What are Additional Voluntary Contributions?
Additional Voluntary Contributions or AVC’s are extra savings that you can make towards your pension
Top 4 reasons to make AVCs
1) Enhance your retirement benefits
- Increase your expected tax-free lump sum at retirement. This is potentially 25% of your retirement fund, if you are a member of DC company pension scheme or 1.5 times your salary. Please refer to your AVC Member Guide for full details on your tax-free lump sum entitlement.
- Boost your retirement income
- You may wish to protect your dependants in the event of your death after retirement. Adding dependants’ pensions has a cost attached – your AVC pot can help with this cost.
2) Tax Savings
- Any growth on your AVC investment fund is tax free.
- You also qualify for tax relief on your pension contributions. If you are on the marginal tax rate of 40%, this could work out as a potential saving of €40 for every €100 you contribute.*
You choose how much to pay and you can change your contribution rate whenever you want to.*
You decide how you want to invest your AVCs i.e. your investment funds.
*The tax relief limits are very generous and are based on your income, age and a maximum earnings limit.
Source: Irish Life 2015