An AVC is a short name for and Additional Voluntary Contribution, which is a means by which a member of an occupational pension scheme can increase of top up their employer’s occupational pension scheme benefits, within Revenue limits, at their own expense.
Who can take out an AVC?
An individual can pay an AVC if:
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They are an employee
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They are a member of their employer’s occupational pension scheme, and
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Their employer provides a facility for members of the scheme to pay AVC’s
Structure
AVCs will be either
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Defined Contribution: benefits provided by the AVC are those which can be secured by the accumulated vale of AVCs paid by the member.
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Defined Benefit: defined level of retirement benefit is promised for a particular level of AVC.
Different ways to pay AVCs
AVC’s may be structured in one of three ways:
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As an AVC to the employer’s occupational pension scheme itself. Or
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As an AVC to a separate associated AVC occupational pension scheme established by the employer: this will usually be a group AVC scheme
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As an AVC to a stand alone PRSA
Taking AVC benefits
AVC benefits must be taken at the same time as the individual takes benefits from the employer’s main occupational pension scheme.
