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



## SlugBreath

My occupational pension also takes in to consideration the state pension.

My pensionable salary on leaving employment is different to the actual salary that I was on because there is an offset made for the state pension.

I left my employment 10 years ago on a deferred pension. Will my pension plan calculations take in to account the state pension amount as it is now or as it was when I left 10 years ago?

I cannot get a state pension until I am 66. My occupational pension will be paid as and from next year when I am 65.  

Should I get a higher occupational pension for the one year that I am not in receipt of the state pension? It seems unfair to offset a state pension that I will not be able to claim.

If I cannot for any reason claim the state pension will my occupational pension make up the shortfall?


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## Steven Barrett

It is quite common in defined benefit schemes for the scheme to take the state pension into consideration. It is purely to reduce the cost of providing the pension benefit (the OAP would cost you over €300,000 if it was bought from an insurance company) and almost all defined benefit schemes have this in their rules. 

I doubt the scheme rules have provision of making up the OAP if you are unable to receive but you need to have a look at what the scheme rules say. As a deferred member, you are entitled to ask for a copy. 

Steven 
www.bluewaterfp.ie


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## ppmeath

SlugBreath said:


> My occupational pension also takes in to consideration the state pension.
> 
> My pensionable salary on leaving employment is different to the actual salary that I was on because there is an offset made for the state pension.
> 
> I left my employment 10 years ago on a deferred pension. Will my pension plan calculations take in to account the state pension amount as it is now or as it was when I left 10 years ago?
> 
> I cannot get a state pension until I am 66. My occupational pension will be paid as and from next year when I am 65.
> 
> Should I get a higher occupational pension for the one year that I am not in receipt of the state pension? It seems unfair to offset a state pension that I will not be able to claim.
> 
> If I cannot for any reason claim the state pension will my occupational pension make up the shortfall?



Can you give more details regarding your employment. Are you a PS worker? 

Are your Social Welfare entitlements integrated into your Occupational Pension Scheme? 

What is your pension benefit? E.G - 40/80ths. 

Can you check the terms of your pension scheme, check what your "minimum retirement age" is - this is the age at which your "full" pension entitlements are payable to you.

Your pensionable salary that you retired on - is the salary that your pension entitlements should be based on.


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## Ravima

Quite a few DB schemes deduct 150% of the state pension.

its only at times like this, one is envious of the Public Sector pensions!


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## JoeRoberts

Regarding the loss of pension, your issue is with the government, not the pensions scheme. The warning time for pension date changes was far too short and was not properly challenged. Think about the opposition to a few hundred euro water charges, but the more significant pension changes got no protest.

Your pension is set at your time of leaving based on your salary and state pension at that time. It gets a small annual revaluation for inflation.

The wording on most scheme was poor and to avoid a challenge most were advised to change the trust deed to make it clear that they did not have the liability for the lost state pension.  I don't know of any challenges but it would have been interesting to see how they would have panned out.

For the lost year, you will be able to claim the smaller unemployment benefit for the first 9 months after which it will be means tested. I don't believe they look for proof that you are looking for work in this period.

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.


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## elacsaplau

JoeRoberts said:


> Think about the opposition to a few hundred euro water charges, but the more significant pension changes got no protest.



Interesting observation!



JoeRoberts said:


> The wording on most scheme was poor and to avoid a challenge most were advised to change the trust deed to make it clear that they did not have the liability for the lost state pension.



Are you familiar with the detail here? I'd be interested in understanding what terms in such plans' documentation were deemed dodgy and how the "fix" was made. (I know this is really getting under the bonnet!)


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## Black Sheep

For those who retire at age 65, Jobseekers benefit is payable until 66th birthday. It's the stop gap arrangement at present. Who knows what will happen when pension age rises to 67!


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## JoeRoberts

There was a fear that the wording could be interpreted as meaning a deduction of the actual pension payable at age 65 would be claimed i.e. no pension payable at 65 so no deduction. And since pensions once in payment cannot be easily reduced, this " no deduction" would have to continue even after 66 etc.. The funding implications were very significant.

To change the deed, both trustees and employer would generally have to agree.


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## ppmeath

JoeRoberts said:


> *Regarding the loss of pension, your issue is with the government,* not the pensions scheme. The warning time for pension date changes was far too short and was not properly challenged. Think about the opposition to a few hundred euro water charges, but the more significant pension changes got no protest.



The issue lies with the pension scheme, not the Government.

 There is such a profound lack of understanding about this issue.

Please see this explanation from the Pensions Authority:

http://www.pensionsauthority.ie/en/LifeCycle/Private_pensions/Integration_coordination/

*"Private pensions*
*Integration / coordination*

*A significant number of pension schemes make an allowance for the State pension when providing a pension from the scheme. This is known as "integration" in the private sector and "coordination" in the public sector. An integrated scheme looks at the State pension as part of the total pension package promised to employees on retirement. One reason for this is that both employers and employees make PRSI contributions and these, in turn, entitle scheme members to Social Welfare benefits, including State pension."*

If the employee is promised, for example, 2/3rds of his final salary based on years service and on attaining "minimum retirement age" - or - the age at which this pension is payable, then that is what must be delivered.

_"Integration is used as a means of taking into account the benefits payable under the Social Welfare system to calculate:_


_the amount of pension payable from a pension scheme,* so that the combined pension from both sources (State pension and occupational pension) is at the level being aimed for in the scheme's design*; and_
_the level of contributions payable by the employee towards the cost of their occupational pension, so that the contributions payable to an occupational pension scheme reflect the offset from scheme benefits to allow for the State pension."_
 
Any person receiving other advice should immediately lodge a formal complaint to the Pensions Ombudsman.



Black Sheep said:


> For those who retire at age 65, Jobseekers benefit is payable until 66th birthday. It's the stop gap arrangement at present. Who knows what will happen when pension age rises to 67!



Job Seekers benefit is for those seeking work or those who lost their jobs, it is not for those in such pension schemes as outlined above, because these people are "retiring" as in "ceasing to work".


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## JoeRoberts

Your pension is based on the terms of the deed .Pensions authority has no role in interpretation of the deed  . That is for the trustees or the courts if you want to go there  .

As regards job seekers you may be right but in reality it is used to keep this issue under the radar


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## Steven Barrett

Ravima said:


> Quite a few DB schemes deduct 150% of the state pension.
> 
> its only at times like this, one is envious of the Public Sector pensions!



Most public sector pensions also take the state pension into consideration. Only the older ones don't


Steven
www.bluewaterfp.ie


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## ppmeath

JoeRoberts said:


> Your pension is based on the terms of the deed .Pensions authority has no role in interpretation of the deed  . That is for the trustees or the courts if you want to go there  .
> 
> As regards job seekers you may be right but in reality it is used to keep this issue under the radar



Your pension is based on the terms of your pension scheme, if your pension scheme is not delivering the "Defined Benefit" that it promised - then the problem is with the Pension Scheme.

If you claim Job Seekers, with no intention of seeking work - then you are committing welfare fraud. Job seekers is not intended to be a stop gap for the full payment of a defined benefit pension.



SBarrett said:


> Most public sector pensions also take the state pension into consideration. Only the older ones don't



The older ones don't because those workers did not pay a Class A PRSI contribution, so they have no entitlement to any State Pension.

The "newer" ones, (and I have covered this before), do take the rate (note, not payment) of the state pension into consideration, because the member is paying a Class A PRSI stamp.

The issue went unnoticed because both the state pension and the "normal" retirement age was previously 65, when the Government changed that, many people incorrectly assumed that this affected PS workers pension entitlements - it did not, or it should not have.

Both PS workers have the very same defined benefit pension entitlement.

My advice to any person who is being wrongly advised that their pension will be short of the rate of the state pension because of the lack of understanding as to how "integration" works, should immediately lodge a formal complaint in writing to the ombudsman and tell them that your pension scheme is not being administered correctly.

This matter is sitting on Paschal Donoghues desk as we speak.

Those experts who should understand this scheme, sadly do not.


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## Deiseblue

SBarrett said:


> Most public sector pensions also take the state pension into consideration. Only the older ones don't
> 
> 
> Steven
> www.bluewaterfp.ie



Steven , it's my understanding that the older scheme - pre 95 Pensioners have no entitlement to a state pension as they do not pay the appropriate  classs A PRSI contribution.
Schemes such as those in the Bank of Ireland however enable pensioners to not only avail of an occupational pension but to avail of the state pension as well - thankfully !


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## ppmeath

SBarrett said:


> I doubt the scheme rules have provision of making up the OAP if you are unable to receive but you need to have a look at what the scheme rules say. As a deferred member, you are entitled to ask for a copy.



If the scheme is a "defined benefit" scheme, then this is what is relevant. If the scheme promised a "defined benefit" based on years service, salary and has a "minimum retirement age", the age at which the pension is payable, then they have to have a provision.

That is the point of a "defined benefit" pension. You won't know the "amount" of the pension, but you know that it is a % of your final salary.

Here it is again explained in the Pension Authority's handbook:

_"the amount of pension payable from a pension scheme,* so that the combined pension from both sources (State pension and occupational pension) is at the level being aimed for in the scheme's design*;"_

If the design of the scheme is half salary or two thirds, and the amount payable is x amount, then as it clearly states both the occupational and tate pension are combined to make up that pension.

As I said, this wasn't an issue when the state pension age was 65, when it changed to 66 people incorrectly assumed that this changed the pension entitlements of PS workers, for example.

It did not. If your "minimum retirement age" was 65, then that is still your minimum retirement age - or the age at which your full pension entitlement kicks in.


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## ppmeath

Deiseblue said:


> Schemes such as those in the Bank of Ireland however enable pensioners to not only avail of an occupational pension but to avail of the state pension as well - thankfully !



But both pensions combined will equal the "defined benefit" as set out in the pension scheme.

Pre 1995 PS workers who have and entitlement to 40/80ths of their final salary on retirement receive that pension from one source.

Post 1995 PS workers have the very same entitlement - payable from two sources.

It is not only the State pension that is "integrated" into the pension scheme - it is all SW entitlements.

The best example I can use is illness benefit.

When a PS worker joined after 1995 they signed a form entitling the SW to pay any of their entitlements directly to your employer.

If they are out sick then they fill out an MC1 form. They are asked on that form if there is a paid sick leave scheme, they answer yes.

Their SW entitlements are paid directly to their employer - because they have paid sick leave for a specific period of time.

Private sector workers have no entitlement to illness benefit for the first 6 days, neither do PS workers, however, the PS workers are paid their full pay by their employer - because that is the terms of their occupational scheme.

When they come into entitlement after 6 days, the SW pay the relevant department, while the employee receives his full pay.

This is exactly how it should work when the person retires.

Sadly, as I said, those who should understand "integration" do not understand it.


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## ppmeath

These are the rules of the CS superannuation scheme, this is the basis for the majority of PS pensions.
http://www.cspensions.gov.ie/SuperannuationHandbookandGuidanceDec20061.pdf


_"(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*. 
_
*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 pension scheme is designed to take the rate of the state pension into account, not the payment. It was assumed that the PRSI part of the pension would take care of that part of the pension, that is why it is "offset". It is to calculate the "occupational" part of the pension that the members personal pension contribution (PPC). See the examples in that Circular. 

This was fine when the state pension age was 65, although the pension scheme was still administered incorrectly because the relevant department only paid the "occupational" part of the pension, people had to apply directly to the SW for the state pension.

They received their total benefit - in the wrong way.

The problem exposed itself when the age was raised to 66.

"Integration" means exactly that  - the mistake that is being repeated is that it is being "deducted" - not integrated.

_"P18/075/05
20 July 2005
*Circular 19/2005*: Public Service Pension Reform: Revised method of calculation
of pension entitlement for public servants whose pensions are integrated with
social welfare benefits
A Dhuine Uasail,
1. I am directed by the Minister for Finance to announce the introduction of a
revised method of calculation of pension entitlement for public servants whose
pensions are integrated with social welfare (*i.e. where the occupational pension is*_
*integrated with the Old Age Contributory Pension (OACP) to provide a combined
pension)."
*
Here is an example from the Pensions Authority handbook:
*
Integration example
Member's salary €60,000
State pension offset (1.5 times State pension of €12,000) €18,000
Pensionable salary (€60,000 less €18,000) €42,000
Scheme pension (2/3rds of €42,000) €28,000
State pension €12,000
Total pension (€28,000 + €12,000) €40,000 
Assumes a member with salary of €60,000 and an entitlement of 40/60ths
*
As I said, my advice is to lodge a formal complaint, write to Paschal Donoghue.

If your pension scheme is a defined benefit scheme and the benefit you receive is not what the scheme was designed to provide, then your pension scheme is not being administered correctly.

This is not a Government issue, nor is it a Social Welfare issue. It is a Pension Scheme issue.


