Superannuation query

[lastbuilders]

Hi,

I have been offered a position with a public body and the contract has the following clause.

"Persons who become pensionable officers of the company ,who are liable to pay the Class A rate of PRSI contribution will be required in respect of their superannuation to contribute to the company at the rate of 1.5% of their pensionable remuneration plus 3.5% of net pensionable remuneration (i.e. pensionable remuneration less twice the annual rate of social insurance old age contributory pension payable at the maximum rate to a person with no adult dependant or qualified children).

Persons who become pensionable officers of the company who are liable to pay the Class D rate of PRSI contribution will be required, in respect of their superannuation, to contribute to company at the rate of 5% of their pensionable remuneration. All persons who become pensionable officers of the company are required, in respect of the Local Government (Spouses and Children’s Contributory Pension) Scheme, 1986, to contribute to the company at the rate of 1.5% of their pensionable remuneration in accordance with the terms of the Scheme."


Can anyone "translate" this into easy to understand terms?

Lastbuilders

 

[oysterman]

Seems clear enough. What, exactly, don't you understand?

 

[Alias]

My take is that if you are pensionable (if you're on a fixed term contract you probably aren't) you will pay different amounts into your pension scheme, depending on your PRSI stamps.

You would be Class A, which means the first will apply. You will pay into the pension 1.5% of your pre-tax salary, and the remaining 3.5% on your salary after state benefits have been deducted. Class D is and old class for superann employees who do not receive many state benefits, including a state pension.

PRSI Classes: http://www.welfare.ie/topics/prsi/prsiclasses.html

 

[ajapale]

The paragraphs describe the pension deduction rate made for
a)members of superannuation schemes who are integrated (coordinated) with social welfare.
and
b)members of superannuation schemes who are not integrated (cooordinated) with social welfare.

Coordinated means the same as integrated.

If your scheme is coordinated then you are paying full PRSI but your superannuation deduction is reduced somewhat. (and your superannuation benefits are reduced somewhat as well).

If your scheme is not coordinated then you are paying lower PRSI but your superannuation deduction is somewhat bigger. (5% of the gross superannuationable salary in this case).

Net superannuationable salary is calculated as Gross SA salary less twice the current OAP. (some times the factor is 1.5 OAP depending on the design of the scheme).

I you search the forum for integrated or coordinated there are some better explanations.

aj

 

[gipimann]

Persons who started work in the public service before April 1995 pay Class D PRSI, don't qualify for a State Pension (contributory), so pay more superannuation.

Persons who started work in the public service after April 1995 pay Class A PRSI so pay less Superannuation, and qualify for a State Pension (contributory) on retirement as well as a pension from the employer.

State Pension (contributory) is the new name for Contributory Old Age Pension.