Superannuation & retirement advice for
Lyons Financial Services provides a comprehensive Superannuation & Retirement Advice service for members of FORSA
This involves a detailed analysis of your Superannuation benefits, to identify any gaps in service which might ultimately mean a shortfall in your overall entitlements. Generally you need to complete 40 years service to qualify for maximum benefits.
If you have a shortfall in your benefits you can bridge the gap by using the Purchase of Notional Service Scheme (PNS) or the Additional Voluntary Contribution (AVC) Plan.
Purchase of Notional Service Scheme (PNS)
The Purchase of Notional Service (PNS) Scheme is available through your employer and provides you with a means to buy missed years of service. You pay a % of salary for each year of service you wish to buy. Each year that you buy, entitles you to benefits identical to those you would have received had you actually worked a year of Superannuation Service. The Scheme is guaranteed to provide these additional benefits once you continue to make the relevant additional contributions to retirement age. Contributions to the PNS are subject to tax relief at your marginal rate subject to the limits set down by Revenue.
Additional Voluntary Contributions (AVC)
An Additional Voluntary Contribution (AVC) provides you with a way to make additional contributions towards your retirement benefits. Over the years to retirement your AVC contributions accumulate in your AVC fund together with any returns made by the funds in which your contributions are invested. No tax is due on the investment returns earned in your AVC Investment Account (however, you may be subject to income tax and USC on any amount of your AVC which cannot be taken as tax free cash on retirement).Your contributions qualify for income tax relief in the same way as PNS. If you fall into one or more of the following three categories the AVC Plan may provide you with more flexibility than the PNS;
- You want more financial freedom at retirement
- You want to retire early
- You want to fund for the shortfall in your tax free lump sum only.
It is important to realise that unlike PNS the benefits under the AVC Plan are not guaranteed, ultimately they will depend on your level of contribution and the returns on the investment fund. At retirement you’re free, subject to the relevant Revenue rules, to use your AVC Investment Account to buy the retirement benefits you want.
For full details on the AVC Scheme, please contact us
The Pensions Board (www.pensionsboard.ie) has produced a useful booklet comparing the PNS Scheme and the AVC Scheme. Please click here to view this booklet. Alternatively contact your employer for details of the PNS Scheme.