Following months of lengthy negotiations with the Insurance companies, Cornmarket and the various unions, including the INMO, have secured a substantial reduction in the contribution charge on the AVC Scheme representing effectively a 25% reduction for the majority of members.
The timing of this reduction in charges is a welcome help to members in the short term as it will help offset the private pension levy which was announced recently by the Government to fund its Jobs Initiative for the next 4 years. But much more important in the long term, it will mean more money in members’ pockets at retirement.
This was all possible due to a number of factors including pressure from the various unions and Cornmarket on the insurance companies for a reduction in charges. In addition, savings generated for the insurance companies through Cornmarket’s innovative streamlined technology for setting up new AVC plans and for the ongoing administration of existing AVCs made the argument to reduce the charges all the more convincing.
The INMO and Cornmarket are committed to regularly reviewing the AVC Scheme to ensure it remains first in class for members. We are confident that this reduction in charges is likely to result in enhanced returns for members in the AVC Scheme at their normal retirement date.
Reduction in contribution charge from 5% to 3.75%
- The Upfront Contribution Charge is 5%. However 1.25% of the value of the regular amounts paid will be added to the fund value at maturity thereby reducing the effective Contribution Charge to 3.75%
New improved charging structure for the Annual Management Charge
- The Annual Management Charge levied has in the majority of cases been reduced to: 1% on first €40,000, 0.75% on next €100,000 of fund 0.50% on any amount over €140,000
These new charges will apply to all regular contributions made from September 2011 by the majority of AVC members. There are a minority of members who will stay on their existing charging structure as it will not be beneficial for them to switch.
For more information about the new charges please call Cornmarket on 01 408 4162.
Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland and is a member of the Irish Life & Permanent Group. Irish Life & Permanent plc is regulated by the Central Bank of Ireland. Irish Life Assurance plc is regulated by the Central Bank of Ireland. Zurich Life Assurance plc is regulated by the Central Bank of Ireland. Telephone calls may be recorded for quality control and training purposes.