PRSA AVC’s – Medical Professionals
In September 2009 the Revenue Commissioners introduced new rules in relation to the tax relief available on pension contributions if you are
- a member of a contributory occupational pension scheme
- have a personal pension or PRSA in respect of private income
The new rules state that you must first make any additional contributions to a PRSA AVC arrangement in respect of your HSE income.
Effectively what this means is that any additional contributions made to a pension product which is not a PRSA AVC may not be eligible for tax relief.
As the earnings cap for pensions contributions has been reduced significantly to €150,000 from January 2009 it is important to review your existing pension arrangements to ensure your benefiting from the maximum tax relief available to you.
Why PRSA AVC’s
PRSA AVC’s are a tax efficient method of saving for your retirement. You will receive tax relief up to at your marginal rate up to certain limits. Growth is free of tax and it may be used to supplement your HSE pension at retirement.
A PRSA AVC can be used for the following on retirement.
Increase tax free lump sum where full service is not expected or where there is scope due to to a difference between maximum final salary entitlement and actual final salary
Use AVC to transfer to an ARF arrangement to get the benefits associated with an ARF
You can invest your AVC through the main occupational scheme you are a member of or in a Standalone PRSA AVC. The main advantages of a standalone PRSA AVC are:
- Choice of provider – you can research the market for the best deal available
- Choice of funds – you can direct where your contributions are invested
- Transparent charges
PFP Financial Services Limited are specialised in providing pension solutions to medical professionals. We have developed a tailored suite of products to meet all of your pension requirements.
Call or contact PFP Financial Services Limited to organise a no obligation review.
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