Incentivised Scheme for Early Retirment

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In the Public Service....
Eligible civil servants etc at 50+ may retire
without ACTURIAL reduction of pension entitlements.
What does this mean?Do they get added on years up
to their retirment age ?Can see a mass exodus if this
is the case especially if lump sums are going to be
taxed in the next budget.
 
If a person has 40 years service at full retirement age, their pension is 40/80ths (i.e. half) of their salary.

If that person retires early (e.g. at age 58) with 40 years service, they don't get the full 40/80ths pension, instead they get a percentage of that 40/80ths because they're claiming their pension for 7 extra years. This is actuarial reduction.

The changes from May will allow people to retire early and get the full value of whatever pension years they have accumulated.
 
Thank you GMann,and there would be differences if you were part of the 1977
scheme and pre the 1995 changes.
 
I'm still a bit confused about this and maybe someone can help. I know somebody who is a psychiatric nurse and is therefore eligible to retire at 55 years of age. They are nearing that age now but don't have full service as they broke their service therefore they have to pay back a marriage gratutity in order to get full pension otherwise they will receive a reduced lump sum and reduced pension. Does this new scheme announced yesterday mean that they can now retire with full pension and lump sum without paying this back?
 
Still not sure how the pension is calculated if one was to retire before 65.

What is the situation with the following scenario?
Age:54.
In public service for 10 years.
Normal retirement age is 65.

If a person was to retire now at aged 54 under the new early retirement plan, is the pension calculated on the 10 years actually spent in public service or on the 19 years that would have accumulated up to the age of 65?

Many thanks.
 
Echelle,

The pension would be calculated on the actual years of service already done, in your example 10 years. So the pension would be 10/80ths (or 1/8th) of salary.
 
Am I right in assuming that if one opts for the PS Early Retirement Scheme that they are still liable for Income Levy but not liable for Pension Levy?
 
Yes, Welfarite, you are correct - exemptions for the income levy only apply to over 65 year olds (earnings under 20k for single person, 40k for couple).
 
It seems to me that public servants over 50 will in fact be paying 73.9% tax on their additional income of salary over pension in taxes. I am calculatying this by 41.0 % income tax
4.9 % PRSI / Health Levy
2.0 % Income Levy
This is a total of 47.9 %

Public Servants also pay 6.5% Superannuation and
6.5% Pension Levy.
This 13% is not payable if they retire so equates to 26% on their non pension portion of their salary. So a public servant with full service, ie entitled to a pension of 50% of their salary will be paying 47.9 %+ 26% = 73.9% income tax.

Are these calculations correct and if so God help us!
 
Maybe Gipiman can answer the following?
When I retire at 65 from the public srvice I will have spent 19.5 years as a public servant. I was employed initally in a temporary capacity and did not subscribe to the public servant pension, instead I subscribed to a private pension scheme. On retirement is the Lump sum calculated on the years I subscribed to the public service pension or on the amount of years working in the public service?
 
How would a public servant fare out if they took early retirement on ill health grounds

Age 46
26.5 years service (prior to sick leave)
Currently on pension rate of pay
 
If they retire on ill-health I believe they would receive an ill-health addition of 6.67 years. Therefore benefits would be calculated on 32.17 years.
However it would depend on sector of the public sector he/she is in as the schemes can be different eg guards receive double years for each year over twenty years service.
 
Echelle15 said:
Maybe Gipiman can answer the following?
When I retire at 65 from the public srvice I will have spent 19.5 years as a public servant. I was employed initally in a temporary capacity and did not subscribe to the public servant pension, instead I subscribed to a private pension scheme. On retirement is the Lump sum calculated on the years I subscribed to the public service pension or on the amount of years working in the public service?
Click to expand...
As far as I know , any temporary service you had before you contributed to the public service pension, will have to be paid for in order for you to get max benefit for the years you have worked. This is now calculated at full actuarial cost and may be quite expensive. It dose'nt matter that you had a private pension contribution. You would be well advised to talk to your Superannuation Office about your options. Mind you, they are probably snowed under at present with request from the VERs !!!
 
Can someone tell me how to caluclate what pension I would get for 27 years experience please?
 
Take your salary, divide it by 80 and multiply by 27,= annual gross salary. To calc lump sum, take salary, multiply by 1.5, divide by 40 and multiply by 27.

Ansd here's another question; if you take unpaid term-time in the year of retirement, I presume the full yearly salary is used in the cacl.?
 
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