoraj09

I went to one of the PRSA talks in my local education centre. The talk was excellent and you get an email with all this slides. I took lots of notes during the 2 hours and then contacted Eavan Hughes ( am I allowed to name him???) who gave the talk for a one to one advice session in Maynooth. It cost me 100 euro as I'd been at his talk and he went through everything with me. I brought my AVC stuff as well as payslips. I've 9 years to buy back when I started in my present school but wasn't in the Pension Scheme. He told me my AVC will give me more or less the amount I need to buy back those years. He also talked about a last minute AVC you can do teh Summer you retire that gives you a few grand back, if all your tax affairs are in order. My biggest issue was trying to get credit for a year and a half of subbing I did as an NQT in the late 80s. I found Eavan fantastic and went away with a clear head about retiring.