Public Sector - Buy back years

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ctlsleh

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Hi,
My wife is a public sector worker, she's been job sharing for years. I'm encouraging her to buy back years, as her pension is secure vs mine (private sector) which is at the behest of market performance.
Shes earning about €34K gross and has investigated the buyback option.
The Dept estimate it would cost her about €1200 per month to buy back the missing years, however this would in effect be all of her current earnings.

She's 54, so is only in theory allowed to contribute 10K per year tax free (30% of 34K), how does it then work when it comes to public sector schemes in that context?

I am maximising my private Tax free pension contributions already up to the max of the tax free 115K limit.

Would people agree this is the best strategy?
 
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She’s pre-95, am incorrect in thinking that if she worked 3 years full time she could retire based on that final salary with the whatever 80ths years service vs trying to buy back years?
It seems like a no brainer?
 
So she's 54.

How many years service does she have at the moment?

At what age would she like to retire?

What work pattern is she on - 50%?
 
ctlsleh said:
She’s pre-95, am incorrect in thinking that if she worked 3 years full time she could retire based on that final salary with the whatever 80ths years service vs trying to buy back years?
It seems like a no brainer?
Click to expand...
She does not need to return to full time for this. Pension is always calculated on the full-time equivalent salary for the post. It is the duration of service that is adjusted, eg, 20 years in a half-time post equals 10 years of service for pension purposes.
If she is retiring she can make a quick win without buying back years by using a last minute AVC to top up her tax free lump sum. Providing she has at least the equivalent of 20 years full-time service, the tax free lump sum can be topped to 120/80 of pensionable remuneration (full-time equivalent salary plus any pensionable allowances).

PS. I see she is only 54. If she retires before 60 she can only get access to her pension with an actuarial reduction (Cost Neutral Early Retirement). Otherwise, she would have to take a Preserved Pension, ie, no lump sum or annual pension until 60.
 
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Thank you……Is there any advisors you’d recommend that can walk through the numbers…..not cornmarket?
She also has a small AVC with them to try to maximise the lump sum option.
We’re trying to figure out how we maximise her guaranteed pension, while she wants to retire asap and definitely not work beyond 60
 
are there any calculators available where we could play with the numbers to figure out the implications of buying back vs not buying back years?
thanks again for the advice
 
You use the Civil Service Pension Modeller, link below. Choose "Civil Servants Recruited Before 6 April 1995". You cannot ask directly for the pension value of buyback years but you can obtain the result easily by playing around, eg, compare her pension based on her real starting date with the pension for a start date 3 years earlier ( to get the pension value of 3 years buyback). It will also give you an estimated cost of buy back. The modeller gives approximate estimates - it is not an actual quote. It is also more complicated if you want to consider buyback combined with Cost Neutral Early Retirement - but it can be done, provided you are doing any buyback by lump sum.

 
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