Bridging the gap between 60 and oap

I believe that what Gordon Gekko is saying is spot on and that a class A PRSI employee in these circumstances will certainly receive their full pension at age 60, with all €40k of it in the example given coming from the employer at that time (about 12k of it would be the supplementary pension portion). Then, as Gordon says, come state pension age for that employee, the supplementary pension gets replaced with the state pension. No doubt it's quite messy for employees in this situation as the supplementary pension needs to be applied for in the first instance and the employee must have proof from the dept of social protection that they failed to qualify for job seekers benefit or other welfare payment in order to get this supplementary pension. But this should be a mere formality to be honest and there is no doubt in my mind that said employee will indeed receive the supplementary pension shortly after. What abcass said earlier about employees retiring having paid class D PRSI is an interesting point that I hadn't thought of before. It is very unfair on class A employees that they are not allowed to work, even for a small amount of income, after retiring early without it affecting their supplementary pension payment whereas their class D equivalents are entitled to earn after early retirement. This definitely discriminates against class A employees who retire early. The unions seem to be seriously behind the curve when it comes to this issue and it's worrying for many PS employees, more and more of whom will fall into this category over the coming years, myself included (but a long way off for me yet!). They really should be looking into ensuring that early retirement is as seamless as possible for class A employees and that they enjoy the same rights as their class D equivalents in terms of being able to do some paid work after early retirement without forfeiting some of their supplementary pension.

I may have put out a request before, but if any past PS worker reading this is in receipt of a supplementary pension, it would be greatly appreciated by readers of this thread if they could give some general details about how the whole process went for them, what they had to do to get it etc. It would certainly help put the minds of many current PS workers considering early retirement at ease.
 
I believe you are correct in this. However, 60 is the minimum retirement age for the pre-2004. 65 is the compulsory retirement age for these.
 
Just following up on this thread. Did cindyc or allencat3 hear any more about the supplementary pension in the meantime? Is there anyone reading the thread who has gone about and receives a supplementary pension? There must be a good few people out there receiving it but it would be great if someone could contribute to the thread to give some details about what they had to do to receive it. It would put readers minds at ease to know that some class A retirees have successfully applied for this supplementary pension.
 
Hi there, I have noticed a few questions regarding the integrated Public Sector pension. Perhaps this will help, I am new on the forum, so I cannot post the links as of yet.

"In 1995, the Government decided that established civil servants (and public servants generally) appointed on or after 6 April 1995 should be subject to the Class A rate of PRSI contribution and that their occupational and State pensions should be ‘integrated’. ‘Integration’ means that, in effect, the public service pension awarded on retirement is reduced by the amount of the State pension. At the same time, explicit pension contributions (approximately 5%) were introduced for new members of most schemes which had formerly been non-contributory and the pay scales of these new entrants were increased, effectively to match the contributions being levied."

"The extent of the reduction in public service occupational pension benefits arising from changes made in 1995 and 2004 depends on the area of the public service and on the individual circumstances of each employee. The effect of the reforms might best be shown by a hypothetical example; assuming in all three cases (shown beneath) that the person retiring has 40 years’ reckonable service and a final pensionable remuneration of €50,000:

"Pre 1995 civil servant: Pension €25,000 payable at age 60"

"Post 1995 civil servant: Pension €14,000 payable at age 60 (plus State pension of €11,000 - rounded for purposes of example) "

"Post 2004 civil servant: Pension €14,000 payable at age 65 (plus State pension of €11,000)"


With regard to the supplementary pension:

"A supplementary pension is an additional amount of pension that may be paid to a person whose occupational pension is co-ordinated with the Old Age Pension. It is paid in circumstances where the combined pensions (i.e. occupational and Social Welfare benefit) are less than the pension they person would receive if the occupational pension was calculated on a non-co-ordinated basis. It comes in for consideration when a person who is umemployed and who through no fault of their own fails to qualify for any Social Welfare entitlement; it represents the difference between the total of the pensions actually received by the person and the pension that would be payable if the occupational pension was not co-ordinated with the Old Age Pension."

So, post 95 with 40 years service receive the same pension as a pre 95er except it comes from two sources, the employer and the Social Welfare.

