Into which vehicle can an AVC be contributed?

Into which vehicle can an AVC be contributed?

• A. Personal Retirement Savings Account
• B. Buy-Out Bond
• C. Retirement Annuity Contract
• D. Section 785 policy

Answer: (A)

AVCs are extra voluntary contributions to boost your retirement savings. The vehicle designed specifically to hold these additional contributions is a Personal Retirement Savings Account, which provides a flexible, personal wrapper for extra funds outside your employer’s scheme and allows you to control investments and portability. A Buy-Out Bond is used to convert a pension fund benefit into a lump-sum investment when leaving a scheme, not for ongoing AVCs. A Section 785 policy is a life-insurance policy used in particular arrangements and isn’t the standard vehicle for accumulating AVCs. A Retirement Annuity Contract is another insurer product for retirement savings, but the typical vehicle for AVCs is the PRSA because it’s built for topping up retirement savings directly.

AVCs are extra voluntary contributions to boost your retirement savings. The vehicle designed specifically to hold these additional contributions is a Personal Retirement Savings Account, which provides a flexible, personal wrapper for extra funds outside your employer’s scheme and allows you to control investments and portability. A Buy-Out Bond is used to convert a pension fund benefit into a lump-sum investment when leaving a scheme, not for ongoing AVCs. A Section 785 policy is a life-insurance policy used in particular arrangements and isn’t the standard vehicle for accumulating AVCs. A Retirement Annuity Contract is another insurer product for retirement savings, but the typical vehicle for AVCs is the PRSA because it’s built for topping up retirement savings directly.