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## ppmeath

duplicate


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## Deiseblue

ppmeath , no in my case as a BOI pensioner I receive the occupational pension applicable to the years served PLUS the State Pension in due course , if spared - still some years off as I availed of an incentivised early retirement package .

In other words the scheme is not integrated .


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## ppmeath

Deiseblue said:


> ppmeath , no in my case as a BOI pensioner I receive the occupational pension applicable to the years served PLUS the State Pension in due course , if spared - still some years off as I availed of an incentivised early retirement package .
> 
> In other words the scheme is not integrated .



Deise - sorry my duplicate post disappeared! Yes, the BOI DB scheme is not integrated, this issue relates to integrated pensions only.  As far as I understand, your pension promise is two thirds final salary and if eligible, you can apply for the state pension.


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## Steven Barrett

Deiseblue said:


> Schemes such as those in the Bank of Ireland however enable pensioners to not only avail of an occupational pension but to avail of the state pension as well - thankfully !



That being the scheme that is €1.2bn in deficit? Maybe being overly generous is a big part of the reason why it has such a big deficit. Members should be worried that they'll get the basic benefits, never mind the enhanced ones...


Steven
www.bluewaterfp.ie


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## Deiseblue

Always a concern Steven but life is too short which is why I availed of the opportunity to take the maximum cash lump sum which added to the statutory redundancy payment came to quite a tidy sum .

And of course the State pension is a bulwark against absolute poverty if the worst happens


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## SlugBreath

JoeRoberts said:


> The wording on most scheme was poor and to avoid a challenge most were advised to change the trust deed to make it clear that they did not have the liability for the lost state pension.



Thank you for your interesting replies.  I will certainly be asking the administrators of my scheme and the trustees if they made changes to the trust deed.  If they did, would the members of the pension scheme have had a say?

I don't believe that I should have to look to unemployment benefit to top up the one year shortfall in social welfare payments. I believe that my pension scheme should bridge that gap. I am in a DB scheme, promised 40/60 on retirement on full service. Because I joined the scheme late I also made additional payments to bring me up to the 40/60. 

I did leave the scheme early and as a deferred member  I would not have been entitled to the full 40/60 but I would be interested to know if a deferred member is treated differently in any way.  All the calculations for my pension are based on the time I left my employment. If the changes to the trust deed were made after I left my employment am I not protected in any way?


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## SlugBreath

Deiseblue said:


> ppmeath , no in my case as a BOI pensioner I receive the occupational pension applicable to the years served PLUS the State Pension in due course , if spared - still some years off as I availed of an incentivised early retirement package .
> 
> In other words the scheme is not integrated .



Not in my case. I worked for the Bank of Ireland for 15 years and left before 1991. There is "nil" pension for me from them.

The BOI was setting aside a sum of money for my pension. It was a non contributory pension so I got nothing when I left.

I often wonder where this money went to. I guess that it went toward your sojourn in Southern Spain, Deise?


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## ppmeath

SlugBreath said:


> Not in my case. I worked for the Bank of Ireland for 15 years and left before 1991. There is "nil" pension for me from them.



Were you in a DB scheme with them?



SlugBreath said:


> I am in a DB scheme, promised 40/60 on retirement on full service. Because I joined the scheme late I also made additional payments to bring me up to the 40/60.



Correct. This is the entire purpose of a DB scheme. The benefits are defined and this is what you should receive. Make the complaint but do not mention the state pension because the Ombudsman doesn't deal with SW pensions and your issue relates to your DB pension, your entitlements to the benefits as provided in your scheme.


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## Deiseblue

SlugBreath , 31 degree high here in Seville with nary a cloud in the sky but I like to think that I'm enjoying the fruits of both my own hard work , the benefits of being a member of a DB scheme set up by a good Employer ( until their ethics , morality & decision making shifted ) & the undoubted benefits of Union membership rather than benefiting from any monies that may have been appropriated from you in what frankly seem to be dubious circumstances.

Just lucky I guess


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## ppmeath

JoeRoberts said:


> Your pension is based on the terms of the deed .Pensions authority has no role in interpretation of the deed  . That is for the trustees or the courts if you want to go there  .
> 
> As regards job seekers you may be right but in reality it is used to keep this issue under the radar



I meant to add to this - the state pension is 233.30 (to increase in June),  JSB is 188 - it wasn't designed to fill a gap, even if it was - it's not filling the gap because there is still a shortfall.


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## SlugBreath

Yes. I was in a DB plan with the Bank of Ireland.

I asked for a pension from the Bank and I was given two fingers. I contacted a minister who also gave me a standard waffle reply that basically referred me back to the bank.

As a group of similar ex BOI people, we sought legal advice and were told that because it was a non contributory pension and because the terms of our employment were, that we lost the benefits if we resigned, then we were entitled to nothing.

I still believe that there is a large "pot of set aside pension money" (similar to their Dormant Accounts & Petty Balances accounts) belonging to people who left the bank pre 1991 being used for other purposes.


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## SlugBreath

Deiseblue said:


> SlugBreath , 31 degree high here in Seville with nary a cloud in the sky but I like to think that I'm enjoying the fruits of both my own hard work , the benefits of being a member of a DB scheme set up by a good Employer ( until their ethics , morality & decision making shifted ) & the undoubted benefits of Union membership rather than benefiting from any monies that may have been appropriated from you in what frankly seem to be dubious circumstances.
> 
> Just lucky I guess



I should add that the IBOA did not want to get involved either.  Enjoy the sun, sangria & tapas.


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## ppmeath

SlugBreath said:


> As a group of similar ex BOI people, we sought legal advice and were told that because it was a non contributory pension and because the terms of our employment were, that we lost the benefits if we resigned, then we were entitled to nothing.



Funny how they quote the terms of the scheme when it suits them and yet when your other pension scheme promises  two thirds - you are being told that it is minus the rate of the state pension.


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## Steven Barrett

Deiseblue said:


> Always a concern Steven but life is too short which is why I availed of the opportunity to take the maximum cash lump sum which added to the statutory redundancy payment came to quite a tidy sum .
> 
> And of course the State pension is a bulwark against absolute poverty if the worst happens



I wasn't aware you were already enjoying the benefits of the scheme. It's those who are still a decade or two out who I would be concerned for. 

Steven
www.bluewaterfp.ie


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## JoeRoberts

SlugBreath said:


> Thank you for your interesting replies.  I will certainly be asking the administrators of my scheme and the trustees if they made changes to the trust deed.  If they did, would the members of the pension scheme have had a say?



It depends on the wording within your scheme if a change would be needed. Members would not have a say, again depending on the terms of the trust deed, it is usually by agreement of the trustees and the employer. Any change would have been noted in your Trustee Annual Report ( which most members never look for). Ask for a copy of the trust deed and any amendments.



SlugBreath said:


> I don't believe that I should have to look to unemployment benefit to top up the one year shortfall in social welfare payments. I believe that my pension scheme should bridge that gap. I am in a DB scheme, promised 40/60 on retirement on full service. Because I joined the scheme late I also made additional payments to bring me up to the 40/60.


You are still getting 40/60 of your pensionable salary. What you are not getting is the state pension at 65. The Govt decided this. It is outside the schemes control.



SlugBreath said:


> I did leave the scheme early and as a deferred member  I would not have been entitled to the full 40/60 but I would be interested to know if a deferred member is treated differently in any way.  All the calculations for my pension are based on the time I left my employment. If the changes to the trust deed were made after I left my employment am I not protected in any way?


Deferred members and active members are treated the same by the scheme. Everything else being equal, you are still getting the deferred pension payment mentioned in your leaving statement. It has now been revalued up by inflation. The scheme did not give you a guarantee that the state would pay a pension at 65. For all the scheme knows, you may not even have enough entitlement to a full state pension. They don't consider your contributions.
And the state pension now is probably higher than the offset applied when you left. But the scheme does not go back and recalculate your pension based on the now higher state pension. This difference can be a significant gain for members with a long deferment.

So, it is not a perfect mathematical integration, for many reasons.

However, the company ( as opposed to the scheme) may do some deal for active members approaching retirement as they would have more negotiating power then someone who has left. For example, an upcoming retiree may say to the company that I don't want to retire at 65. What does the company do then ? This is a whole other can of worms and the company may do a deal to satisfy them off by giving them the equivalent of the state pension. But this is nothing to do with then pension scheme. It is an IR issue.

Allowing the collection of JS is a bit of an Irish (part) solution but the whole pension age change was a badly thought-out process. I dealt with SW on behalf of members at the time and there was nothing illegal about it. SW even issued a statement that they would not means-test the last 3 mths after the 9 were up. My understanding is this has stopped but it seems from other posters that it continues.

It is a terrible scenario but even worse for the many people who had no private pension.


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## ppmeath

JoeRoberts said:


> You are still getting 40/60 of your pensionable salary. What you are not getting is the state pension at 65. The Govt decided this. It is outside the schemes control.



According to the title of the thread - he will not receive his 40/60ths - because it will be reduced by the rate of the state pension.



JoeRoberts said:


> The scheme did not give you a guarantee that the state would pay a pension at 65.



No, it gave him a guarantee that he would receive 40/60ths of his final pensionable salary.



JoeRoberts said:


> For all the scheme knows, you may not even have enough entitlement to a full state pension. They don't consider your contributions.



If his occupational pension scheme is "integrated" with the state pension then the assumption is that he will qualify for this pension after paying PRSI for years.



JoeRoberts said:


> And the state pension now is probably higher than the offset applied when you left



That isn't how it works. The offset is always adjusted upwards if that pension is increased. 



JoeRoberts said:


> But the scheme does not go back and recalculate your pension based on the now higher state pension.



Of course it doesn't because the scheme promised him 40/60ths of his final pensionable salary.



JoeRoberts said:


> Allowing the collection of JS is a bit of an Irish (part) solution but the whole pension age change was a badly thought-out process.



According to my correspondence from the Pensions Ombudsman regarding this issue:

_"However, this Office takes the view that a retired public servant who is not available for or seeking employment and who claims Jobseekers Benefit* is committing welfare fraud*, because it is a condition of payment of Jobseekers Benefit that the person is available for and genuinely seeking employment. "_

I keep saying this and people posting on this site, who should understand how integrated pensions work - do not understand them at all

The state pension age change did not - let me repeat myself here - it did not change the pension entitlements of those on DB schemes with a minimum retirement age of 65.

It changed the age at which private sector workers with no other pension provisions could claim this pension.

Again  - any person in a defined benefit pension scheme that is integrated with the state pension and allows payment of their pension at 65, should receive that pension - in full - when they attain that age.


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## JoeRoberts

Not sure if you are talking about a public or private scheme . If it's a private scheme as I am talking about then you're talking nonsense and there is no point going any further .


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## Conan

Ppmeath,
Sorry, but you are totally wrong.
What an "integrated" scheme promises is a fraction of Pensionable Salary. And Pensionable Salary is generally defined as "Basic Salary less 150% of the State Pension". That's what the scheme promises. And in the case of SlugBreath that is what he gets. 
The fact that the State changed their rules does not mean that the scheme must change theirs. JoeRoberts is correct in his comments.
And in relation to the Pensions Ombudsmans comments the fact (repeat fact) is that if the claimant is over age 62, the Dept of SP do not expect the claimant to be actively seeking work.
Finally, most civil servants retiring today (class B or D) are not entitled to a State Pension. They are mostly members of a non-integrated scheme. It is private sector employees who are mostly members of "integrated schemes".


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## ppmeath

JoeRoberts said:


> Not sure if you are talking about a public or private scheme . If it's a private scheme as I am talking about then you're talking nonsense and there is no point going any further .



It doesn't matter whether it's public or private, what matters is the terms of the pension scheme. If it is a "defined benefit" scheme and that benefit is x - then that is the benefit that the member is entitled to. I will post the information again from the pension authority:

*"Private pensions*
*Integration / coordination*
*A significant number of pension schemes make an allowance for the State pension when providing a pension from the scheme.* This is known as "integration" in the private sector and "coordination" in the public sector. *An integrated scheme looks at the State pension as part of the total pension package promised to employees on retirement. *One reason for this is that both employers and employees make PRSI contributions and these, in turn, entitle scheme members to Social Welfare benefits, including State pension.

Integration is used as a means of taking into account the benefits payable under the Social Welfare system to calculate:


*the amount of pension payable from a pension scheme*,* so that the combined pension from both sources (State pension and occupational pension) is at the level being aimed for in the scheme's design; and*
the level of contributions payable by the employee towards the cost of their occupational pension, so that the contributions payable to an occupational pension scheme reflect the offset from scheme benefits to allow for the State pension.
Typically this is achieved by using an offset from salary in respect of the State pension and calculating pension benefits and contributions based on this lower 'pensionable salary'."

Which is precisely what I posted, now if you want to say that they are talking nonsense then fire away.


