Page 28 - Group Insurance and Retirement Benefit IC 83 E- Book

Have I got scope for Additional Voluntary Contributions?

Whether or not you have scope for additional voluntary contributions will depend on the
extent to which there is a gap between the maximum benefits permitted by the Revenue

Commissioners and the benefits actually being provided in the scheme. The scope for
additional voluntary contributions generally arises where:

(i) not all pay is pensioned: For example, if your scheme is ―integrated‖ with social
welfare or if you have non-pensioned pay, such as overtime, bonuses or benefits in kind.

(ii) the scheme does not provide for the absolute maximum benefit that the Revenue

would approve. Very few schemes can afford to give maximum approvable benefits.
(iii) your service with your present employer is short, so that your service-related pension

falls short of what you would receive for a full career with the same employer.

The scope to make voluntary contributions may be limited by the amount of your into
account.

You should be aware that you cannot make voluntary contributions at all unless the
rules of the pension scheme permit this, or there is a separate scheme in existence

designed to cater for them. The Pensions Act requires that, if the scheme does not offer
an AVC facility (or if a separate AVC scheme is not available), the employer must

grant access to a Standard PRSA that can be used for this purpose. Incidentally, the

Revenue Commissioners are no longer allowed to approve a single-member AVC
scheme.

The Revenue Commissioners treat a separate AVC scheme as if it were part of the main
pension scheme, because an AVC arrangement cannot exist on its own. Therefore, the

benefits of an AVC scheme must be dealt with in the same way as the benefits emerging
from the main scheme – for example, if one is transferred to a new employer‘s scheme,

they will require both to be transferred. The only time AVCs can be treated differently is

at retirement, when they can be used to invest in Approved Retirement Funds .