If he/she does not have the required contributions for the entire OAP pension, then he/she applies for the supplementary pension.
 
"Post 1995 civil servant: Pension €14,000 payable at age 60 (plus State pension of €11,000 - rounded for purposes of example) "

As the State Pension is paid from the age of 66 (or 67/68 depending on the DOB of the retiree), would it be replaced by the Supplementary Pension?

Have not come around to asking the HR or PeoplePoint re the Supplementary Pension, as I'm still awaiting word re the pension estimates for early retirement at end of 2016.

Allencat3
 


Hi allencat -

"For most staff appointed before 1 April 2004, pension benefits are generally payable from age 60, and a compulsory retirement age of 65 applies. In a few areas, where the nature of the work places special demands e.g. Gardaí, Permanent Defence Forces and firefighters, arrangements for pension payment and retirement at an earlier age are in place."

You are treated the same as a pre 95 in relation to your pension benefits, what changed was how you contributed to it, you pay the full PRSI, which entitles you to the State pension, but you receive it if you are eligible to retire at 60.

The supplementary pension is only relevant if you (for one reason or another), did not make enough PRSI contributions to meet the eligibility criteria for the full state pension.

file:///C:/Users/Sony/Downloads/Circular-33-2007-Civil-Service-Superannuation-Arrangements%20(3).pdf

"Both schemes are “integrated” schemes, which means that, in the case of people who are fully insured1 for social welfare purposes, the pension payable takes account of eligibility for payment of the social welfare State Pension (Contributory) [SPC] [formerly known as the Old Age (Contributory) Pension]. In certain circumstances, a supplementary pension may be payable to a person, who is fully insured, in respect of periods during which s/he is not employed in any capacity which involves a social insurance contribution and, due to causes outside his/her own control, fails to qualify for social insurance benefit or qualifies for such benefit at less than the maximum personal rate."


Edit to add: Allencat - I read back on your particular situation, would you mind telling me if there is a compulsory retirement age in your particular section, are you a "Civil Servant" (I can locate the relevant circulars)? Thanks.
 
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Reply to ppmmeath: as I had entered (at age of 44) the CS in 1997, I have an option to retire anytime from age of 60 to 65 and my reckonable service as of today is just over 14.5 years. Having just suffered eye health problems making computer-work/reading print quite difficult, I've to check out the disadvantages of retiring early which would seriously affect my PRSI credits required for State Pension (at age 66 in 3 years' time). Quite complicated ...
 
Allencat - quick response to this, have you looked at the option of Ill Health Retirement rather than early retirement?

You see if you had 24 years contributions in the private sector and have paid the A stamp from 1997 - then you might have enough credits already.



2. Number of paid contributions
If you reach pension age on or after April 6 2012, you need to have 520 full-rate contributions (10 years contributions). In this case, only 260 of the 520 contributions may be voluntary contributions.

However, if you were a voluntary contributor on or before April 6 1997 and you have a yearly average of 20 contributions, you may meet the requirement if you have a total of 520 full-rate contributions (of which only 156 need to be compulsory paid contributions).

I think you already qualify for the contributory state pension.


"I was NOT eligible for Illness Benefit/Dental Benefit for which at least 2 years' PRSI contributions were required to be eligible."

You were extremely unfortunate allencat3, you fell through a gaping hole here because you took the incentivised break.

"Social insurance (PRSI) contributions
To qualify for payment of Illness Benefit you must satisfy the following two conditions:

  1. You must have at least 104 weeks PRSI contributions paid since you first started work
    and either



  2. (a) 39 weeks of PRSI contributions paid or credited in the relevant tax year, of which 13 must be paid contributions. If you do not have 13 paid contributions in the relevant tax year, then 13 paid contributions in one of the following tax years can be used instead:
    • Either of the two tax years before the relevant tax year
    • The last complete tax year (before the year in which your claim for Illness Benefit begins)
    • The current tax year"


Take a look at the ill health retirement scheme - given your declining eyesight (sorry to hear that by the way), you could be eligible for this and you could have extra years (6 3/4 years normally, as long as it's not more than the service that you would have worked) added to your service.


