AVC information for pre 95 Public Sector employees.

[GingerH]

Just to note, the professional added years isn't guaranteed, my organisation recommended one added year and this was accepted, however when the paperwork went to the department, my pension was abated I was awarded 0 added years. It took about 4 months to reach a decision, and they would only accept it 3 months before confirmed retirement date. They went into a lot of details and questions over and back about previous pension schemes. There are a lot of variables such as the required qualifications and experience for the role as it was advertised etc... so 2 people in similar circumstances depending on the job description, might have a different outcome from the process.

Thanks you cant take anything for granted but my arrangements I think are pretty well established for pre 95 engineers/planners in local govt.

 

[CharlieMac]

Post 95 employees would have potential for larger AVCs because they can also fund for the shortfall due to the integration of the Contributory pension into their Public Sector pension.

What do you mean by this exactly?

How would the integration of the CSP with a PS Pension have any bearing on a member's scope for making AVCs?

I've been playing around with "The Single Scheme Estimator Tool" and the "Administrator-Purchase-and-Transfer-Calculator" and they both appear to assume that you will be entitled to the full rate of CSP at age 66. So my understanding is that where you might have a shortfall in your "half final salary" pension at retirement you could only use AVCs to fund the shortfall in the PS Pension component and not any shortfall in the CSP component?

Not everyone will be entitled to the full CSP.... at age 66 I will only be entitled to 32/40's of the CSP. Would be great if I could make up that 8/40's shortfall on the CSP component with AVCs. But that's not the case.

 

[S class]

The maximum revenue allowed occupational pension is 2/3rds of final salary. This equates to a maximum allowable fund of money.

To calculate the maximum possible scope for AVCs, the money value of the actual pension paid, is subtracted from this maximum revenue allowed fund of money.

If the maximum pension paid out is a lot less than 50% of final salary, the money value of this is less than the money value of a 50% pension.

So the person receiving the pension of less than 50% final salary will be left with a bigger amount of extra money available for possible AVCs.

They are then separately entitled to whatever portion of the COAP that they gain from their Prsi contributions.

 

[CharlieMac]

As usual you're right @S class.

And I spent the whole of last weekend pouring over these very calculations from the Single Pension Scheme thread and I only understand the calculation now!

This formula estimates the capital value of HSE Pension benefits (not including the lump sum) one could accumulate between now and retirement.

X = (Current Salary / 2) – 14500
Capitalised value of referable pension from now to 66 = X * 0.025 * (Number of years till you reach age 66) * 25

14,500 is the (approx) annual value of the current CSP.
It assumes you need 40 yrs to get Full Service, (0.025 = 1/40th)
25 is a valuation factor (at age 66) from DPER-Circular-Letter-27.06.2014 which is used to put a capital value on PS pension benefits.
X is a number which is half your salary with the state pension subtracted so we only get the capital value of benefits that could be accrued as a result of contributions made in to the pension scheme of the PS employment.

Only problem is I see now that formula is using the pre-2013 PS pensions method of how pension entitlements are accumulated in 1/40's each year whereas the Single Scheme is a career average of earnings. Anyway maybe it's not going to be a million miles off giving an idea what your AVC funding gap is.

 

[S class]

@CharlieMac

You can always use your maximum final salary in the three final remuneration calculation methods, to calculate the revenue maximum fund value. So it's the the final salary that matters for the calculation of maximum AVCs not the career average.

If your pension is based on a career average and is lower because of this, there will be less money value subtracted from the revenue maximum fund value. This would allow even more scope for larger AVCs.