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## ppmeath

Conan said:


> What an "integrated" scheme promises is a fraction of Pensionable Salary.



Yes it does Conan, but the poster stated that his pension has been reduced by the rate of the state pension which means that his 40/60ths is not 40/60ths - for example if he retired on 60k pensionable salary, then his two third entitlement is a pension of 40k.

The poster stated:

_"My pensionable salary on leaving employment is different to the actual salary that I was on because there is an offset made for the state pension."_

This is incorrect. His pensionable salary is his pensionable salary, the offset of the state pension is because he is paying a PRSI contribution and it is assumed that this takes care of that part of his pension.

This is what "integration" is. 



Conan said:


> What an "integrated" scheme promises is a fraction of Pensionable Salary. And Pensionable Salary is generally defined as "Basic Salary less 150% of the State Pension". That's what the scheme promises. And in the case of SlugBreath that is what he gets.



And the poster has said that his pension has been reduced by the rate of the state pension, so he will not receive what his pension scheme promised.

Then he said:

_"I cannot get a state pension until I am 66. My occupational pension will be paid as and from next year when I am 65"_

The rate of the state pension is supposed to be included into the "total pension package".



Conan said:


> The fact that the State changed their rules does not mean that the scheme must change theirs.



Of course it doesn't - and this is where the major problem is, because any PS worker (or Private sector worked on a DB scheme) retiring with an entitlement of 2/3rd of half salary at 65, will see these pensions reduced by the rate of the State pension because of the misunderstanding regarding entitlement to it.



Conan said:


> And in relation to the Pensions Ombudsmans comments the fact (repeat fact) is that if the claimant is over age 62, the Dept of SP do not expect the claimant to be actively seeking work.



But it is supposed to be "integrated" into his occupational pension. It isn't and it is being treated like a completely separate part of his "total" pension package.

This is the posters complaint. If the poster retires on a final pensionable salary of 60k and is entitled to a pension of 40k (for example) then he has been advised that he won't get that, he will get 40k minus 12,139.60, or 27,608.40.

Now if the pension scheme promised 2/3rds of 60k then this isn't what the scheme promised.



Conan said:


> Finally, most civil servants retiring today (class B or D) are not entitled to a State Pension. They are mostly members of a non-integrated scheme. It is private sector employees who are mostly members of "integrated schemes".



And these are not the people I am referring to, because their pensions are not integrated because they receive their full pension entitlements when they retire.

Joe is wrong, but he isn't alone.


----------



## ppmeath

SlugBreath said:


> My occupational pension also takes in to consideration the state pension.
> 
> My pensionable salary on leaving employment is different to the actual salary that I was on because there is an offset made for the state pension.



SlugBreath, your pensionable salary is what it is. The reason for the offset is because your PRSI contributions are going towards the part of your pension that is supposed to be taken care of by the State pension.

The rest of the salary is the "occupational" part.

Integration doesn't start when you retire, it starts when you began in your employment.

The offset identifies the contribution (if any) you made to the pension scheme.

Here it is explained in the Superannuation handbook for Civil Servants:
_
"10.1 Officers appointed prior to 6 April 1995 do not pay explicit employee
contributions in respect of their main scheme benefits. *Officers appointed on or after
that date pay the following contributions*
(a) *1.5% of gross remuneration* (i.e. basic salary plus any pensionable
allowances)
(b) *3.5% of net remuneration (i.e. gross remuneration - as indicated at (a)
above – less twice the annual rate of the maximum Contributory State
Pension (CSP) currently payable by the Department of Social and Family
Affairs to a single person without dependants)."
*_
This is the offset.

When it comes to calculating the final pension and again using the "integrated" method a formula was devised to "offset" the part of the pension that is to be taken care of by the State Pension:

On a 60k pensionable salary with an entitlement to 40/80ths (half pay) 30k this is what the calculation should look like:

Weekly SCP: €233.30
*Annual SCP: €12,131.60*
3.33333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years:  40438.66/200*40 = *€8,087.73*
1/80 of salary above 3.333 SCP for 40 years: (60,000 -  40438.66) / 80 * 40 = *€9,780.67
*
The rate of the State pension is multiplied by 3.333333 to identify the "occupational" part of the pension that is covered by personal pension contributions. Both these figures above are added together and this is the "occupational" part that the employer is responsible for - they total *17,868.40. *

If the pension scheme promised 40/80ths of 60k, then this is clearly not 40/80ths - the difference is *12,131.60.*

You can do that calculation on any salary, here are some examples:

50k:
Weekly SCP: €233.30
*Annual SCP: €12,131.60*
3.333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years:  (40438.66/200*40 = *€8,087.73*
1/80 of salary above 3.333 SCP for 40 years: (50,000 -  40438.66) / 80 * 40 = *€4,780.67*
Total = *12,868.40*
40/80th entitlement 25,000
Shortfall = *12,131.60 *

 45k:
Weekly SCP: €233.30
*Annual SCP: €12,131.60*
3.333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years:  40438.66/200*40 =  €8,087.73
1/80 of salary above 3.333 SCP for 40 years: (45000  40438.66) / 80 * 40 = €2,280.67
Total =* 10,368.40*
40/80th entitlement 22,500
Shortfall = *12,131.60*

70k
Weekly SCP: €233.30
*Annual SCP: €12,131.60*
3.333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years:  40438.66/200*40 = *€8,087.73*
1/80 of salary above 3.333 SCP for 40 years: (70000 -  40438.66) / 80 * 40 = *€14,780.67*
Total = *22,868.40*
40/80th entitlement 35,000
Shortfall = *12,131.60 *

80k
Weekly SCP: €233.30
*Annual SCP: €12,131.60*
3.333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years:  40438.66/200*40 = *€8,087.73*
1/80 of salary above 3.333 SCP for 40 years: (80000 -  40438.66) / 80 * 40 = *€19,780.67*
Total =* 27,868.40*
40/80th entitlement 40,000
Shortfall = *12,131.60 *

When they changed the age of the state pension it exposed a major problem because of the profound lack of understanding into how "integration" is supposed to work. The rate of the state pension is being deducted - not "integrated" leaving people who must retire at 65 with a massive shortfall.


----------



## ppmeath

Please refer to this link and a presentation from Anne Vaughan the Deputy Secretary of the Department of Social Protection:

http://oireachtasdebates.oireachtas.ie/Debates Authoring/DebatesWebPack.nsf/committeetakes/FAJ2006021400003
_

"At the end of 2003 there were approximately 133,000 persons insured at modified rates, including almost 99,000 paying class D contributions. While public sector employees recruited after 1995 are now subject to full class A insurance, modified insurance rates are still an important part of the social insurance system.* The pension entitlements of those recruited after 1995 are integrated with the social welfare pension, a common practice in most defined benefit pension schemes in both the public and private sectors. This means the occupational pension and the social welfare pension are combined to give, for example, a civil servant with 40 years’ service a total pension of 50% of salary plus a lump sum."
*_
Further down:
_*
*
"Ms Vaughan: Like any other occupational pension, it would depend on the level. I understand that up to the mid-1980s, it was a defined benefit arrangement. Under this arrangement, a person is promised 50% of his or her salary. I expect that this would be the typical pension.

It is stated in the note that, since 1995, while new entrants pay full social insurance and receive full pensions, the latter are integrated with their occupational pensions, *so the promise is the same but the make-up of the promise is different. "
*_
The problem was exposed when they changed the state pension age from 65 to 66.

Most PS workers (and private sector workers) retire at 65.

What was happening is that when they retired (Post 1995 I am referring to), the employer was doing the calculation as outlined above and only paying the pensioner their part, the employee then applied separately for the state pension and because 65 was the age, they were able to claim it and when added together it gave them their total pension.

Then when they changed the age the pensioners only received the occupational part and are being told that they are not entitled to the state pension - because they aren't 66.

The issue is one that is going to explode as more and more post 1995 workers retire at 65 (or those who take Ill Health retirement), these people must retire at 65 (this has changed for entrants after 2004 and for those joining now it's 70).


----------



## Conan

Ppmeath,
Having worked as a Pensions Manager for many years, I think I fully understand how integration works. If the poster said "my pensionable salary on leaving employment is different to my actual salary" that is the definition used by the scheme. So for example if the actual salary was €60,000 but pensionable salary was say €42,000 (because the offset was say €18,000- say 150% of €12,000) then the scheme will provide a pension of 2/3rds of €42,000 - €28,000.  Then the member gets the State Pension of (say) €12,000 in addition, giving a total of €40,000. 
The fact that the State will only pay the €12,000 from age 66 does not impact the promise made by the scheme. It's not a case that his pension has been reduced by the State Pension but rather his pensionable salary is defined as actual salary less the offset.
The maths is based on the view that the State are looking after the first €18,000 of salary by paying a pension of €12,000 (2/3rds of €18,000) - numbers rounded for the purpose of this example.
The point is that the posters scheme did not promise 2/3rds of €60,000 (actual salary). It promised 2/3rds of Pensionable Salary and that is what he gets. The State deferring the State Pension age to 66 is a separate issue, not under the control of the scheme.
The quote from the Pensions Authority is simply a general outline of how integration works. It makes no comment about the fact that the State Pension age may differ from the retirement age adopted by the scheme.
Joe is not wrong. It is your interpretation that is missing the point.


----------



## ppmeath

A colleague of mine had to take ill health retirement recently. Here is how they did her pension calculation:

€56,442.54 - €40,578.63 = €15,863.91
€40,578.63/200 = €202.89*18.633424 = *€3,780.59*
€15,863.91/80 = €198.29*18.633424 = *€3,694.99*
€3,780.59 + €3,694.99 = €7,475.58

Her final pensionable salary was €56,442.54 with over 18 years service. €7,475.58 is the occupational part, but they didn't "integrate" the rate of the state pension and her weekly pension is* €143* per week.

She has no SW entitlements because she exhausted them - because she was sick.

She is 55 and has worked and paid PRSI since she was 16 - almost 40 years.

She moved out of the country thinking that her pension would be almost a half pension.

She would have been better of on the dole for all her life.

They are supposed to add the rate to her occupational part to give her a total pension of 18/80ths. She is in talks with a solicitor and she isn't the only one.


----------



## jjm

ppmeath Above example public or private service New here just interested


----------



## ppmeath

Conan said:


> Having worked as a Pensions Manager for many years, I think I fully understand how integration works.



I'm sorry to say this Conan - but you don't understand how it works. 



Conan said:


> If the poster said "my pensionable salary on leaving employment is different to my actual salary" that is the definition used by the scheme.




_"Integration is used as a means of* taking into account the benefits payable* under the Social Welfare system to calculate:
_

_*the amount of pension payable from a pension scheme, so that the combined pension from both sources (State pension and occupational pension) is at the level being aimed for in the scheme's design; *and_
_*the level of contributions payable by the employee towards the cost of their occupational pension, so that the contributions payable to an occupational pension scheme reflect the offset from scheme benefits to allow for the State pension."*_

It is "offset" for contribution and pension calculation purposes - it does not reduce your pensionable salary.



Conan said:


> So for example if the actual salary was €60,000 but pensionable salary was say €42,000 *(because the offset was say €18,000- say 150% of €12,000)* then the scheme will provide a pension of 2/3rds of €42,000 - €28,000. Then *the member gets the State Pension of (say) €12,000 in addition*, giving a total of €40,000.



 Absolutely incorrect:

"(4) (a) “Pensionable Remuneration”, *means the pensionable salary*, pensionable
allowances and emoluments held from time to time, and
(b) “*pensionable remuneration at the final day of service*” means the
aggregate of retiring salary, pensionable allowances and emoluments
at retirement,

Now that is in this legislation (which refers to PS workers):

http://www.irishstatutebook.ie/eli/2014/si/582/made/en/pdf




Conan said:


> The fact that the State will only pay the €12,000 from age 66 does not impact the promise made by the scheme. It's not a case that his pension has been reduced by the State Pension *but rather his pensionable salary is defined as actual salary less the offset*.



Absolutely not. There are others on this site who have contacted me and they have been advised that their pensions will not be (PS) 40/80ths. I myself was advised by a pension advisor that if I retired on a salary of 60k, that while my entitlement is 40/80ths or 30k, I will not receive 30k, I will receive 17,868.40 - the state pension will be deducted because I won't be 67 when I retire.



Conan said:


> The point is that the posters scheme did not promise 2/3rds of €60,000 (actual salary). It promised 2/3rds of Pensionable Salary and that is what he gets.



Yes it did, if his final pensionable salary is 60k. 



Conan said:


> The State deferring the State Pension age to 66 is a separate issue, not under the control of the scheme.



You'd think wouldn't you. But trust me, this is what is happening. 



Conan said:


> The quote from the Pensions Authority is simply a general outline of how integration works. It makes no comment about the fact that the *State Pension age *may differ from the retirement age adopted by the scheme.



