I have never come across the Army Pension scheme before but I had a quick scan of this :https://assets.gov.ie/37137/88a252edc50847a185f5a30cbd7ce3fa.pdf.1. Once I reach state pension age, do I retain my army pension, or does it cease?
I'm considering investing my army pension directly into a private pension fund, to draw down if I make it to 68 (or for my wife, if I dont).
I don't get this. As I understand it there is no "fund" for the defence force pension. It is a defined benefit scheme paid out of the public exchequer.
Hi thanks for the reply, and your efforts.I have never come across the Army Pension scheme before but I had a quick scan of this :https://assets.gov.ie/37137/88a252edc50847a185f5a30cbd7ce3fa.pdf.
It seems the pension consists of two element. First, a flat rate which is based on retiring rank and on 21 years of service. According to the document this flat rate is for life. The second element relates to pensionable pay at retirement (which includes any allowances) and on any service beyond 21 years. On my reading of the document, this second element continues until State Pension age only.
I don't get this. As I understand it there is no "fund" for the defence force pension. It is a defined benefit scheme paid out of the public exchequer.
Has the issue of Pension Abatement come up? (Appendix E in the document in my earlier post)?I'm 41 and in receipt of an army pension, worth €17,904 per annum. I am now employed in the public sector on just over €60k per annum.
Hi, thanks for the reply, much appreciated.I'm assuming that you're now in the Single Public Service Pension Scheme. Your contribution to that is very roughly 5% of salary. Your ability to claim tax relief on pension contributions is limited to 25% of your salary, inclusive of what you're already paying. (You cannot make pension contributions and claim tax relief against pension income.) So, very roughly, your upper limit is 25% of €60,000, less the 5% you're already paying: about €12,000 per year.
Whether or not this is a good idea depends on your personal financial circumstances, expected tax rate in retirement etc.
So I'm not paying into a pension at present (bar PRSI) but I am availing of the single PSPS, I think thats what it was.
I see, so its not really sensible/viable to use my current pension payments, to pay into a private pension.
You should leave aside your current pension income for now. As you are a member of an occupational pension scheme at the moment (PS Single Scheme) you need to link any additional pension contributions to this - you can't start a seperate pension. The way to do this is via an AVC - an Additional Voluntary Contributions linked to the Single Scheme. You can only draw down on these AVCs when you draw down the main scheme benefits. If you left the PS for something else at a later stage you would have to stop payments into the AVC at the same time.I see, so its not really sensible/viable to use my current pension payments, to pay into a private pension.
There are loads of providers of AVCs. There is likely to be one (usually Cornmarket) who has an arrangement with your current employer and can set up an AVC seamlessly through salary deduction. But some people find their charges excessive. Other providers offer what is known as a PRSA-AVC - essentially the same but the contribution is done through your bank account and not through salary deduction.
As LD has pointed out, you will need to consider whether paying this amount into a pension scheme makes financial sense in the long term. You may need to take advice on this.
Hi, thanks for the reply, much appreciated.I'm assuming that you're now in the Single Public Service Pension Scheme. Your contribution to that is very roughly 5% of salary. Your ability to claim tax relief on pension contributions is limited to 25% of your salary, inclusive of what you're already paying. (You cannot make pension contributions and claim tax relief against pension income.) So, very roughly, your upper limit is 25% of €60,000, less the 5% you're already paying: about €12,000 per year.
Whether or not this is a good idea depends on your personal financial circumstances, expected tax rate in retirement etc.
They are not separate pots of money - stop thinking of it this way!I see, so its not really sensible/viable to use my current pension payments, to pay into a private pension.
Has the issue of Pension Abatement come up? (Appendix E in the document in my earlier post)?
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