An Additional Voluntary Contribution (AVC) plan works to supplement the existing pension scheme provided via your employer. It enables you to make additional contributions towards your retirement fund whilst also benefitting from generous tax relief given at source by the Revenue to encourage retirement planning via AVCs. If you are paying the higher rate of tax this means that approx. 40% of your gross contributions to your AVC fund are being paid for by the state!

Contributions to your AVC Plan are deducted from your salary and placed into your personal AVC investment account. Over the years to retirement, your AVC contributions less charges will be invested in your chosen fund or funds.

You will receive a statement each year to show you the amount of contributions you have made and the current value of your fund. You can change or suspend your contributions at any time, within certain limits. At retirement you choose the way you wish to draw down the funds, subject to the Revenue regulations of the day.

Comparrison between €200 p/m saved in the bank and saved in an AVC scheme (€200 from take home pay = €396 p/m for 41%/8% tax/RSI payer)