It makes no comment about it because the member is bound by the rules of his pension scheme, not the state pension one, because that is supposed to be integrated into his pension, the age at which the member is entitled to his full pension is set in the rules of his pension scheme - not the state one.



Conan said:


> *Pension age may differ from the retirement age adopted by the scheme.*
> Joe is not wrong. It is your interpretation that is missing the point.



If the scheme has a "minimum retirement age" of 65, then that is the age at which the members entitlement to his full pension kicks in - Joe is wrong, as are you.


----------



## ppmeath

jjm2016 said:


> ppmeath Above example public or private service New here just interested



Public Sector.


----------



## jjm

Hi not the same in Private sector, I think this will help other people that are in a position to help,I have nothing more to add,


----------



## ppmeath

ppmeath said:


> Weekly SCP: €233.30
> *Annual SCP: €12,131.60*
> 3.33333 times annual SCP: €40,438.66
> 1/200th of salary below 3.333 SCP for 40 years: 40438.66/200*40 = *€8,087.73*
> 1/80 of salary above 3.333 SCP for 40 years: (60,000 - 40438.66) / 80 * 40 = *€9,780.67*



Conan, this calculation came from the Pensions Ombudsman. My pension entitlement is 40/80ths. My final pensionable salary will be around 60k, I am entitled to a pension of 30k. Those figures referred to above are the occupational part of my pension, the part that I made direct contributions to and I made PRSI Class A contributions as I pointed out.

I have to retire at 60 after 30 years service (final 10 are doubled contribution wise).

I won't be entitled to a state pension until I am 67. That leaves me with 343 per week after 30 years service paying a personal pension contribution (PPC), and paying full rate PRSI for over 40 years.

In the PS it's not only the pension that is supposed to be integrated, it's all my social welfare benefits.

Take illness benefit as the best example.

When I joined I had to sign a form authorising the DSP to pay all my SW benefits to my employer.

If I am out sick for a week, the rules of my occupational scheme entitle me to paid sick leave. As you know there is no entitlement to payment for the first 6 days of absence - I still get my full pay.

If I am out for a second week and come into entitlement, I don't get my weeks pay - minus the illness benefit and then apply separately for illness benefit - it is integrated into my occupational scheme, I get my full pay and my employer gets the illness benefit.
That is exactly how the pension should work.


----------



## ppmeath

Conan said:


> . The State deferring the State Pension age to 66 is a separate issue, not under the control of the scheme.



You would think so Conan - but not according to where I got my pension advice which I outlined above:



The increase in the State Pension age to 67 in 2021 and 68 in 2028 (*this affects anyone who joined the Public Sector after 1995 who is paying ‘A’ PRSI)*"
I joined post 1995, my compulsory retirement age is 60 and according to these guys, the change affected me and they, as well as any other advisor that I spoke to all told me that my pension entitlement will be reduced by the state pension. 

I have already brought this to the attention of DPER (Paschal Donoghue) and I have other people working with me on this. 

I will leave it there with you because I have been down this particular path before, many times.


----------



## ppmeath

jjm2016 said:


> Hi not the same in Private sector, I think this will help other people that are in a position to help,I have nothing more to add,



They  are usually very similar if they are DB schemes, read the terms of your pension scheme. Don't get caught short. The Pensions Ombudsman is fully aware of this issue and has received numerous complaints from people taking IHR or reaching compulsory retirement age who have been left short in their pension entitlements.


----------



## Conan

Ppmeath
Your examples are Public Sector. The Private Sector (such as B of I) operate  "integration" differently by using the Pensionable Salary approach. The example I gave is typical of the private sector and is correct. 
The change of State Retirement age to 66 (and in 2021 to 67) will affect all retirees from integrated schemes- public and private.


----------



## japester

ppmeath said:


> They  are usually very similar if they are DB schemes, read the terms of your pension scheme. Don't get caught short. The Pensions Ombudsman is fully aware of this issue and has received numerous complaints from people taking IHR or reaching compulsory retirement age who have been left short in their pension entitlements.


Hi ppmeath, you might recall that I had a discussion with you some time back about pensions and supplementary pension in particular. Wouldn't a person in your own circumstances who retires at 60 be entitled to a supplementary pension to ensure that 50% of final salary is indeed received as a pension from that age. The pensions ombudsman's website even states this as far as I recall.


----------



## Deiseblue

Conan said:


> Ppmeath
> Your examples are Public Sector. The Private Sector (such as B of I) operate  "integration" differently by using the Pensionable Salary approach. The example I gave is typical of the private sector and is correct.
> The change of State Retirement age to 66 (and in 2021 to 67) will affect all retirees from integrated schemes- public and private.



I'm totally confused , as a BOI pensioner I believe the DB scheme under which I retired included no element of " integration ".
I simply received an occupational pension commensurate with years served & in due course am entitled to the State pension.


----------



## ppmeath

japester said:


> Hi ppmeath, you might recall that I had a discussion with you some time back about pensions and supplementary pension in particular. *Wouldn't a person in your own circumstances who retires at 60 be entitled to a supplementary pension to ensure that 50% of final salary is indeed received as a pension from that age. *The pensions ombudsman's website even states this as far as I recall.



Hi Japster, I have been working on this since that time and let me tell you this - the nonsense I have been fed is astonishing and again, it is down to a profound lack of understanding as to what integration means.

When I retire at 60 I am entitled to a pension as set out here in the rule book:

_"8.5 Members of the Prison Service, who are subject to the 1919 Superannuation Act,
have enhanced superannuation terms, under which actual service in excess of 20
years is doubled for superannuation purposes, subject to a maximum of 40 years’
reckonable service - *thus, for example, a Prison Officer with 30 years' actual service
would secure maximum benefits.*"_

_"11.9 Unlike the officers recruited prior to 6 April 1995 (see paragraph 11.9), officers recruited on or after 6 tApril 1995 are insured for the full range of social insurance benefits payable by the Department of Social and Family Affairs, *including Contributory State Pension* and State Pension (Transition).* 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)."
*_
As my retirement age, as set out in this rule book is 60, then I am entitled to 50% of my pensionable salary - the same as the pre 1995 employee.
The handbook states:

_"7.1 As indicated at paragraph 5.1, an integration method is used in calculating the
pension (but not the lump sum) benefits of officers appointed on or after 6 April 1995.
Integration* takes into account the value of the Contributory State Pension (CSP)* in
calculating the pension payable from the Superannuation Scheme."
_
The scheme takes into account the "value" of the CSP - not the payment of it. 

Pensions for pre 1995 members were calculated this way:

_"11.7 Pension Calculation for staff recruited before 6 April 1995:
The method of calculation of pension for pre-6 April 95 staff (who pay the modified
rate of PRSI) is 1/80th of pensionable remuneration per year of reckonable service,
subject to a maximum of 40 years."
_
For a member on 60k it looks like this:

Final pensionable salary 60,000

60,000/80 = 750 x 40 = 30,000

After integration was introduced the entitlement never changed - as Anne Vaughan explained:

"_It is stated in the note that, since 1995, while new entrants pay full social insurance and *receive full pensions,* the latter are integrated with their occupational pensions, *so the promise is the same but the make-up of the promise is different. "
*_
What I and others have been advised is that our pensions will be calculated using the formula in the rule book and here it is on a retiring salary of 60k with the same 50% entitlement which is 30k, payable to us after 30 years service and on reaching what is our compulsory retirement age.
This is the formula:

_Weekly SCP: €233.30
*Annual SCP: €12,131.60*
3.33333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years: 40438.66/200*40 = *€8,087.73*
1/80 of salary above 3.333 SCP for 40 years: (60,000 - 40438.66) / 80 * 40 = *€9,780.67*
_
17,168.40 is not half of 60k.

If I pay PRSI for over 40 years (which if I work until I am 60, will be the case) and pay my pension contributions for 40 years (30 with the last 10 doubled), then I will be entitled to SW benefits. 

The supplementary pension should only apply if you have a PRSI shortfall:

_"11.10 Supplementary Pension:
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.*"_

If you do not have an entitlement to the rate of the CSP, or if you have an entitlement to the rate of another SW payment, such as JSB then:

_"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"
_
After the SW benefit and the Occupational part of the pension are added and if they do not make 50%, then and only then is the Supplementary pension applicable, it is not supposed to be applicable if you have full entitlement to the rate of the state pension - which it is assumed you will have after paying over 40 years PRSI contributions. 

This applies to all PS staff retiring at 65 and I believe that it also applies to private DB pension schemes. But you see the "experts" maintain that because they increased the state pension age, that this changed the entitlements as set out in "defined benefit" schemes

 According to the DSP:
_
" *Defined benefit schemes*
A defined benefit scheme is one where the benefit entitlement is defined in some way by reference to your *earnings, your length of service*, an index or a fixed amount. So, you know in advance that your pension will be,* for example, half of your final salary if you have 40 years service* or that it will be a certain amount each week. In defined benefit schemes, the contributions may have to be varied from time to time in order to make sure that the fund can meet the level of benefits. Some schemes have provisions for the employer to top up the fund if necessary."

*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.
_
Now, as I previously stated most schemes provide a "minimum retirement age" of 65:

*"Minimum Retirement The earliest age at which pension scheme rules would allow a
Age member to retire with an immediate pension."
*
If the rules of the scheme state that your pension is based on your years service, your final salary an it is payable at 65 - then this is what it is. 

But of course when they increased the state pension age to 66 (which is in no way linked to the occupational scheme which states that your benefits are payable from 65), the error being implemented by both private and public pension schemes was exposed and that error was the mistake that the employer wasn't responsible for providing the DB pension of two thirds or 50%.

They are reducing the pension entitlement by the rate of the state pension - leaving people short in their pensions.



Deiseblue said:


> I'm totally confused , as a BOI pensioner I believe the DB scheme under which I retired included no element of " integration ".
> I simply received an occupational pension commensurate with years served &* in due course am entitled to the State pension*.



Deise are you fully retired?


----------



## Deiseblue

ppmeath , yes I availed of the early retirement package in 2007 but have some years to go before qualifying for the State pension .


----------



## ppmeath

Conan said:


> Ppmeath
> Your examples are Public Sector. The Private Sector (such as B of I) operate  "integration" differently by using the* Pensionable Salary approach. The example I gave is typical of the private sector and is correct.
> The change of State Retirement age to 66 (and in 2021 to 67) will affect all retirees from integrated schemes- public and private.*



Absolutely incorrect:

_"There are two other major cost reducing changes from existing terms. *The first is the increase in pension age to 66 years and its linking with the State pension age which will increase to 67 in 2021 and 68 in 2028. *As new public servants pay full PRSI and their State pension forms part of their final pension entitlement, it is important that the State pension...."

*"One question that may be posed is why not simply apply the scheme to serving public servants also*. Some outside the public service have asked this question. I see a distinction between offering someone a public service position with single scheme membership *and changing the pension terms for someone who took up their public service employment under clearly defined and understood terms and conditions.* A new entrant can decide whether to take the job on the terms offered, a serving person does not have that option. Many of us will know public servants who stayed in the public service because of the pension provision. It may not be unlawful, but it would be unfair and unjust to people who have worked for many decades on the basis of an agreed outcome in pension terms to then expect that we could arbitrarily change this at the end, or near the end, of their career."_

Previously, PS pensions were not linked with the state pension age - that happened when the new pension scheme was introduced, it only affects new members.

It is legislated for here:

http://www.irishstatutebook.ie/eli/2014/si/582/made/en/pdf

_"RULES FOR PRE-EXISTING PUBLIC SERVICE PENSION SCHEME
MEMBERS REGULATIONS 2014"

_
New members joining the Public Sector have a minimum retirement age that is linked to the state pension age, in other words, they can no longer retire at 65. Their retirement age which is the age at which their benefits become payable is now, for the first time, linked to the State pension age.

It did not affect pre-existing members whose minimum retirement age was 65 (or 60).


----------



## ppmeath

Deiseblue said:


> ppmeath , yes I availed of the early retirement package in 2007 but have some years to go before qualifying for the State pension .



Have you worked and paid PRSI Deise? Because if you haven't then you may not be eligible for the state pension because you will have a gap in PRSI contributions if you haven't paid any since 2007.


----------



## Deiseblue

No problem there - I paid PRSI throughout my working life & signed on for credits thereafter.
Both the BOI & the Social Welfare office both confirm that , if spared , I will receive the State pension.


