r/irishpersonalfinance Sep 21 '21

What age are you, and how much is in your pension(s)? Retirement

With pensions in the news, I thought this would be an interesting discussion.

I am 30, and have 1 pension that currently contains €62,399.

I currently contribute 15% and my employer contributes 6%. Come January, I will up my contribution to 20%. I would have 2 pensions, but I merged them as my current one has much lower fees. My pension is 100% in Indexed Global Equity.

43 Upvotes

View all comments

1

u/vivbear Sep 25 '21

Can someone explain to me how AVC work or where I can work out how much AVC I should pay into my pension Thanks in advance

2

u/0mad Nov 04 '21

In a DC pension with an employer match, it works like this.

Say you are 31. Your employee contributes 5% if you contribute 5%. In a DC pension, employer contributions are excluded from the tax free limit, which at 31 is 20%

Anything you contribute after that 5% is considered an Additional Voluntary Contribution (AVC). Your contribution (5% in this case) + AVC is eligible for tax relief up to 20% here.

So going into your pension every month is:

5% (employee) + 5% (employer) + AVC%

Roughly.