As above, I think you already qualify for the full state pension so the supplementary pension is not applicable to you. If you were to take ill health retirement, then your way to bridge the gap may be the receipt of disability/invalidity (not sure, I would have to check this out) pension on top of whatever occupational pension you receive.

Let me know what you think and if you want additional information just let me know.

EDIT: allencat, re: you eye condition, you may be entitled to a "Blind pension" (if your qualify, this may or may not apply to you and the medical condition).
 
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Hi, you seem knowledgable on this. Could you elaborate on what constitutes "causes outside his control" from the above quote and give examples if you can.

Let's say I resign from the public service at age 40 with 20 years' service and never work again, don't pay any voluntary PRSI, don't sign on or get any credits.

If I am a pre 1995 public servant it seems clear that I will get 20/80ths preserved occupational pension at age 60.

But if I am a post 1995 public servant, would I get a supplementary pension on top of my occupational pension to bring me up to a total pension 20/80ths. Or would the fact that I resigned and didn't work again and had a low number of PRSI contributions as a result constitute a "cause WITHIN my control", disqualifying me from getting the supplementary pension?

Thanks
 

I am not an expert but I expect "causes outside his control" may refer, for example, to eligibility rules for social welfare which can change from time to time - the duration of Jobseeker's Benefit or qualifying criteria for payments being examples. A person retiring at 60 would be expected to apply for Jobseeker's before being eligible for a supplementary pension.

In your hypothetical example (and presuming it is a scheme which allows normal retirement at 60) I do not see why you would not be eligible for a supplementary pension at 60 to bring you up to the rate equivalent to a pre 1995 scheme retiree. I say "a supplementary pension" as there is no set rate. In your case it would take into account that you had only 20 years PRSI payments in the public service position. The objective is to equalise the rate to a pre 1995 retiree, not to give you an advantage. At 67 you would be eligible for a reduced state pension based on your 20 years of contributions and you would lose the supplementary.
 
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Hi The Ghoul,

"But if I am a post 1995 public servant, would I get a supplementary pension on top of my occupational pension to bring me up to a total pension 20/80ths. Or would the fact that I resigned and didn't work again and had a low number of PRSI contributions as a result constitute a "cause WITHIN my control", disqualifying me from getting the supplementary pension?"


Using that example, in my opinion, you would be disqualified.

I should stress here that this is my opinion looking at those facts, anyone in that situation should contact their SW office and seek clarification.

The reason is that you have a 20 year gap but you were not sick, you were not unemployed and therefore not insured for the entire 20 years.

EDIT; If I can refer you back to allencats predicament for a moment to explain, even though he had paid PRSI in the private sector for 24 years, to avail of the particular entitlement that he applied for, he had to have contributions (or be insured) in the period that he took the career break. He wasn't working in that period, so he didn't pay a stamp (his insurance) and he wasn't claiming a SW benefit. Which is why he fell through the gap.
 
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Early Riser, post: 1461707, member: 49673"]I am not an expert but I expect "causes outside his control" may refer, for example, to eligibility rules for social welfare which can change from time to time - the duration of Jobseeker's Benefit or qualifying criteria for payments being examples. A person retiring at 60 would be expected to apply for Jobseeker's before being eligible for a supplementary pension.

In your hypothetical example (and presuming it is a scheme which allows normal retirement at 60) I do not see why you would not be eligible for a supplementary pension at 60 to bring you up to the rate equivalent to a pre 1995 scheme retiree. I say "a supplementary pension" as there is no set rate. In your case it would take into account that you had only 20 years PRSI payments in the public service position. The objective is to equalise the rate to a pre 1995 retiree, not to give you an advantage. At 67 you would be eligible for a reduced state pension based on your 20 years of contributions and you would lose the supplementary.[/QUOTE]

Hi Early Riser,

Just to clarify:

"What is a supplementary pension? A supplementary pension is an additional amount of pension that may be paid to a person whose occupational pension is co-ordinated with the State Pension. It is paid in circumstances where the combined pensions (i.e. occupational and Social Welfare benefit) are less than the pension they person would receive if the occupational pension was calculated on a non-coordinated basis. It comes in for consideration when a person who is unemployed and who through no fault of their own fails to qualify for any Social Welfare entitlement; it represents the difference between the total of the pensions actually received by the person and the pension that would be payable if the occupational pension was not coordinated with the State Pension."