----------



## ppmeath

Have a look at this exchange between Brendan Howlin and Clare Daly last September:

https://www.kildarestreet.com/wrans/?id=2015-09-22a.884

_"To ask the Minister for Public Expenditure and Reform *his plans to allow civil servants who are presently required to retire at 65 years of age but who are not eligible for the State pension*, the option of remaining in employment until they reach the age at which they are eligible for the State pension; and if he will make a statement on the matter. "_

Remember he is the one who introduced the change to the state pension age, he states:

_"The amount of pension to which a civil servant may be entitled and both the compulsory retirement age and minimum pension age provisions to which a civil servant may be subject,* depend on the pension conditions applicable at the date of original recruitment.*"
_
On knowing that he changed the state pension age to 66 and on knowing that the question refers to a Civil Servant who has to retire at 65, he states:
_
"The pensions (and contributions) of the majority of civil servants* who are fully insured* and are in defined benefit pension schemes are, like many occupational pension schemes, integrated (or co-ordinated) with social welfare benefits. *This means the occupational pension is paid on the assumption that the pensioner also receives the State Pension." *
_
How can the Civil Servant with a compulsory retirement age of 65 receive the state pension - when he increased the age to 66? 

And then:

_" In instances when the State Pension is not payable, a supplementary pension may be payable under the relevant public service pension scheme to bring the pension up to the same amount as would be paid to a public servant whose pension is not integrated. "
_
He doesn't understand that the Civil Servant has been refused the state pension because of age - not because of a shortfall in PRSI payments, which is the purpose of the supplementary pension.

When I say that those who should understand integration don't - this is what I mean.


----------



## ppmeath

Deiseblue said:


> No problem there - I paid PRSI throughout my working life & signed on for credits thereafter.
> Both the BOI & the Social Welfare office both confirm that , if spared , I will receive the State pension.



Deise, I  would urge you to check this out again. If you haven't made any PRSI contributions for 10 years then you won't meet the yearly average rule because you have a 10 year gap in payments - your contributions are calculated from the time you entered into insurance until you reach state pension age.

_*"If you retire early, you should ensure that you continue to pay PRSI contributions or get credited contributions (if eligible) to maintain your entitlement to a pension.* If you are getting Jobseeker's Benefit (JB) and are aged between 65 and 66 when your JB would normally end, you may continue to receive it until the age of 66, provided you meet the PRSI requirements."_

*Normal average rule*
_The normal average rule states* that you must have a yearly average of at least 10 appropriate contributions paid or credited from the year you first entered insurance or from 1953,* whichever is later to the end of the tax year *before you reach pension age (66)*. An average of 10 entitles you to a minimum pension; you need an average of 48 to get the maximum pension.

http://www.citizensinformation.ie/e...etired_people/state_pension_contributory.html_

Edit - sorry Deise -I see you are signing for credits, but many people don't do this.


----------



## Deiseblue

Will do & thanks for your help.


----------



## Bronco Lane

Do credits have the same value/standing as paid contributions?

My wife has a number of paid contributions but her contributions are mostly "credits".

Does this matter?


----------



## Protocol

ppmeath said:


> The supplementary pension should only apply if you have a PRSI shortfall:
> 
> _"11.10 Supplementary Pension:
> 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.*"_
> 
> If you do not have an entitlement to the rate of the CSP, or if you have an entitlement to the rate of another SW payment, such as JSB then:
> 
> _"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"
> _
> After the SW benefit and the Occupational part of the pension are added and if they do not make 50%, then and only then is the Supplementary pension applicable, it is not supposed to be applicable if you have full entitlement to the rate of the state pension - which it is assumed you will have after paying over 40 years PRSI contributions.



The aim of the supp pension is to treat post 95 staff who pay full-rate PRSI similar to pre95 staff who pay low-rate PRSI.

If a pre95 worker retires from the PS at, say, 62, before the State Pension age, 66 at the moment, they receive full pension from age 62.

If a post-95 worker retires at age 62, they get the work pension element only.

The supp pension brings their pension up to what they would have got if they had been class D pre95 worker.


----------



## japester

Protocol said:


> The aim of the supp pension is to treat post 95 staff who pay full-rate PRSI similar to pre95 staff who pay low-rate PRSI.
> 
> If a pre95 worker retires from the PS at, say, 62, before the State Pension age, 66 at the moment, they receive full pension from age 62.
> 
> If a post-95 worker retires at age 62, they get the work pension element only.
> 
> The supp pension brings their pension up to what they would have got if they had been class D pre95 worker.


That's what I am hoping Protocol, but ppmeath suggests that it isn't so simple and that perhaps some employers are only going to pay out the "occupational" part of the pension, basically saying "tough luck" on the remaining €12k as they are interpreting the rules in a particular way. I wonder are there other post-95 employees who might have arrived into the Public Sector later in life, now retired, that could give us some useful insight as to what happened in their own particular case, particularly if they retired in advance of 65. This would be very useful indeed for the likes of myself - I won't be retiring for some time yet but I am also post-95 and looking to retire at 60 which is my minimum retirement age. However, if my employer refuses to supply me with a supplementary pension to cover the years from 60-68 then I won't be able to retire at 60 at all.


----------



## ppmeath

Protocol said:


> The aim of the supp pension is to treat post 95 staff who pay full-rate PRSI similar to pre95 staff who pay low-rate PRSI.



No it isn't - I posted and you quoted what the aim of the supplementary pension is for. 



Protocol said:


> If a pre95 worker retires from the PS at, say, 62, before the State Pension age, 66 at the moment, they receive full pension from age 62.
> 
> If a post-95 worker retires at age 62, they get the work pension element only.



Both are entitled to the same benefits.



Protocol said:


> The supp pension brings their pension up to what they would have got if they had been class D pre95 worker.



Please read what I posted and what you quoted again. Thanks. ​


----------



## ppmeath

japester said:


> That's what I am hoping Protocol, but ppmeath suggests that it isn't so simple and that perhaps some employers are only going to pay out the "occupational" part of the pension, basically saying "tough luck" on the remaining €12k as they are interpreting the rules in a particular way. I wonder are there other post-95 employees who might have arrived into the Public Sector later in life, now retired, that could give us some useful insight as to what happened in their own particular case, particularly if they retired in advance of 65. This would be very useful indeed for the likes of myself - I won't be retiring for some time yet but I am also post-95 and looking to retire at 60 which is my minimum retirement age. However, if my employer refuses to supply me with a supplementary pension to cover the years from 60-68 then I won't be able to retire at 60 at all.



Spot on. But when you post the rules of the scheme  and even post legislation - and are ignored - sure what can you do.


----------



## japester

ppmeath said:


> Spot on. But when you post the rules of the scheme  and even post legislation - and are ignored - sure what can you do.


That's a serious concern for sure. You'd think the Pensions Ombudsman would have dealt with/be dealing with several such cases as we type. It is a massive issue for post-95 people who aim to retire early only to find out that the dream may be going up in smoke! I'll be keeping a beady eye on how things progress over the next while, do keep us posted about your own case also and if you hear of any others that are in a similar boat. I wish ye all the very best of luck with your cases, it must be distressing to say the least to see a pension promise being abandoned in such a way.


----------



## ppmeath

japester said:


> That's a serious concern for sure. You'd think the Pensions Ombudsman would have dealt with/be dealing with several such cases as we type. It is a massive issue for post-95 people who aim to retire early only to find out that the dream may be going up in smoke! I'll be keeping a beady eye on how things progress over the next while, do keep us posted about your own case also and if you hear of any others that are in a similar boat. I wish ye all the very best of luck with your cases, it must be distressing to say the least to see a pension promise being abandoned in such a way.



He won't deal with it because he is of the incorrect view that the issue is a social welfare issue. The level of ignorance out there is astonishing. The pension promise hasn't been abandoned, see this by Richard Curran:

http://www.independent.ie/business/...al-value-of-a-public-sector-job-35038381.html

_"None of these risks apply in the public sector. Public servants had to stomach a pension levy in the crash* but the guarantee that underpins the ultimate value of defined benefit pension schemes is always there."*_

You are correct when you say that the employers are walking away and blaming the increase in the state pension age - as if this in some way diminishes their responsibility to provide the promised pension, the state are saying - "but you're not the right age" - it is disgusting and as for "independent" advice - don't make me laugh - sure why would the pension firms rock the boat - they have a very lucrative operation selling financial products to people like us - the bridge a gap that doesn't exist, I mean after paying PRSI for 40 years, after paying 5% of your salary for 40 years and your employer paying a PRSI contribution too - why not pay more eh?


----------



## Early Riser

Protocol said:


> The aim of the supp pension is to treat post 95 staff who pay full-rate PRSI similar to pre95 staff who pay low-rate PRSI.
> 
> If a pre95 worker retires from the PS at, say, 62, before the State Pension age, 66 at the moment, they receive full pension from age 62.
> 
> If a post-95 worker retires at age 62, they get the work pension element only.
> 
> The supp pension brings their pension up to what they would have got if they had been class D pre95 worker.



Hi Protocol

This is correct in the PS. 
To take a hypothetical example of "Jack" who has a retirement age of 60, who wishes to retire at that age and who has 40 years of reckonable service and a final reckonable salary of €60000. If Jack is a Class D employee he should be entitled to an occupational pension of €30000. If Jack is a Class A employee his occupational pension is approx €17870. Jack can then apply to his employer for a Supplementary Pension to make up the difference. He is entitled to receive this provided he meets he conditions :



Not be employed in any gainful capacity
Not be in receipt of any social welfare payment, or, be in receipt of a reduced benefit only.
You will be required to produce evidence from the Department of Social Protection either that you are not entitled to any payment or only entitled to payment at reduced rates of any social welfare benefit
Establish that you are not entitled to disability/disablement benefit/invalidity pension, if retiring on the grounds of ill health
Establish that you are not entitled to job seekers benefit (previously unemployment benefit). 
The Supplementary Pension ceases when Jack reaches State pension age. Note that the supplementary pension is not paid automatically (it must be applied for post-retirement) and is not included in the Occupational Pension estimate.
Yes, I understand some employers may occasionally have been less than forthcoming in providing the supplementary pension, perhaps due to lack of familiarity with it (?). See this Guidance Note form the INMO :  https://www.inmo.ie/Home/Index/7059/8610

Just to note that not all Class A public servants are post 1995. There are two other similar public service schemes form much earlier : Nominated Health Agencies Superannuation Scheme (NHASS) and Voluntary Hospitals Superannuated Scheme (VHSS). These are noted in the INMO document referenced.


----------



## Protocol

EarlyRiser,

you say I'm correct, yet ppmeath says I'm wrong.

This is a confusing issue.

I personally might hope to claim a supp pension, so I am curious.


----------



## ppmeath

Protocol said:


> EarlyRiser,
> 
> you say I'm correct, yet ppmeath says I'm wrong.
> 
> This is a confusing issue.
> 
> I personally might hope to claim a supp pension, so I am curious.



You are being given false and misleading information by people who do not know what they are talking about. I am asking you to read the two documents below carefully. 

It is the original agreement from 1995 and the Circular that was issued  - please don't read some guy's "interpretation" of something that he knows nothing about.

http://circulars.gov.ie/pdf/circular/finance/1995/06.pdf
http://circulars.gov.ie/pdf/general-council/finance/1995/1281.pdf
_
_
This is your starting point:

_"21. *The superannuation terms applicable to established staff appointed on or
after 6 April 1995 will*, apart from the amendments arising as a result of the
change in PRSI status and outlined above,* be the same as the existing terms
for established officers."
*_
Anyone that tells you that you are not entitled to the same pension as a pre 1995 is wrong. 

Those documents provide the correct information regarding your pension entitlements - do not pay any heed to people who tell you otherwise. If you need any further clarification, I am happy to answer any of your queries.


----------



## ppmeath

http://oireachtasdebates.oireachtas.ie/Debates Authoring/DebatesWebPack.nsf/takes/dail2007030100083

_"Minister for Finance (Mr. Cowen): 

 

 Civil Servants appointed prior to April 1995 pay a modified rate of Pay Related Social Insurance (PRSI) and are not eligible for most Social Welfare benefits, including the Old Age Contributory Pension (OACP).* Their personal pension entitlements are met entirely from the Civil Service (occupational) Pension Scheme.*

All staff (with minor exceptions) appointed or reappointed as established civil servants on or after 6th April 1995 are full Class A PRSI contributors. As such they are entitled to the full range of Social Welfare benefits.* Their civil service retirement benefits are integrated with the OACP.*

The introduction of “integrated pensions” in 1995 was designed in such a way as to ensure that the *combination of personal Social Welfare and civil service pension benefits *was at least as favourable* as the civil service benefits payable to pre 1995 appointees.*

Any officer who received a marriage gratuity as a result of the “marriage bar” and who was subsequently re-appointed as an established civil servant is entitled to have all of the earlier service reckoned for civil service pension purposes subject to repayment of the gratuity with appropriate compound interest.

A person whose reappointment was prior to 1995 would, on retirement, receive a civil service pension and lump-sum calculated by reference to salary and length of service.

