Additional Voluntary Contributions

What are Additional Voluntary Contributions?

Additional Voluntary Contributions or AVCs are extra contributions that you can make on top of your company pension scheme. These contributions are an excellent way of maximising the revenue-allowable retirement-benefits you can take if you will not have maximum service on retirement.

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Employees who are members of pension schemes in the private sector and public sector who at retirement will not have maximum service of forty years commonly use AVCs. The value of your AVC fund on retirement can be used to either increase your pension or is commonly used to fund 1.5 times your final salary as a tax-free lump sum.

Contributions to your AVC fund (within revenue limits) will qualify for tax relief at up to 40% while the fund will grow tax free. If in the future you were to leave your employer and join a new employer with no pension scheme you can continue to make contributions to your AVC and these would be considered as PRSA contributions rather than AVC contributions.