Group Additional Voluntary Contribution (AVC) Schemes
A group AVC scheme is an excellent member benefit for those who already contribute to Superannuation. It gives members a mechanism to fund for their retirement and receive benefits additional to those offered by the main scheme. AVCs are typically used;
- To fund for shortfalls in pension and gratuity through missing years
- To fund the difference between Superannuation maximum benefits and Revenue Maximum benefit
- To fund the amount provided by the Contributory Old Age Pension for those members who rely on it.
- To make contributions against non-pensionable income such as overtime and on-call income.
- To provide for spouses and children benefits in the event of death.
- To provide access to an Approved Retirement Fund in retirement which brings it’s own benefits.
- Last Minute AVCs for tax free cash only for those missing years or those with more than 40 years service past Normal Retirement Age.
It has certain tax advantages designed to encourage members to save for retirement however there are tax implications in retirement which must be taken onto consideration.
AVCs are a defined contribution form of pension. In essence the benefits at retirement are determined by how much is contributed during the lifetime of the policy. However, the benefits are also hugely influenced by;
The lower the charges on a scheme, the greater the value of the members’ funds at retirement.
The greater the rate of return delivered, the greater the value of members’ funds at retirement.
PSRA’s low-cost, independent ethos ensures we can deliver AVC schemes with the best performing funds managers at the lowest possible charges.