eir TUG AVC Scheme
The most Tax Efficient way to Save for your Retirement.
Additional Voluntary Contributions (AVC’s) are tax-efficient, extra savings you make to maximise your pension options at retirement. AVC’s can be deducted through your payroll and/or made as lump sum investments. You cannot withdraw money from an AVC fund until you retire, but you can decide to increase, decrease or cease your contributions at any time.For most Eircom & An Post employees, the benefits of the main pension plan are lower than the maximum benefits permitted by the Revenue Commissioners. Therefore, you have scope to pay AVC’s and increase your retirement benefits, without breaching the Revenue maximum benefits rule.For example, some items are not included in the pension from the main plan – e.g. overtime, bonuses, benefit in kind and a full widow’s pension. AVC’s fill this shortfall, and you can access the AVC fund at retirement.
Why make AVC’s?
- Tax relief on regular contributions.
- Tax rebate on lump sum contributions.
- Tax Free compound investment growth.
- Maximise your retirement tax free lump sum and increase your fortnightly pension.
Tax advantages of making AVC’s
Making AVC’s is an extremely tax-efficient method of saving. The Government provides workers with generous tax relief at their highest tax rate as a way to encourage pension saving. In other words, if your income levels brings you into the higher income tax bracket, then you will receive tax relief at that rate.
Limits on pension saving?
It would be great if you could save unlimited amounts into your pension fund and still receive tax relief, but because the tax breaks are so good, the Government have established limits which apply to your total contributions.
The tables below display the percentage of your income that you can receive tax relief on when contributing to a retirement fund and the net cost of saving €50 through an AVC.
- 18 – 30
- 30 – 39
- 40 – 49
- 50 – 54
- 55 – 59
- 60 – 65
- % of Earnings
- Tax Rate
- Gross Cost
- Tax relief
- Net Cost