*In the case of persons reappointed after 1 April 1995 the civil service retirement lump sum would be calculated on the same basis as above. Civil [1671]service pension would be calculated by reference to length of service but by reference to “integrated salary”* i.e. salary less twice the personal rate of OACP. However, when aggregated with OACP entitlements,* the total pension payable *would be at least equal to, and in many *cases greater than, the pension payable to a comparable pre 1995 appointee."

http://oireachtasdebates.oireachtas.ie/Debates Authoring/DebatesWebPack.nsf/committeetakes/FAJ2006021400003
*
"Chairman:



I welcome the delegation from the Department of Social and Family Affairs: Ms Anne Vaughan, principal officer in the pensions division......"

"While public sector employees recruited after 1995 are now subject to full class A insurance, modified insurance rates are still an important part of the social insurance system. *The pension entitlements of those recruited after 1995 are integrated with the social welfare pension*, a common practice in most defined benefit pension schemes in both the public and private sectors. *This means the occupational pension and the social welfare pension are combined to give*, for example, a civil servant with 40 years’ service *a total pension of 50% of salary plus a lump sum....."*


"Ms Vaughan: Like any other occupational pension, it would depend on the level. I understand that up to the mid-1980s, it was a defined benefit arrangement. *Under this arrangement, a person is promised 50% of his or her salary.* I expect that this would be the typical pension.

*It is stated in the note that, since 1995, while new entrants pay full social insurance and receive full pensions, the latter are integrated with their occupational pensions, so the promise is the same but the make-up of the promise is different"

*
Ms Vaughan depending on the detail, there would still be a cost to the Exchequer. *When we refer to integrated pensions, we are talking about defined benefits. As a civil servant, the promise is that my pension will constitute 50% of my pensionable salary. If that were integrated, the promise would be that I would get a pension worth 50% of my salary, but made up of the social welfare and occupational pension. *While one might argue that from my point of view it is all State money, things are different in a private sector arrangement. I accept that there are issues of co-ordination to consider."

_


----------



## ppmeath

Everything was fine when the state pension age was 65 because most PS workers retire at that age.

Nobody who joined post 1995 has completed 30 or 40 years on the integrated scheme - because 1995 was 21 years ago.

There have been people badly affected by the misinformation relating to their entitlements, those who reached compulsory retirement age with very little service and those who had to avail of Ill Health Retirement, like my colleague who, because of the misinformation, has to exist on a pension of 143 per week after retiring on a salary of 56,000 and working 18 years in the CS - because of the failure of those who should understand "integration" - who do not.

The issue will explode when the first tranche of those who are due to retire in 2025 are provided with a pension well short of their entitlements.

The pension entitlements of Public Sector workers were never, ever, linked to the State pension age.

That only happened with the introduction of the new scheme introduced by Brendan Howlin in 2013. I had to alert a very senior person in the Civil Service that new entrants joining since then - will not be able to retire at 65 - their "minimum" retirement ages are now linked to the state pension providing one pension - hence the name.

Prior to that PS pensions were "integrated" (not linked) with SW entitlements.

Prior to 1995 employees have no entitlement to SW benefits, because they didn't make any contributions and as the then finance Minister Brian Cowen confirms:

_*"Their personal pension entitlements are met entirely from the Civil Service (occupational) Pension Scheme."*_


Sadly as is the way in this country - it's going to take a High Court case to resolve, when all the information and legislation is there - it is just being interpreted incrrectly by those who do not understand the issue.


----------



## ppmeath

By the way - the pension modeller is wrong.

When I enter my details it tells me:


"If you retire at age 60 you would receive a once off tax-free retirement gratuity of €73,196, less the deduction of any outstanding contributions. You *would also receive a pension of €14,498*. Your pension would be paid in arrears on a fortnightly basis.  Based on your Class A Social Welfare status, you may also be entitled to a Social Welfare contributory Old Age Pension from age 66, currently* €12,173.59* per annum.  If through no fault of your own you fail to qualify for a Social Welfare benefit, you may be entitled to a supplementary pension. "


There is no such pension as the OAP, it is now called the state contributory pension, furthermore - they have the rate incorrect:

It is now 233.30 per week or 12,131.60 - not 12,173,59.

My Social Welfare "benefits" are supposed to be "integrated" into my pension entitlements which are 50% of my final pensionable salary.

They have DEDUCTED this benefit - not "integrated" it - it also falsely tells me that this benefit - which is supposed to be "integrated" into my pension is not payable to me until I am 66.

After working for 30 years paying 40 years direct personal pension contributions (we double up for the final 10 years service), and because I have been working and paying a Class A stamp since I was 16 - 44 years of PRSI - I am "entitled" to a pension of *€278* per week. If I don't work a day in my life I get 188 until I retire and then I get a few quid less then the non contributory state pension - and yet the "experts" can't see this? 

This applies to every single PS employee who joined after 1995.

Let's take a normal Civil Servant who joined in 1995 but post 1995, so 21 years service.

Date of Birth 9/2/1975 * Projected retirement date at age 65 09/02/2040* 
Pensionable Service to date 21 years
*Service from today to retirement *23 Years and 97 Days Projected future working pattern 100% (Full Time)  

On a retiring salary of 45k and a compulsory retirement age of 65 -  it tells me:

_*"Your Benefits on retiring at age 65 *(Based on current salary and Social Welfare rate) 
If you retire at age 65 you would receive a once off tax-free retirement gratuity of *€67,500*, less the deduction of any outstanding contributions.   You would also receive a pension of *€10,326*. Your pension would be paid in arrears on a fortnightly basis.  

Based on your Class A Social Welfare status, you may also be entitled to a Social Welfare contributory *Old Age Pension from age 66,* currently *€12,173.59* per annum.  If through no fault of your own you fail to qualify for a Social Welfare benefit, you may be entitled to a supplementary pension. "_

The state pension age will increase to 67 years in 2021 and to 68 years in 2028, the retirement year of the example above is 2040, yet this is saying that the age is still 66.

Furthermore, after this person has worked in the CS from 1995 - 2040, 45 years, paid a personal pension contribution for 45 years and full PRSI  for 45 years,  their "pension" is 10,326 - 198 a week, a few quid more then the dole.

My god. How people cannot see the major, major screw up here is beyond me. 

According to the "experts" every one of these employees will have to sign on the dole because they will all have the same massive shortfall.

After exhausting the SW entitlements they are then to apply for a supplementary pension - which means that they can't work if they wish and all because some idiot has misinterpreted the rules of the pension scheme, they have ignored all the relevant circulars, documents and legislation - because hey, they know better eh.


----------



## moneybox

Deiseblue said:


> No problem there - I paid PRSI throughout my working life & signed on for credits thereafter.
> Both the BOI & the Social Welfare office both confirm that , if spared , I will receive the State pension.



You appear to have been signing for credits since 2007?  Don't you have to be actively seeking employment while doing  or are you paying for voluntary contributions?


----------



## SlugBreath

Would it not be possible to split this thread in to two threads. Public service pensions and private pensions and how they are dealt with?

I started the thread as a DB private pension person but it has me totally confused now.


----------



## ppmeath

SlugBreath said:


> Would it not be possible to split this thread in to two threads. Public service pensions and private pensions and how they are dealt with?
> 
> I started the thread as a DB private pension person but it has me totally confused now.



It's already been done, but for the record, it is my belief that the same principle applies to private DB schemes.

When the state pension was increased the pension promise in both private and public DB schemes remained the very same, the employer is on the hook to fill the gap until you reach state pension age, both he and the state are refusing to acknowledge this - employees are caught in the middle and they are suffering despite the fact that the terms of their schemes never changed.

When you joined the scheme your employer made a promise to pay you a % of your salary when you retired at a specific age - that promise still exists, your employer wants to blame the state for changing the state pension age - but this should not have affected scheme members - the employer has to suck it up, but he doesn't want to.


----------



## ppmeath

http://www.pensionsauthority.ie/en/LifeCycle/Private_pensions/Final_salary_defined_benefit_schemes/

_"Final salary defined benefit (DB) schemes are occupational pension schemes that provide a set level of pension at retirement, the amount of which normally depends on your service and your earnings at retirement or in the years immediately preceding retirement.
_
*Example*
_A final salary DB scheme might provide at retirement a pension of 1/60th of final earnings for each year an employee was in the scheme. If an employee retires after 40 years, *that employee would receive a pension of 40/60ths (2/3rds) of their final earnings before retirement."
*_
If that was the promise when you joined, then that is the promise now.


----------



## ppmeath

I posted this and it is from the Department of Social Protection:


_" *Defined benefit schemes*
A defined benefit scheme is one where the benefit entitlement is defined in some way by reference to your *earnings, your length of service*, an index or a fixed amount. So, you know in advance that your pension will be,* for example, half of your final salary if you have 40 years service* or that it will be a certain amount each week. In defined benefit schemes, the contributions may have to be varied from time to time in order to make sure that the fund can meet the level of benefits. Some schemes have provisions for the employer to top up the fund if necessary."

*Occupational pensions and social welfare pensions*
Occupational and personal pensions* operate independently of the social welfare pension system *(Social welfare pensions include contributoryand 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."_

Your pension scheme has NOTHING to do with the social welfare pension scheme they operate completely independent of each other. The scheme takes into account the "level" of benefit, not the payment of it. Because they would have been in a position where they had to provide 2/3rds of your salary and then, if it wasn't integrated you could claim the State pension on top of that. Integration has been very good to DB private scheme let me tell you. 

Your scheme promised you a pension based on your salary, years service and on attaining "minimum" retirement age - they "took into account" your PRSI contributions to the State pension. That the age changed has nothing to do with your pension promise - your employer has to pay you what he said, and when you come into entitlement for the state pension then he can reduce his payment.


----------



## Early Riser

Protocol said:


> EarlyRiser,
> 
> you say I'm correct, yet ppmeath says I'm wrong.
> 
> This is a confusing issue.
> 
> I personally might hope to claim a supp pension, so I am curious.


.

  Hello Protocol, 

This depends on your individual circumstances and scheme membership. I take it that you are in a Class A Public Service scheme with a retirement age of 60 (pre 2004 scheme, as some of the conditions changed then). If so and you meet the other conditions you should be eligible on application. I don't know what sector you are in but the conditions are essentially the same. I suggest you read through the following guidelines from various sectors and see if the conditions apply to you :

https://www.education.ie/en/Educati...ns/Supplementary-Pension-Explanatory-Note.pdf

http://www.nasra.ie/index.php?optio...atid=64:pensions--personal-finance&Itemid=254

https://www.pna.ie/index.php?option...sion-circular&catid=51:latest-news&Itemid=110

https://www.inmo.ie/Home/Index/7059/8610

Of course, when you are due to retire may be a factor - in that there are many queries about the sustainability of public sector pensions in the long run. I gather from other contributors on this thread that the principle of supplementary pensions does not generally apply in the private sector, so it is a considerable perk.

Just to note - some of the above documents refer to the OAP which is now called the State Pension and to eligibility for a state transition pension at 65 (now abolished). Just ignore these - the conditions for eligibility for the supplementary have not changed and it is to bridge the gap to State Pension, at whatever age it kicks in at. One further thing - if you retire early you should strongly consider signing for PRSI credits.


----------



## ppmeath

Protocol said:


> EarlyRiser,
> 
> you say I'm correct, yet ppmeath says I'm wrong.
> 
> This is a confusing issue.
> 
> I personally might hope to claim a supp pension, so I am curious.




The supplementary pension is only payable where you have no entitlement to a SW payment, or where you only qualify for a reduced level.
http://www.nasra.ie/index.php?optio...atid=64:pensions--personal-finance&Itemid=254
_
"Payment of a supplementary pension can arise where the person has retired from a Public Service position and was paying full PRSI i.e. be a Class A PRSI contributor and is only eligible for what is known as a co-ordinated pension, retires before reaching 65 years of age* and who has no entitlement to any social welfare benefit *or *qualifies for a reduced level of benefit only."*_

The same document clearly states:

_"Circumstances in which supplementary pension can be paid. 
*The Problem arises for the Class A PRSI contributor if they retire earlier than age 65 with no entitlement to any social welfare benefit* which would make them substantially worse off than their Class D counterpart. An equal principle also applies that while they should be no better off neither should they be any worse off and this is provided for in legislation. Payment of a Supplementary Pension to rectify any anomaly is provided for under several sections of The Local Government (Superannuation,) (Consolidation) Scheme 1998 "_

It does not say that the problem arises because you are not 65. The same document also states:

_*"In essence to qualify you must:*_

_"Not be employed in any gainful capacity_
_Not be in receipt of any social welfare payment, or, be in receipt of a reduced benefit only._
*You will be required to produce evidence from the Department of Social Protection either that you are not entitled to any payment or only entitled to payment at reduced rates of any social welfare benefit*
*Establish that you are not entitled to disability/disablement benefit/invalidity pension, if retiring on the grounds of ill health*
*Establish that you are not entitled to job seekers benefit (previously unemployment benefit).*

You now work and you pay Class A PRSI contributions, when you retire you *WILL* be entitled to some form of SW benefit, "in essence to qualify you MUST" not be entitled to ANY payment or a REDUCED payment.

