| SECTION 1 |
| Introduction |
| What are the An Post and An Post Trade Union Group AVC and Life Cover Schemes? |
| The Schemes, effective from 1 January 2003, are designed to allow you to make additional contributions, in a tax efficient manner, to provide for: |
| (a) |
extra benefits for your retirement and/or |
| (b) |
a tax-free lump sum for your dependants in the unfortunate event of your death prior to retirement. |
|
These are two separate Schemes and you can choose to opt for either one or both.
The appointed consultant to the Schemes is Halligan Insurances.
|
| Q. |
Who is eligible for the Schemes? |
| A. |
All employees who are members of the An Post Main Superannuation Scheme. |
SECTION 2
AVC (Additional Voluntary Contribution) SCHEME
| Q. |
What are AVCs? |
| A. |
AVCs are a tax efficient method of making personal long term savings for your retirement. They may be used to supplement your pension benefits under the An Post Main Superannuation Scheme (called the "Main Scheme" hereafter) and the An Post Spouses' and Children's Contributory Pension Scheme. |
| Q. |
Why should I consider contributing to the AVC Scheme? |
| A. |
You may wish to make extra pension provision by: |
 |
enhancing your own pension and/or gratuity; |
|
|
enhancing your Spouse's pension. |
| Q. |
Does the AVC Scheme qualify for tax and PRSI relief? |
| A. |
Yes. Under current tax laws you will get tax and PRSI relief on both your AVC Scheme and any contributions to the An Post Main Superannuation Scheme and the An Post Spouses' and Children's Superannuation Scheme - provided that the combined amount in any one year does not exceed 15% to 30%, depending on your age, of your taxable earnings in that year i.e. the total of your basic earnings, allowances, overtime etc.
This tax relief will be applied automatically by the Company when making deductions from pay. Please see examples below:
|
| Gross Contribution |
€25 per week |
Net Contribution |
| Tax @ 42% |
Class D PRSI (2.95%) |
€13.76 per week |
| Tax @ 42% |
Class A PRSI (6%) |
€13.00 per week |
| Tax @ 20% |
Class D PRSI (2.95%) |
€19.26 per week |
| Tax @ 20% |
Class A PRSI (6%) |
€18.50 per week |
| Q. |
How much may I contribute to the AVC Scheme? |
| A. |
AVC limits are now age-related for employees in Company Pension Schemes, as follows; |
| Age(Attained During Tax Year) |
Personal Contribution limit (As a % of Schedule E Earnings) |
| Up to 30 years of age |
15% |
| 30 up to 39 years of age |
20% |
| 40 up to 49 years of age |
25% |
| 50 up to 54 years of age |
30% |
| 55 up to 59 years of age |
35% |
| 60 & Over |
40% |
There are also benefit limits laid down by the Revenue Commissioners and this may mean that you will not be able to make contributions up to the limits specified above. If the amount of contribution you choose to make to the AVC Scheme is likely to breach these benefit limits you will be notified and asked to choose a lower level of contribution.
| Q. |
Can I make once-off contributions? |
| A. |
Yes. You can make once-off contributions at any time to increase your retirement benefits, subject to certain Revenue limits (These limits are shown in the previous table. The minimum premium is €500). |
| Q. |
Will An Post contribute to this AVC Scheme? |
| A. |
No. An Post contributes towards the Main Scheme. Any contributions towards the AVC Scheme are voluntary and will be made by you alone. |
| Q. |
How much should I contribute to the Scheme? |
| A. |
This is a personal decision for each member but AVCs are a very effective way of securing additional pension benefits. |
| Q. |
What will my fund be at retirement? |
| A. |
If you pay €25 per week out of your salary into the AVC Scheme, an estimated retirement fund would accrue as follows, assuming returns of 6% and 8% respectively: |
The figures in the pop-up table assume a current salary of €30,000 p.a. escalating at 3% p.a. for an investment return of
- 6% p.a., and 4% p.a. for an investment return of 8% p.a.
