My occupational pension is reduced by the amount of the State Pension.

[ppmeath]

So here I go again, just to assure my self that I'm doing it correctly.

3.333333 CSP = 40,578.64 pa

(3.3333333)(233.30x52.18)(1/200)(35yrs) = 7101.26 pa

(50k - 40,578.64)(35/80) = 4121.85

Work pension payable at age 62 = 11,223.11

Almost. 233.30 x 52 = 12,131.60 x 3.333333 = 40,438.66.

The first part of the formula is 1/200 of your salary below 40,438.66 = 202.19, multiplied by 35 years service = 7,076.76

The second part is 1/80th of the balance of your salary over 40,438.66 <50,000> = 9,561.41/80= 119.51, multiplied by 35 years = 4,183.08.

Both these totals are added together to provide the occupational part of the pension, the calculation is to "offset" the part of the pension that is supposed to be taken care of by the SW benefit, combined they total 11,259.84.

35/80 class D would get 50k*35/80 = 21,875

Yes, that is his entitlement and it is also your entitlement. The make up of your pension is different, not the entitlement.

So shortfall of 10,651.89 to be covered by supp pension.

No. All your social welfare benefits are "integrated" into your occupational scheme. If you have worked for 35 years and paid PRSI for 35 years and are "fully insured" and when both your occupational pension, which is 11,259.84, is combined with the social welfare payment which is 12,131.60, and it provides you with your 50% pension entitlement - then there is nothing to supplement.

Here it is again from the handbook:

"In calculating pension at paragraph 11.7 above, it is assumed (a) that the officer
concerned is always entitled to social insurance benefits and (b) that he/she is eligible
for the maximum personal rate of such benefits. However, depending on a particular
individual's PRSI contribution record, it may transpire that - through no fault of the
officer concerned - he/she either has no entitlement to the specified social insurance
benefits, or even if so entitled, is eligible for less than the maximum personal rate of the
Contributory State Pension payable to a single person without dependants. In such
cases, the officer may be paid a supplementary pension, to take account of the
difference between their personal circumstances and the general assumptions on which
standard pension calculations are based."

It continues:


"In such cases, the supplementary pension payable comprises the difference (if any)
between
(a) the amount of the actual pension awarded to the officer plus the amount (if
any) of the personal rate of social insurance benefit or pension payable to
him/her; and
(b) the amount of the pension which would have been awarded to the officer
if that pension had been calculated by reference to the calculation method
for pre-6 April 1995 officers set out at paragraph 11.8."

We calculated your "occupational" pension as 11,259.84, we calculated the pre 1995's pension as 21,875, your occupational pension of 11,259.84 is then to be added to whatever social welfare payment you are entitled to.

Only after these two are combined and if they do not amount the same pension as the pre -1995 member - then the supplementary pension comes into play.

For example, if you only had entitlement to a reduced rate of the state pension and if this was due to a PRSI gap due to illness (or unemployment), and if you were entitled to the minimum rate, which is approximately 95 euro, then the supplementary pension would be the difference between your 11,259.84 plus 95 x 52 = = 16,199.84.

Supplementary pension payable = 5,675.16.

Again from the booklet:

"Thus, in the case of an officer with maximum service (40 years) who retires at age 65 and has no dependants,
his/her total pension benefit (i.e. social insurance pension plus civil service pension)
would amount to 50% of pensionable remuneration (the same total award as is payable
to a pre-6 April 1995 appointee)."

I think 40,578.64 should be 40,434.62?

It is 3.333333 the current rate of the state pension, from the booklet.

"31/3 times the current rate of CSP"

 

[ppmeath]

@Protocol - please go to page 80 of the booklet, section U:

"(u) if the scheme provides an integrated pension (within the meaning of section
59C of the Act) the inclusion of a statement describing integration in the form
set out below or in such other form as the trustees deem appropriate:
“This scheme is an integrated scheme meaning it is one that
takes account of Old Age (Contributory) Pension (or other
similar contributory benefits payable under social insurance) in
designing the overall pension package. "

Our package is 50% of our final salary on retirement:

"An integrated scheme looks at the Old Age (Contributory) Pension as part of the total
pension package. Both employers and employees make payrelated
social insurance (PRSI) contributions and these in turn
entitle scheme members to Social Welfare benefits.
Integration is used as a means of taking into account the
benefits payable under the Social Welfare system to calculate –
· the amount of occupational pension required so that the
combined pension from both sources is at the level being
aimed for in designing the scheme;
· the level of contributions payable by the employee towards
the cost of his or her occupational pension.”

The design of the scheme is to provide you with the same package as your pre 1995 counterpart who walks away with 50%.

 

[IsleOfMan]

It's not correct to think of schemes deducting the state pension as if they are taking something off you.. the level of benefits is set out in an integrated way to provide for 2/3 ( or whatever ) your final salary including state pension. Employee contributions are also reduced by this integration.

The above thread has become so complicated it is difficult to follow. Long convoluted posts are not helping matters.

"Employee contributions are also reduced by this integration". Is this not the nub of it? The employee made his pension contributions over the years, not on his gross salary but on his gross salary amount less the state pension amount?

In other words he was under funding his occupational pension.

 

[ppmeath]

The above thread has become so complicated it is difficult to follow. Long convoluted posts are not helping matters.

"Employee contributions are also reduced by this integration". Is this not the nub of it? The employee made his pension contributions over the years, not on his gross salary but on his gross salary amount less the state pension amount?

In other words he was under funding his occupational pension.

I'm sorry if the posts seem long and convoluted - it's a complex matter that can't be explained in simpler terms.

Both the employer and the member made the contributions on the basis that when the occupational pension and state pension were combined (integration), that the combined total would amount to the pension that the scheme was designed to provide. For PS employees that is 50% of final salary, for the private sector it is generally 2/3rds.

http://www.citizensinformation.ie/e...l_finance/pensions/occupational_pensions.html

"Occupational pensions and social welfare pensions
Occupational and personal pensions operate independently of the social welfare pension system (Social welfare pensions include contributory and non-contributorypensions) and there is no statutory link between the two. However, it is common for occupational pensions to take into account the level of social welfare pension received in calculating the level of benefit. For example, some schemes provide for a benefit, which, together with the social welfare pension, will give you a half or two-thirds of your final salary. This may be done when you start to receive your pension but your occupational pension may not be subsequently reduced because your social welfare pension is increased.

Such schemes are sometimes called integrated or co-ordinated schemes."

Since 2014 when the state pension age was increased, payment of that no longer exists, so when you combine the occupational part and the state pension part - which is zero, then it doesn't provide the 2/3rds.

When Brendan Howlin introduced the increase in the state age, he also changed the minimum retirement age of new entrants to the public sector.

He linked their retirement ages to the age of the state pension.

But many in private DB schemes are forced to retire at 65, they will face enormous difficulties getting new employment and haven't been given any chance of making up the shortfall in contributions - because they are forced to retire.

The employers also won't retain them in employment after 65, allowing them to earn their income until the state pension becomes payable.

There is a problem for those nearing retirement and it shouldn't be left to these people to "suck it up".

 

[jjm]

In Jan 2014 Howlin and burton done away with the state Transitional pension For those between age 65 and 66 Which was 230.30 euro,










Government raided the pension funds ,Employers will have to replace the money in DB schemes , Employees nearing retirement age seen government taking more out each year than Employees were putting in