AVC allowing early retirement/withdrawal, separate to main employer scheme

AndrewJRenko

Hi folks

I'm looking for an AVC scheme that will allow early retirement and withdrawal of funds, not synch'ed to my main employer pension retirement timing. This flexibility would be helpful in case of health issue or other unforeseen emergency.

I had some AVCs in an Equitable Life fund many, many moons ago that allowed this early retirement, at any age over 50. Is there anything similar on the market today?

Low charges, payment by salary deduction for civil servants and automatic tax relief at source would be nice too, if that's not too demanding.

Henry Ford III

I don't think this is possible. Revenue rules etc.

ANXIOUS

AndrewJRenko wrote: »

Hi folks

I'm looking for an AVC scheme that will allow early retirement and withdrawal of funds, not synch'ed to my main employer pension retirement timing. This flexibility would be helpful in case of health issue or other unforeseen emergency.

I had some AVCs in an Equitable Life fund many, many moons ago that allowed this early retirement, at any age over 50. Is there anything similar on the market today?

Low charges, payment by salary deduction for civil servants and automatic tax relief at source would be nice too, if that's not too demanding.

All benefits relating to the same employment have to be taken at the same time.

coylemj

AndrewJRenko wrote: »

I'm looking for an AVC scheme that will allow early retirement and withdrawal of funds, not synch'ed to my main employer pension retirement timing. This flexibility would be helpful in case of health issue or other unforeseen emergency.

AVC schemes are typically synced with your occupational scheme, they have to be in order to get revenue approval.

That means that in your case, your options are limited to what your employer has organised so it's not a case of casting a net and seeing what you catch.

AndrewJRenko wrote: »

I had some AVCs in an Equitable Life fund many, many moons ago that allowed this early retirement, at any age over 50. Is there anything similar on the market today?

Equitable Life promised a lot that they were not capable of delivering. I recall that they attracted a lot of business with the promise of guaranteed annuity rates, a financial time bomb that eventually went off. I wouldn't set any store by what they told you.

Liam D Ferguson

AndrewJRenko wrote: »

I had some AVCs in an Equitable Life fund many, many moons ago that allowed this early retirement, at any age over 50.

If it was an AVC it could only have allowed you early retirement if you were also retiring from the main pension scheme at the same time.

AndrewJRenko

Liam D Ferguson wrote: »

If it was an AVC it could only have allowed you early retirement if you were also retiring from the main pension scheme at the same time.

ANXIOUS wrote: »

All benefits relating to the same employment have to be taken at the same time.

coylemj wrote: »

AVC schemes are typically synced with your occupational scheme, they have to be in order to get revenue approval.

Thanks for these clarifications. In the scenario I mentioned, there was no benefit from the main occupational scheme from that employment, as I was too young to qualify at the time. So the question of syncing with the main scheme was moot - I wasn't a member of the scheme in question.

I guess that's why the question of syncing never came up.

So I guess the question for me now, knowing that I won't be able to get back the AVC funds before retirement, is can I afford to lock this money away to get the benefit of the tax relief. Are there any exceptional conditions, such as medical emergency within the family that would allow me to drawdown on the AVC before I give up working?

coylemj wrote: »

That means that in your case, your options are limited to what your employer has organised so it's not a case of casting a net and seeing what you catch.

I'm reasonably sure this is not correct. For payment by salary deduction, you are limited to what your employer has organised. But any employee can fund any AVC, subject to usual Revenue limits, if they make the payments and claim the tax relief themselves, unless I'm missing something badly?

coylemj wrote: »

Equitable Life promised a lot that they were not capable of delivering. I recall that they attracted a lot of business with the promise of guaranteed annuity rates, a financial time bomb that eventually went off. I wouldn't set any store by what they told you.

They delivered me fairly decent returns on a unit-linked fund over 15 or 20 years with low fees. The with-profits side certainly went off the rails, but the unit-linked business was solid.

The J Stands for Jay

AndrewJRenko wrote: »

Thanks for these clarifications. In the scenario I mentioned, there was no benefit from the main occupational scheme from that employment, as I was too young to qualify at the time. So the question of syncing with the main scheme was moot - I wasn't a member of the scheme in question.

I guess that's why the question of syncing never came up.


I'm reasonably sure this is not correct. For payment by salary deduction, you are limited to what your employer has organised. But any employee can fund any AVC, subject to usual Revenue limits, if they make the payments and claim the tax relief themselves, unless I'm missing something badly?


They delivered me fairly decent returns on a unit-linked fund over 15 or 20 years with low fees. The with-profits side certainly went off the rails, but the unit-linked business was solid.

I wonder are you getting confused by PRSA AVCs?

If you have a regular PRSA, you don't need an employer scheme and you can take benefits from age 50. It's just not called an AVC.

Liam D Ferguson

AndrewJRenko wrote: »

I'm reasonably sure this is not correct. For payment by salary deduction, you are limited to what your employer has organised. But any employee can fund any AVC, subject to usual Revenue limits, if they make the payments and claim the tax relief themselves, unless I'm missing something badly?

