Q. My employer has been paying 5% into my pension which I match for the last 23 years. 10 years ago, I set up an Additional Voluntary Contribution (AVC) scheme which is now worth c. € 67,000. My wife has to undergo a serious operation which will cost us over € 23,000 and we have no savings of note. Is it possible to stop the contributions and cash in this AVC ? I am 61 years old. Thanks Greg – Kimmage Dublin 12
A. I empathise with you on your situation Greg and well done on setting up the AVC 10 years ago – prophetic ! Less than 50% of the current working population have made provision for their retirement. With auto-enrolment being introduced this coming September you are ahead of the posse. As to your question, because you are aged over 60, you could go to your employer and request permission from the trustees to commute your pension AND AVC now rather than the probable age of 65 – 25% of the total fund will be tax free and you will be forced to take the balance by way of an annuity ( current annuity rates c. 4% so a € 300,000 fund, with € 75,000 tax free, would mean € 750 per month taxable til you die ) You cannot commute the AVC on its own but you could stop the payments now. If your employer agrees, it will certainly pay those operation costs but it may be better to hold off until you actually retire. It will be up to the trustees but you certainly have a just cause. Alternatively, a credit union or an post money loan ? Take professional advice and best wishes.