Advice re Leaving Public Sector

llgon said:
A public servant on 70k now would have been on €73,500 at the same point on the payscale pre-2010.
Click to expand...
Thanks I was going of someone who was saying the were on over 84k before cuts and took a 10k cut they say they are on around 75k now,
 
Am I wrong to ignore the State Pension in my analysis?

If she stays as is, €40k defined benefit pension from age 60 which first includes Jobseekers, then Supplementary, and then State Pension, but it’s 40 grand consistently.

If she jumps ship now, €20k defined benefit pension from age 60 which first includes Jobseekers, then Supplementary, and then State Pension.

It seems pretty unfair though that someone like her is only getting €7,000 a year of a pension as everyone gets the State Pension.
 
Yes I have pointed this out in the past Grade 3 on around 40k after 40 years gets around 7.5K ,the only thing is no matter what happens the will get 50% of a pension so he/she will get 50% of the grade they retired on,

I have seen people on hear who are now around 40 posting they expect there pension to be only worth around 5 euro week by the time they retire,I hold the view if people are expecting this to happen it will,so her pension is worth 20k in today's money and will not go down no matter what happens to the cont OAP,
 

I'm not sure I am following you here.

If she stay and retires on €80,000 she gets a total pension of €40,000, inclusive of State Pension (currently about €12,600) - or Supplementary before then ,ie, €27400 + €12600.

If she (theoretically) resigned now with 20 years service and ceased working, her preserved Occupational pension at 60 (again assuming salary of €80000) would be about €13,660. Her Supplementary pension would be €6340, giving a total of €20000. At 68 she would be eligible for the State Pension. Under the incoming rules, as we understand them, this would be a half pension if she had only paid PRSI for 20 years - so still €20000 total. (The same would apply if she were 60 now and retiring with 20 years service and didn't have previous relevant PRSI - she may improve things if she could sign for Credits).

If she resigns now and works in the private sector she will continue to pay PRSI and, thus, should qualify for a full state pension. (It doesn't matter whether the job has a pension scheme or not).

The state pension is calculated based on PRSI record, whether public or private sector, coordinated pension or not. It is the Occupational Pension that is calculated with reference to the State Pension.
 
Last edited:
RETIRED2017 said:
Yes I have pointed this out in the past Grade 3 on around 40k after 40 years gets around 7.5K ,the only thing is no matter what happens the will get 50% of a pension so he/she will get 50% of the grade they retired on,
Click to expand...

True. But retiring on a salary of €40k would mean they are currently paying about €2,500 pa gross in contributions - or about €1300 net. Historically, pre PRD, it would have been considerably lower.Their State Pension - circa €12,600 - would be based on their PRSI.
 

My point is that:

- Someone on €80k who resigns after 20 years gets €20k (broadly €7k plus €13k)
If they never work again, they get €20k.

- If they take up private sector work and don’t contribute to a private pension, they still get €20k of pension.

Seems unfair.
 

Not so. If they take up private sector work (pension scheme or not) they will pay PRSI. Their state pension will be based on their total PRSI record. So if their record entitles them a full pension they will get €12600 plus €13400 post 68 (plus any private sector pension, if applicable).
 
Last edited:
RETIRED2017 said:
Thanks I was going of someone who was saying the were on over 84k before cuts and took a 10k cut they say they are on around 75k now,
Click to expand...

Probably inclusive of Pension Related Deduction - or Additional Pension Contribution as it has become (and looks like it is here to stay).
 
I understand all this ,The amount taken in prsi was higher If I remember correctly the year the PRD came in payroll prsi was 10% for before this it was employees now it is 4% + usc ,before this it was around 8.5% ,
 
Early Riser said:
Probably inclusive of Pension Related Deduction - or Additional Pension Contribution as it has become (and looks like it is here to stay).
Click to expand...
I expect that was it,the were open about how much they earned before the cuts so no reason not to be now,

I have checked since,
Your correct the also included the USC they are on a D stamp,
 
Last edited:
RETIRED2017 said:
I understand all this ,The amount taken in prsi was higher If I remember correctly the year the PRD came in payroll prsi was 10% for before this it was employees now it is 4% + usc ,before this it was around 8.5% ,
Click to expand...

No idea, but according to Google PRSI Class A1 in 2008 was 2% up to €127 weekly, 6% on €125 - €1925 and 6.5% above this (with a lower rate for higher earners) :https://www.welfare.ie/en/downloads/sw14_08.pdf
 

I don’t understand this.

- Hang up the public sector boots now and get €20k from age 60

- Hang up the public sector boots now, take a non-pensionable private sector job, and still only get €20k.

Where’s the extra money coming from?
 
Early Riser said:
No idea, but according to Google PRSI Class A1 in 2008 was 2% up to €127 weekly, 6% on €125 - €1925 and 6.5% above this (with a lower rate for higher earners) :https://www.welfare.ie/en/downloads/sw14_08.pdf
Click to expand...
If you check it was 8% in 2010 along with the 10.75 Employers contribution close to a total of around 18%/ one sixth of total payroll since 1995 along with there pension contributions ,there are lots and lots out there on a contributry pension after paying very little in,
 
Ok. Lets work it on the basis of the incoming eligibility rules for the State Pension, insofar as we understand them (the calculations are different for the existing rules but the same principles apply). For simplicity lets ignore Jobseekers for the moment.And use rounded figures.

Hang up the boots now and get €13,400 Occupational Pension at 60. Get State Pension at 68. If only 20 years PRSI contributions this would be half pension €6,300. Between 60 and 68 apply for Supplementary Pension - €6,600. Ignore the discrepancy between the Supplementary and the reduced rate state pension for the moment. Either way circa €20000 total.

Hang up boots now and work for 20 years in private sector with no pension scheme - but paying PRSI, of course. Two options:
1 Give up work completely at 60 and take Public Sector Occupational Pension. Get €13400 Occ Pension plus €6600 Supplementary (total €20000). At 68 apply for state pension. Now with 40 years PRSI get full pension - €12600 (Supplementary finishes) -total €26000.

2 Continue working in private sector up to 68. Get Public Sector Occupational Pension at 60 but not Supplementary - €13400 pension plus private sector salary. At 68 get State Pension - total €26000 from age 68.

Just to note that there are various intermediate points beween 1 and 2 - eg retire from private sector at 62 or 63.
 
Last edited:
My general point is that, in comparing the public sector and private sector pensions, you should ignore the State Pension element. Use only the public sector Occupational Pension - €27300 after 40 years or €13650 after 20 years (or whatever exact figure). Once she has 40 years of PRSI Class A contributions (from whatever source) she should get the full State Pension anyway.
 
I get it now, thanks. At 60 only €6,300 of the entitlement is State Pension for someone who’s done 20/40 years.

So if she takes the private sector role, works to 68, and just takes the €10k employer contribution, she’ll have 28 years of investment growth plus a pension of €27k or thereabouts.

Not bad.
 
Last edited:
You must log in or register to reply here.
Menu
Log in
Register