The supplementary pension is not to bridge any gap - that is not true, please refer to this* LEGISLATION*:

http://www.irishstatutebook.ie/eli/2014/si/582/made/en/pdf

_"19. Supplementary Pension
(1) This Article refers to a member *who is fully insured *as a member of this
Scheme, is in receipt of a pension or preserved pension and has attained the
minimum pension age or who is in receipt of a pension awarded under Article
18.
(2) Where a member to whom Paragraph (1) applies—
(a) for reasons outside of his or her control, fails to qualify for a Social
Welfare Benefit or qualifies for a Social Welfare benefit at a reduced
rate, and
(b) is unemployed

then, so long as the relevant body is satisfied that the pre-conditions set out in
this Article are met, the former member may, at the discretion of the relevant
body, be paid a supplementary pension."_


_"(3) *The amount of supplementary pension payable shall be the amount,* if
any, arrived at by the formula:
A — (B + C) where
[582] 21

"A is the amount of pension or preserved pension which would have been
payable to the former member if he or she had not been fully insured;"

B is the amount of pension actually payable to the former member, and

*C is the amount of personal Social Welfare Benefit payable to the former
member."*

_
When you retire and are fully insured but when both the occupational and SW benefit still leave you short of your 50% entitlement, then the supplementary pension is calculated and that is the amount that is paid.

This LEGISLATION says absolutely NOTHING about being 65, 66 or 67 - as a matter of fact, it states the opposite - do not listen to people who do not know what they are talking about.

The documents are there, the original agreement, the relevant circulars and the LEGISLATION all provide that you are entitled to your 50% of your final salary on retirement. It isn't confusing - where it gets confusing is when people who do not know and understand the pension scheme, interfere and ignore the facts, putting their own false interpretation on it.

As I said, this is now on Paschal Donoghues desk and he is looking at it.


----------



## jjm

I do voluntary work in my spare time ,I remember one of my colleagues telling me she was returning to work once she reached pension age ,She joined the PS around 1998 under the full prsi a stamp,she left when she was 64/65 and was doing voluntary work, Her PS  pension was small ,From what I remember she was getting the state pension early provided she did not take up paid employment until she reached pension age


----------



## Protocol

I started in PS post 95, but pre 2004.

If I retire at 62, I will not be entitled to any SW benefit.

I should receive my work pension + a supp pension until age 67.

The supp pension will be the difference between what a class A and a class D worker would get with my service.


----------



## ppmeath

Protocol said:


> I started in PS post 95, but pre 2004.
> 
> If I retire at 62, I will not be entitled to any SW benefit.
> 
> I should receive my work pension + a supp pension until age 67.
> 
> The supp pension will be the difference between what a class A and a class D worker would get with my service.




You are entitled to 50% of your final salary to a max of 40/80ths on the day you retire.

Your SW entitlements are "integrated" into your pension.

The State pension age is not applicable to you because you are not in that pension scheme.

You are in a pension scheme that promised you a specific pension when you retired - don't get sucked into the misinformation out there. Read my posts and here is some light reading for you.


*http://circulars.gov.ie/pdf/general-council/finance/1995/1281.pdf*

http://circulars.gov.ie/pdf/circular/finance/1995/06.pdf

http://www.per.gov.ie/wp-content/uploads/Pension-Reform-Revised-method-of-calculation.pdf

http://www.cspensions.gov.ie/SuperannuationHandbookandGuidanceDec20061.pdf

http://www.irishstatutebook.ie/eli/2006/act/5/section/4/enacted/en/html#sec4

http://www.irishstatutebook.ie/eli/2014/si/582/made/en/pdf


By the way these are the relevant documents, the rules of your pension scheme, legislation.


----------



## ppmeath

jjm2016 said:


> I do voluntary work in my spare time ,I remember one of my colleagues telling me she was returning to work once she reached pension age ,She joined the PS around 1998 under the full prsi a stamp,*she left when she was 64/65 *and was doing voluntary work*, Her PS  pension was small* ,From what I remember she was getting the state pension early provided she did not take up paid employment until she reached pension age



 If she left at 65 then she should have claimed the State pension - both added together would have amounted to her total pension - of course it's supposed to be paid from her employer and the state pension paid directly to the employer - but that's another story.


----------



## jjm

thinking back I suspect Protocol Is correct provided she did not take up paid employment,In which case she did not get full state pension until she was 66, only enough to make up the difference for years worked ,Thinking back she did say she was only getting part of the state pension ,She worked in the private sector for as long as i can remember before PS


----------



## ppmeath

jjm2016 said:


> thinking back I suspect Protocol Is correct provided she did not take up paid employment,In which case she did not get full state pension until she was 66, only enough to make up the difference ,Thinking back she did say she was only getting part of the state pension ,



It sounds like she got the supplementary pension and again, when added to the occupational part - this would have provided the full benefit she was entitled to on the day she retired.

But this is where the problem is, there is a misconception that PS pensions are "linked" to the state pension up until 2013 they were not.

Those charged with calculating and paying these pensions are doing it wrong, because they don't understand "integration". It's only happened to a small number of people, but when the state pension age was 65 - it was the same as the retirement age for most Civil Servants so the problem went unnoticed.

Those people received "small" occupational pensions and then applied separately for the state pension - they're not supposed to have to do this, because these pensions are supposed to be "integrated" - they're not separate entitlements because when you joined you would have signed a form authorising payment of ALL your SW benefits to your department.
I have posted a lot of information, I haven't cherry picked parts and misrepresented them - it's all there, the rules and the legislation.


----------



## Early Riser

Protocol said:


> I started in PS post 95, but pre 2004.
> 
> If I retire at 62, I will not be entitled to any SW benefit.
> 
> I should receive my work pension + a supp pension until age 67.
> 
> The supp pension will be the difference between what a class A and a class D worker would get with my service.



 Correct - provided you meet the other conditions - no paid employment nor self-employment involving a PRSI payment. You must have a retirement age of 60. You employer may expect you to claim Unemployment Benefit for the first 9 months - I have heard this reported but can't verify.


----------



## Laramie

ppmeath said:


> *Example*
> _A final salary DB scheme might provide at retirement a pension of 1/60th of final earnings for each year an employee was in the scheme. If an employee retires after 40 years, *that employee would receive a pension of 40/60ths (2/3rds) of their final earnings before retirement."*_



I dug out the pension booklet given to me in 1983. They only refer to my "pensionable salary" they never refer to my final salary in it. Deductions were made from my salary at the rate of 5% of my "pensionable" salary.

It appears to me that my employers are only responsible for the "pensionable" element of my salary when I retire.


----------



## ppmeath

Go to the superannuation handbook, chapter 11 is retirement benefits:

_11. RETIREMENT BENEFITS Return 
11.1 *Benefits: An officer who retires
(a) having reached the minimum pension age*; or
(b) due to incapacity to discharge his/her duties on grounds of mental or
physical infirmity not brought about by the officer’s negligence and likely
to be permanent (and having completed 5 years actual service); or
(c) due to the abolition of his/her office or the reorganisation of his/her
Department/Office in order to achieve efficiency or economy (such cases
must be referred to the Department of Finance), may be paid an immediate retirement pension and lump sum. T*hese immediate*_
*benefits are only awarded in the circumstances outlined above.
*
11.2 is retirement conditions:

11.2 Retirement conditions:
_The ages at which an officer may retire are shown on the following table:
Category* Minimum Pension Age* Maximum Retirement
Age
‘New Entrant’2 Prisons 55 60
‘New Entrant’ other 65 None
Prisons (other than ‘New
Entrants’)
55 (50 with 30 yrs service
in Prison Service)
60
Other Officers 60 65"
_
If you're minimum retirement age is 60, then that is when you are entitled to your FULL pension, not part of it and then another part in 6 or 7 years time. 

The pension is calculated as follows, and this is in the legislation I posted earlier:

_*"11.7 Pension Calculation for staff recruited before 6 April 1995:
The method of calculation of pension for pre-6 April 95 staff (who pay the modified
rate of PRSI) is 1/80th of pensionable remuneration per year of reckonable service,
subject to a maximum of 40 years.
*_
This was the calculation for non integrated members, the entitlement for integrated members is exactly the same, it is just calculated differently:
_
11.8 Pension Calculation for staff recruited after 5 April 1995:
The method of calculating Main Scheme pension for officers recruited on or after 6
April 1995 who qualify for benefits on or after 1 January 2004 is:
(a) For that part of the officer’s pensionable remuneration which is less than or
equal to 31/3 times* the current rate of CSP*, 1/200th of pensionable
remuneration multiplied by the number of years of reckonable service
plus
(b) For any part of the officer’s Pensionable Remuneration which exceeds 31/3
times CSP, 1/80th of pensionable remuneration multiplied by the number of
years of reckonable service
A multiplier of 3.333333 (i.e. 6 decimal places) is used to calculate 31/3 times CSP.
The maximum number of years of reckonable service is 40.
*The CSP rate is the maximum Contributory State Pension payable by the Department
of Social and Family Affairs to a single person without dependants on the last day of
the officer's pensionable service*."_

It is the rate of the State pension that is taken into account - not the payment of it. 

11.9:

_11.9 Unlike the officers recruited prior to 6 April 1995 (see paragraph 11.9), officers
recruited on or after 6tApril 1995 are insured for the full range of social insurance
benefits payable by the Department of Social and Family Affairs, including
Contributory State Pension and State Pension (Transition). 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).
*
When both the SW pension and the civil service pension are added - then they have to come to the same award that the pre 1995 member received, only after adding them and if there is a PRSI issue - can you then apply for the supplementary pension:

_"11.10 Supplementary Pension:
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
*_
It is a blatant misrepresentation to allege that this pension is to bridge a gap from your minimum retirement age to the state pension age, when the RULES clearly state that it is to deal with your PRSI record.

_"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."
*_
Your pension is calculated on the assumption that you are fully insured and entitled to the max SW benefit. 

If you are not entitled to any SW payment or a reduced payment:

_"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. (That should read 11.7).
_
The pre 1995 pension was calculated like this:
_
"11.7 Pension Calculation for staff recruited before 6 April 1995:
The method of calculation of pension for pre-6 April 95 staff (who pay the modified
rate of PRSI) is 1/80th of pensionable remuneration per year of reckonable service,
subject to a maximum of 40 years."

_
When your SW benefit and your civil service pension are added together they should be the same as if it was calculated the same way as the pre 1995 pension. If they are not and it is a PRSI shortfall then the supplementary pension deals with that. These are the facts.


----------



## ppmeath

Laramie said:


> I dug out the pension booklet given to me in 1983. They only refer to my "pensionable salary" they never refer to my final salary in it. Deductions were made from my salary at the rate of 5% of my "pensionable" salary.
> 
> It appears to me that my employers are only responsible for the "pensionable" element of my salary when I retire.



Did you pay a Class A PRSI stamp? Is your pension integrated with the SW system?


----------



## jjm

The only thing I have to add is In the private sector Pension or no pension  changing  the state pension is causing problems,Take my own company old contract says nothing about retirement age, in came the union new contract stating retirement age of 65 ,It is not an issue where I work a new manager could change that ruling,


----------



## ppmeath

Protocol, you are being given false information. This is from the original agreement, it is repeated in legislation and in the rules of your scheme. You are being told that the supplementary pension is to bridge a gap from 62 - 66 when all the documents provided state otherwise, there is no link between your minimum retirement age and the state pension age - I provided the relevant link for that too.

You are then being told that you might have to claim a SW benefit (Job Seekers Benefit is a SW payment) - yet the official documentation states:

_"The supplementary pension* will be equal to the difference between* (i) *the
occupational pension which would have been payable had it not been
coordinated *and (ii)* the aggregate of the actual occupational pension payable
and actual rate of social insurance benefit."
*_
If you have an entitlement to Job seekers, then that is an actual social insurance benefit.

When this is added to the actual occupational pension payable, and if  - when both are added - it does not amount to the same 50% of your salary as your pre 1995 counterpart then the supplementary pension is "equal to the difference" of the pre 1995 pension and the combined total of your occupational and social insurance benefit.

What you are being told is that your entitlement to the rate of the state pension, which is supposed to be integrated into you entitlement - is being deducted.


----------



## ppmeath

jjm2016 said:


> The only thing I have to add is In the private sector Pension or no pension  changing  the state pension is causing problems,Take my own company old contract says nothing about retirement age, in came the union new contract stating retirement age of 65 ,It is not an issue where I work a new manager could change that ruling,



Spot on Jim. The change exposed a problem that existed, but it didn't go unnoticed because a lot of people in both the private and public sector have made numerous complaints about the "integration" pension.