- The figures for the estimated retirement fund are based on the following assumptions:
| (a) |
The gross investment returns stated. The assumed gross investment returns are not forecasts because the value of the units may grow at a faster or slower rate than assumed and the value of units may be expected to fall, from time to time, as well as rise. |
| (b) |
The continuation of current expense charges except for a policy fee which is assumed to increase at 2% p.a. and 3% p.a. for growth rates of 6% p.a. or less, and those exceeding 6% p.a., respectively. |
| (c) |
The contribution rate is assumed to increase at 3% p.a. and 4% p.a. where the gross investment return is
• 6% p.a. and 8% p.a. respectively. |
| (d) |
Premiums are received by Eagle Star on a monthly basis. |
| (e) |
Somebody aged 25 next birthday is assumed to be exact age 24 years and 6 months. |
| Q. |
Where will my contributions be invested? |
| A. |
Following on a comprehensive selection process Eagle Star has been chosen as the AVC provider for the Scheme, with Halligan Insurances acting as Consultants. Eagle Star invests the money in a range of short and long term funds, details of which are set out below: |
|
Fund Name |
Fund Description |
Indicative Equity Range (% of the value of the fund) |
| Dynamic Managed |
An aggressively managed unit-linkedfund with a high equity content. |
75% - 100% |
| Performance Managed |
A unit-linked fund offering a portfolio of equities with some exposure to bonds. |
65% - 90% |
| Balanced Managed |
A unit-linked fund offering a balancedportfolio of equities and bonds. |
50% - 75% |
| Super CAPP |
A unique fund that offers equity exposure while protecting investors from the immediate volatility of equity investment. |
30% - 50% |
Eagle Star offers an investment strategy which automatically redirects regular contributions to switch units between funds at preagreed future dates. At present Eagle Star would redirect your AVC contributions as follows:
| Years to go to Retirement at Age 60 |
Target Fund |
| 25 or more: |
Dynamic |
| between 15 and 25: |
Performance |
| between 10 and 15: |
Balanced |
| Less than 10: |
Super CAPP |
With 10 years to go to retirement, your unit holdings will gradually be switched into the SuperCAPP Fund. The key advantage to this approach is that the investment fund switching strategy on your AVC plan is done on a sensible basis. This strategy is more aggressive at the start of the term and gradually becomes less aggressive and more cautious as you approach retirement age. The SuperCAPP fund maintains an exposure to equities as retirement approaches and does not rely solely on cash/bonds.
| Q. |
What options will I have when I retire? |
| A. |
When you retire you will have the following options in relation to the use of your retirement fund: |
You can use it to provide one or more of the following benefits:
- tax-free lump sum,
- a pension for your life, with or without a guaranteed period of payment,
- a pension for your spouse, child or any other dependant if you die after retiring,
- yearly increases on the pensions above to protect them against inflation.
All of the benefits above must be within the limits set out by the Revenue Commissioners (as referred to on page 2 of this booklet).
If, having taken the maximum tax-free lump sum, there is a balance in your retirement fund, there are a number of options open to you:
Option 1
If you have a guaranteed income for life of €12,700 p.a. or more from other sources, you may do one of the following:
- purchase a pension with this amount, and/or
- invest in an Approved Retirement Fund (ARF).
Option 2
If you do not have a guaranteed income for life of €12,700 p.a. or more from other sources, you may do one of the following:
- purchase a pension with this amount, or
- invest a minimum of €63,500 (or the value of your Retirement Fund) in an Approved Minimum Retirement Fund (AMRF), or
- use any surplus over €63,500 as in Option 1 above.
Detailed advice in relation to ARFs and AMRFs can be obtained, if required, through the Eagle Star Helpline at 1850 666 777.
| Q. |
What happens to my ARF or AMRF in the event of my death? |
| A. |
When you die, any residue left in these Funds will pass to your estate. In certain circumstances tax will be deducted from your Fund before being passed to your estate. |
| Q. |
What happens if I die in service? |
| A. |
The accumulated value of your AVC fund will be payable to your estate. |
| Q. |
What are the services and charges relating to the Scheme? |
| A. |
Services will encompass: |
Member Services
An ongoing member communication plan, to include:
- Fund values - available online and/or on request. They are also included in the Benefit Statement.
- Benefit Statement - issued annually.
Administration Services
- Maintenance of detailed Scheme and member records
- A comprehensive claims service.
Investment Services
- Ongoing management of member's investment funds
- Access to a range of investment funds and strategies
- Provision of fund performance information to the scheme Trustees.
Documentation Services
- Documentation of the Scheme in accordance with relevant legislation
- Application to the Revenue Commissioners for 'Exempt Approved Status'
- Certain documentation required to comply with the requirements of the Pensions Acts.
To cover the cost of providing these services the current charges are as follows:
- An annual charge of 1% of the fund
- A €2 monthly administration fee.
These charges will be deducted by Eagle Star from the fund built up by your weekly/fortnightly contributions.
| Q. |
Who will look after the AVC Scheme? |
| A. |
The Trustees of the Main Scheme have agreed to oversee the running of the AVC Scheme. It will be their job to make sure that your interests are protected at all times. |
| Q. |
What happens if I leave An Post? |
| A. |
If you leave An Post your cover ceases. The main options available at that point are to have the value of your AVC scheme:
- Made paid-up
- Transferred to a new employer.
- Transferred into a pension bond
|
For all enquiries on the An Post AVC Pension Top Up Scheme:
Call the Eagle Star Helpline 1850 666 777 or
Halligan Insurances 01-8731033 |