TCA- Contributory State Pension-Pension Reduction.

[dubman1]

The proposed change to Total Contributions Approach in the forthcoming Pension Reform Legislation due to be published soon will I believe affect adversely a significant number of Public Servants who retire prior to this legislation becoming law (Jan 2024 as per government proposal).

Those Public servants who are post 1995 entry and who up to now can retire with a supplementary pension under the current law but who do not have the total number of PRSI contributions necessary for a larger pension under TCA rules can get a higher pension under the old system when they reach age 66.

If the new legislation goes through unaltered ,likely hundreds if not thousands of public servants who retired between 60 and 65 years of age with a Supplementary Pension before 2024 will see their pensions reduced considerably .
This will be a law which will retrospectively apply negatively to people who availed of their pensions, who are legally entitled to claim a supplementary pension without the right to work and then will find their State Contributory Pension reduced after the fact.

The fact ,or not ,whether the TCA approach is fair and right is irrelevant imo as the law will effectively be retrospective to those who have already retired under the current legislation.

I believe the Unions in the Public Service are completely unaware of the consequences for those who retire prior to 2024 with a supplementary pension.


I think anyone who is post 1995 Entry and who retires anytime during the five years before Jan 2024 will find their final pension at age 66 cut.
If other people ,like me ,find themselves in this category it would be time to start canvassing Union Reps and TD's .

 

[Conan]

The TCA is a fairer system to the old Totals and Averages method. Under the older system, it is possible for someone with only 10 or 20 years to get a full State Pension. Whereas under the TCA it will require 40 years of contributions to get the full Pension.
The proposal to move from the Total and Average calculation to the TCA is going to be phased in over a number of years. So I don’t see the proposed change significantly impacting Public Servants who retire prior to 2024. And if a post 1995 60 year old retires in say 2023 then presumably they will have circa 27 years of A Class PRSI (perhaps with an additional history of A prior to 1995).

 

[NoRegretsCoyote]

This will be a law which will retrospectively apply negatively to people who availed of their pensions, who are legally entitled to claim a supplementary pension without the right to work and then will find their State Contributory Pension reduced after the fact.

The fact ,or not ,whether the TCA approach is fair and right is irrelevant imo as the law will effectively be retrospective to those who have already retired under the current legislation.

Without sight of the legislation isn't this total speculation?

 

[Groucho]

I tried to explain how the proposed changes to the SC Pension would be implemented - over the next 11 years - in post no. 8 on this thread.
I have a personal interest in this, as Mrs Groucho will be affected.

Note in particular my final sentence!

What Contributory pension will we get ?

My wife and I moved to Ireland in the tax year 1999/00, I am trying to work out what contributory pension we will be entitled to. My wife, an EU citizen who never lived in Ireland previous to 2000 has paid 52 class S PRSI Contributions every year for the last 13 years and will continue to pay...

www.askaboutmoney.com

 

[Early Riser]

If the new legislation goes through unaltered ,likely hundreds if not thousands of public servants who retired between 60 and 65 years of age with a Supplementary Pension before 2024 will see their pensions reduced considerably .

The pension in this scenario will not be reduced.

For example, if a post-95 retires at 60 with a Occupational Pension of €18K and a subsequent Supplementary Pension of €7K then they will continue to receive at least this amount after State Pension Age. That is whether it is the TCA approach or not. Either the retiree is awarded at least €7K in the State Pension or they will be eligible to continue to receive a partial Supplementary to top the total up to this amount.

In real life this is likely to apply to relatively few, ie, most will get either the same, or more, in State Pension as they were getting in Supplementary (with no "top up"). If after retiring the person builds up more qualifying PRSI (either through employment/self-employment or through credited contributions) then they will get more in State Pension than they were getting (or eligible for) in the Supplementary.