They have complained that their occupational pensions are tiny, before the change in the age, they applied separately for their state pensions.

They believed that they would received half their final salary and the state pension on top of that.

You have to remember that most people retire on very modest salaries. Take someone retiring on 45k after 40 years for example (this formula is for the PS, it may be the same or similar for a private DB scheme):


45k:
Weekly SCP: €233.30
*Annual SCP: €12,131.60*
3.333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years: 40438.66/200*40 = €8,087.73
1/80 of salary above 3.333 SCP for 40 years: (45000 40438.66) / 80 * 40 = €2,280.67
Total =* 10,368.40* 


Now the entitlement is 50% of the final salary - 22,500 and clearly 10,368.40 us way short, this is what the member contributed 5% to for 40 years and it equates to 199 a week.

The shortfall is 12,131.60, and this is the rate of the pension that the member contributed 1.5% of the gross income towards for 40 years. 

The employer is obligated to pay the total of these two combined ( the two amounts above and the state pension rate) when the member meets the retirement criteria as set out in their scheme - not the SW one. 

As far as I am concerned, this applies to private DB schemes.


----------



## JoeRoberts

There is a reason why public and private sector pensions have separate section on AAM - it's because they are different.
A moderator needs to close and move this thread before more private sector DB scheme members are misled.

PPmeath has no knowledge or experience of private sector DB schemes yet despite being told by people with extensive experience in the area, he continues to think it works the same as the public service. No amount of copying and pasting from the PA website can make it the same.

One of his basic misunderstandings is that generally in the private sector, integrated pensions are based on a % of final pensionable salary, not a % of final salary. The examples from the PA website explain how integration works in general terms.  It does not bind any scheme nor is it a statement of fact/law.

The detailed rules of every private sector pension lies within the trust deed of that scheme. This is the only reference point for a query.
Readers of this thread with a private sector scheme should IGNORE anything he says.


----------



## ppmeath

Well I clearly upset you Joe. But the issue raised by the OP is affecting both schemes, public and private. Both members are seeing a shortfall in their pension entitlements and they are left with a significant shortfall and in a lot of cases they have no choice but to retire at 65.

Personally I think this is a major issue and I don't see why any pension scheme member should be left in this way - because of a change in the state pension?

If anyone needs anymore information then feel free to message me, I will be happy to help with queries.


----------



## Laramie

ppmeath said:


> Did you pay a Class A PRSI stamp? Is your pension integrated with the SW system?



This thread has become so complicated. It is a mix of public service pensions and private pensions advice. 

My pension is a private pension. Defined Benefit. It is integrated with the state pension. I assume I paid the normal PRSI contributions for a private person. I am a deferred pensioner.

My pension booklet only refers to my "pensionable" salary and not my final salary throughout the booklet.

I assume my employer only has to deal with the "pensionable" calculation of my gross salary when my pension is to be paid shortly. I assume that my 5% contributions made to my pension scheme during the time I worked there were made from the "pensionable" portion of my salary. 

I will now have to find an old pay slip to see if these 5% deductions were made from my gross salary or the pensionable portion of my gross salary. (I guess that means my gross salary, less 75% of the single persons state pension at the time) I certainly hope that they were deducted from the pensionable portion of my salary and not my gross salary at the time otherwise my pension plan will have to take in to consideration the state pension?. 

If they were only deducted from the pensionable portion of my salary then I believe that my old employer only has to deal with the pensionable salary calculations, when payment comes due. They can ignore the gross salary calculations.

In that case the state pension looks after itself?


----------



## Protocol

This is what how I think the supp pension works, confirmed to me by Financial Controller in a PS organisation.

Example: retiring at 62 with 35 years service, 50k final salary

Class D would get (35/80)(50k) = 21,875 pension

Class A gets (35/80)(50k - 2(52.18)(233.30)) = 11,223 pension

So the supp pension is 10,652 pa, as long as you fulfill the conditions.


----------



## Nordkapp

Protocol said:


> This is what how I think the supp pension works, confirmed to me by Financial Controller in a PS organisation.
> 
> Example: retiring at 62 with 35 years service, 50k final salary
> 
> Class D would get (35/80)(50k) = 21,875 pension
> 
> Class A gets (35/80)(50k - 2(52.18)(233.30)) = 11,223 pension
> 
> So the supp pension is 10,652 pa, as long as you fulfill the conditions.



However, PS sector organisations insist because of a DPER Rule that you seek JSB (payable for 9 months @ rate €188) and then jot back to the now former employer for the Supplementary Pension ("SP") to make up the shortfall between what you should be receiving (in the example above €10,652) and the JSB already received. The reality is on retirement PS employers will not pay the SP until you have exhausted the JSB, pure madness.

The issue is the SP should along with the occupational pension be payable from retirement date. The fact is that it is not. There is clear inequality between a Class D and a Class A when they retire. I have had this checked out to the nigh this year with my own PS employer who confirmed that along with fellow PS employers their dis-satisfaction to DPER in having to apply this rule.
I now have written to the Minister about this issue as the Rule should be scrapped and the SP paid on retirement by the employer to ensure there is no inequality between both classes.


----------



## Early Riser

Protocol said:


> This is what how I think the supp pension works, confirmed to me by Financial Controller in a PS organisation.
> 
> Example: retiring at 62 with 35 years service, 50k final salary
> 
> Class D would get (35/80)(50k) = 21,875 pension
> 
> Class A gets (35/80)(50k - 2(52.18)(233.30)) = 11,223 pension
> 
> So the supp pension is 10,652 pa, as long as you fulfill the conditions.



Thank you, Protocol, for getting back with this. Your Class A occupational pension is estimate is practically the same as that provided by the Public Service Pension Modeller ( http://www.cspensions.gov.ie/Post95EstablishedCalculator.asp ) The modeller does not provide an estimate for the Supplementary but yours seems exactly right.

Just to note that if you can qualify for the full State Pension at 66 (67 for you?) you will then be doing better than your Class D counterpart. Hence the importance (depending on your PRSI record to date) of continuing to sign for credits after you retire.



Nordkapp said:


> The issue is the SP should along with the occupational pension be payable from retirement date. The fact is that it is not.



I agree that it is a pain to have to apply for the Supplementary Pension separately but there do seem to be some advantages for the Class A person to help counterbalance this. For example, the Class A person retiring with less than full service (such as Protocol) has the potential to continue to build up PRSI credits and may well qualify for a higher level of State Pension than the Supplementary (and, therefore, a higher pension overall than the Class D counterpart). As a State Pensioner the Class a person has the availability of the extra benefits which go with it (eg, where applicable ,the Living Alone Allowance, the Adult Dependant Allowance). The optimistic retiree can even look forward to an extra €10 per week at 80 !

Also the Class A person in employment has a safety net of Social Welfare benefits which I think (?)
are not available to the Class D :

Illness Benefit
Maternity Benefit
Adoptive Benefit
Health and Safety Benefit
Invalidity Pension
Treatment Benefit
Jobseeker's Benefit


----------



## ppmeath

Laramie said:


> This thread has become so complicated. It is a mix of public service pensions and private pensions advice.



Laramie, the thread is complicated because of conflicting advice, the issue is the "integrated" pension scheme. Across both the Private and Public Sector schemes this had the one aim, the principle underpinning both schemes, was that the combination of your occupational pension (that you paid your 5% towards) and your state pension (that you paid PRSI towards) would provide the total  benefit of the pension scheme.

When the state pension age was increased to 66, then this created a gap for both PS and private workers, the majority of whom have a compulsory retirement age of 65, the pension schemes were designed on the assumption that the workers would be paid the state pension on the day they retired.

If you are not entitled to the state pension at 65 - then that offset has to be zero. You can't integrate something that does not exist.



Protocol said:


> Class A gets (35/80)(50k - 2(52.18)(233.30)) = 11,223 pension



I have provided the pension rules, circulars and legislation to provide you with the formula for PS pension calculations, for a 50k salary on 40 years service (as opposed to 35 years):

50k:
Weekly SCP: €233.30
*Annual SCP: €12,131.60*
3.333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years: (40438.66/200*40 = *€8,087.73*
1/80 of salary above 3.333 SCP for 40 years: (50,000 - 40438.66) / 80 * 40 = *€4,780.67*
Total = *12,868.40*
40/80th entitlement 25,000
Shortfall = *12,131.60 
*
I have provided the same information relating to the supplementary pension scheme and yet you ignore it.

According to the Pensions Ombudsman this is how that pension will be calculated:

Weekly SCP: €233.30
Annual SCP: €12,131.60
3.333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years: (40438.66/200*40 =* €8,087.73*
1/80 of salary above 3.333 SCP for 40 years: (50,000 - 40438.66) / 80 * 40 =* €4,780.67
Total = 12,868.40
*
He believes that both the totals above equal the "integrated" pension.

A "supplementary" pension was designed to supplement the pensions of those integrated schemes where, when both the occupational and SW benefits combined - did not equal the benefit (in PS that is 50% of final salary on retirement) provided for in the scheme.

And here is the formula by a pension administrator in the PS and this formula was done in August this year:

_"€56,442.54 - €40,578.63 = €15,863.91
€40,578.63/200 = €202.89*18.633424 = *€3,780.59*
€15,863.91/80 = €198.29*18.633424 = *€3,694.99*
€3,780.59 + €3,694.99 = €7,475.58"
_
There are many people working on this issue, for both Private and Public DB integrated schemes and they have all identified that "integration" is the problem.

@Nordkap -



Nordkapp said:


> The issue is the SP should along with the occupational pension be payable from retirement date. The fact is that it is not. There is clear inequality between a Class D and a Class A when they retire.



Not quite, here is the relevant part of the legislation regarding the supplementary pension:

_"(3) The amount of supplementary pension payable shall be the amount, if
any, arrived at by the formula:"_

The formula is above and the formula for payment of the supplementary pension is below:

_*"A — (B + C)* *where"*_

"_A is the amount of pension or preserved pension which would have been
payable to the former member if he or she had not been fully insured;
_
Using the 60k final pension again as an example, so a 30k pension - "*A"* means that if the pension payable to a person on an "integrated" pension is not the same as a person on a non integrated pension (not fully insured refers to Class D members) if their pension entitlement would have been calculated as follows (Again this is in legislation):

_11. Pension Calculation on Retirement
(1) A member who is not fully insured who retires having attained the minimum
pension age shall be eligible to receive a pension of an amount per annum
calculated at the rate of 1/80th of his or her pensionable remuneration at retirement
for each year of pensionable service.
_
1/80th of 60k = 750 multiplied by 40 years service = 30,000.


*"B is the amount of pension actually payable to the former member,"*

This refers to the occupational part or this part as calculated by the formula above:
_
Weekly SCP: €233.30
Annual SCP: €12,131.60
3.333 times annual SCP: €40,438.66
1/200th of salary below 3.333 SCP for 40 years: (40438.66/200*40 =* €8,087.73*
1/80 of salary above 3.333 SCP for 40 years: (50,000 - 40438.66) / 80 * 40 =* €4,780.67
Total = 12,868.40*


and
_
*C is the amount of personal Social Welfare Benefit payable to the former
member."
*
If you are not entitled to the max state pension but you are entitled to the Job seekers rate - then this is supposed to be added to the 12,868.40, the JSB is 9776 and when added they total 22,644.40. The supplementary pension is the difference between the 30,000 entitlement and the 22,644.40.

The pension assumed however, that the member would be fully insured on retirement after working for 40 years and paying the PRSI contribution for 40 years, any PS worker would be entitled to some SW benefit.

The entitlement is 50% final pensionable salary on retirement after both the occupational and SW pension are combined.

Now, there are people who clearly do not agree with what I am saying, that is fine, but my position is backed by official documentation and legislation. It is being interpreted incorrectly.


----------



## Protocol

ppmeath,

I apologise, I used the older pension integration formula, sorry.

http://circulars.gov.ie/pdf/circular/finance/2005/19.pdf

*Calculation *

9. The revised method of calculation of pension for public servants who fall within the scope of this Circular is as follows: ·

1 /200th of pensionable remuneration below 3 1/3 times OACP [1] · multiplied by the total number of years reckonable service

plus (where applicable) 

 1 /80th of pensionable remuneration in excess of 3 1/3 times OACP · multiplied by the total number of years reckonable service. 

Notes: The same total number of years is used in both the above calculations. It has been agreed that a multiplier of 3.333333 (i.e. to 6 decimal places) will be used to calculate 3 1/3 times OACP


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


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

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


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## Nordkapp

@Protocol

I think 40,578.64 should be 40,434.62?


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## ppmeath

Protocol said:


> 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.



Protocol said:


> 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.



Protocol said:


> 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)."*_



Nordkapp said:


> 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"


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## 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%.


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## IsleOfMan

JoeRoberts said:


> 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.


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## ppmeath

IsleOfMan said:


> 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".


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## 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


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