That's bang on. If you want to make an AVC by salary deduction, you go with the arrangement your employer has set up. If you're willing to pay by Direct Debit or cheque and claim your tax relief yourself, you can choose a PRSA AVC from any PRSA provider you like.

AndrewJRenko

McGaggs wrote: »

I wonder are you getting confused by PRSA AVCs?

If you have a regular AVC, you don't need an employer scheme and you can take benefits from age 50. It's just not called an AVC.

I could well be getting confused between the two.

In my current employment, I'm a member of a public sector DB scheme, but I would have some room to top up. I'm advised that the current rates for buying additional years service are not great value, so I understood that an AVC was my only option.

My employer/trade union has some AVC options available, but the charges are fairly steep and there was no option for early retirement.

So is there an option open to me that I can take benefits before actual retirement?

The J Stands for Jay

AndrewJRenko wrote: »

I could well be getting confused between the two.

In my current employment, I'm a member of a public sector DB scheme, but I would have some room to top up. I'm advised that the current rates for buying additional years service are not great value, so I understood that an AVC was my only option.

My employer/trade union has some AVC options available, but the charges are fairly steep and there was no option for early retirement.

So is there an option open to me that I can take benefits before actual retirement?

No

AndrewJRenko

McGaggs wrote: »

No

Thanks - so who/when/where does this scenario apply?

McGaggs wrote: »

If you have a regular AVC, you don't need an employer scheme and you can take benefits from age 50. It's just not called an AVC.

ANXIOUS

Are the avcs related to your current emploment?

AndrewJRenko

ANXIOUS wrote: »

Are the avcs related to your current emploment?

Broadly yes, but is there some particular definition of 'related to' that applies here?

Liam D Ferguson

If you have only one source of income - your public service job - and it's pensionable - you're in the public service superannuation / pension scheme, then any AVCs, regardless of whether they're your employer / union's AVC scheme or your own PRSA AVC, must be withdrawn at the same time as you retire from the main scheme.

The J Stands for Jay

AndrewJRenko wrote: »

Thanks - so who/when/where does this scenario apply?

Sorry, there was a typo there. I've fixed it now.

Hani Kosti

AVCs have to be retired at the same time as the main scheme. That applies to AVC scheme or AVC PRSA. No wiggle room here.
The only way to retire (other than early retirement) is an ill health retirement ( strict rules apply here).
So I'm afraid short answer to your question is no, there isn't an option accessing AVC without retiring from the main scheme AFAIK.
There used to be an option withdraw 30% of the AVC fund (subject to tax) but that's gone now

AndrewJRenko

Thanks for the clarifications folks. I guess I was a bit misled by my history, where I had AVCs but no employer benefit from a past employment.

I do have one further pension pot from a past private employment, mix of employee contributions, matching employer contributions and AVCs. I know that fund allows for early retirement, subject to conditions, so I might hold that as my emergency fund and go ahead with further AVCs now.

Thanks again for the feedback.

Henry Ford III

AndrewJRenko wrote: »

Thanks for the clarifications folks. I guess I was a bit misled by my history, where I had AVCs but no employer benefit from a past employment.

I do have one further pension pot from a past private employment, mix of employee contributions, matching employer contributions and AVCs. I know that fund allows for early retirement, subject to conditions, so I might hold that as my emergency fund and go ahead with further AVCs now.

Thanks again for the feedback.

How is that possible? If there are AVC's there must be a main scheme, of which the employer has to contribute a minimum of 10% of the total main scheme contribution.

AndrewJRenko

Henry Ford III wrote: »

AndrewJRenko wrote: »

Thanks for the clarifications folks. I guess I was a bit misled by my history, where I had AVCs but no employer benefit from a past employment.

I do have one further pension pot from a past private employment, mix of employee contributions, matching employer contributions and AVCs. I know that fund allows for early retirement, subject to conditions, so I might hold that as my emergency fund and go ahead with further AVCs now.

Thanks again for the feedback.

How is that possible? If there are AVC's there must be a main scheme, of which the employer has to contribute a minimum of 10% of the total main scheme contribution.

In my case, this goes back to an employer in the 1990s. I was too young to qualify for their main scheme at the time.

Liam D Ferguson

Henry Ford III wrote: »

How is that possible? If there are AVC's there must be a main scheme, of which the employer has to contribute a minimum of 10% of the total main scheme contribution.

This has me confused too.

If it was the 1990s and Equitable Life, then it couldn't have been a PRSA. So it could have been a Personal Pension. But earliest retirement on those is 60 regardless of which company.

The "meaningful contribution" by an employer to a scheme is to the scheme as a whole and not necessarily to individual members' funds. So I suppose it's possible that Andrew was admitted into the scheme with no employer contributions due to his young age at the time.

AndrewJRenko

I've gone back over what paperwork I have. I see it was an Equitable Life Personal Retirement Bond, if that makes any sense. So I had some AVC money in the pension fund, and when I left that employer, those funds were transferred into the Personal Retirement Bond.

Does that explain anything?