The pre 95 member had no entitlement to the state pension, because they did not pay a class A stamp. The arrangements changed and from 1995 entrants to the CS/PS were paid a higher salary (to compensate for paying the A stamp), this is their contributory stamp and this is the basis for eligibility for the state pension/SW entitlements.

In the example used by the The Ghoul, the person was not "unemployed" or "sick" during the 20 year period, therefore he was not making a PRSI contribution, nor was he in receipt of a benefit, either unemployment or illness. These are the "causes outside his control".

From the link I posted above:

"In certain circumstances, a supplementary pension may be payable to a person, who is fully insured, in respect of periods during which s/he is not employed in any capacity which involves a social insurance contribution and, due to causes outside his/her own control, fails to qualify for social insurance benefit or qualifies for such benefit at less than the maximum personal rate."

If a person was unable to make contributions due to unemployment, then they should have been in receipt of unemployment benefit. If they were unable to make contributions due to illness, then they should have been in receipt of illness benefit.

Resigning from a post and not claiming any of these benefits and not contributing during the 20 year period means that they were not insured during that period.

While the eligibility rules can (and do) change from time to time, the "causes outside his control" remain the same.

"The objective is to equalise the rate to a pre 1995 retiree, not to give you an advantage."

But he would have an advantage because the pre 1995 retiring on a pension, paid the required payments to the employer over the 20 years, while in this example, the post 95 received a higher income to set off the PRSI contribution, which he paid for 20 years.

While both the pre and post 95 paid the same contributions (effectively), how the pension was funded changed.

The post 95er had full SW entitlements, that the Pre 95er did not have.

In this example, where this person resigned at 40, never worked again, never claimed any benefits and never made another PRSI contribution, the next question is (and I didn't bring this up before, because we might be moving away from the question), what did he live on for 20 years?

No income from employment, no income from unemployment, no income from illness and no voluntary PRSI payments.

" At 67 you would be eligible for a reduced state pension based on your 20 years of contributions and you would lose the supplementary."

That is what he is eligible for at 60 and this brings us back full circle to the supplementary pension.

Let's say that he is entitled to 10/80ths (the pre 95 in this example is entitled to 20/80ths), the balance is paid from the PRSI contributions to bring him to 20/80ths. But if his contributions only bring him up to say 15/80ths because of a gap in his contributions due to unemployment or illness (where he claimed his entitlements), then he receives the balance by way of the supplementary pension.

In this case, the gap is 20 years and it cannot be explained through unemployment of illness.

He had an option to work and contribute or to buy the PRSI stamps - these are circumstances within his control.

Edit:
Just to finally add, the supplementary pension is not to bridge the age gap, it's to bridge the gap in contributions for eligibility to the full state pension, if any.
 
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Thanks for those replies It's good to discuss this as clearly the supplementary pension is very important for post 1995 civil and public servants. Given its importance and with people having different life stories and employment histories, it makes me uneasy when I read things like "may be payable" "through no fault" or "outside his control".

Just to pick up on a couple of things while I digest those posts.

The higher salaries for post 1995 entrants only seem to apply to civil servants.

Pre 1995 civil servants do not pay superannuation or Class A PRSI
Post 1995 civil servants pay superannuation and Class A PRSI
There are different salary scales for pre and post 95 to take account of the superannuation difference

Whereas for public servants (teachers, HSE, local authorities etc.)

Pre 1995 public servants pay superannuation but do not pay Class A PRSI
Post 1995 public servants pay superannuation and Class A PRSI
The salary scale for a pre 95 is the same as for a post 95

Back to the supplementary pension and whether something is outside or within a person's control:

In my example both the pre 95 and post 95 are public seravnts and get the same salary. Both work for 20 years, both never work again, are not seeking work and neither claim nor are entitled to any social welfare. If the post 95er is disqualified from getting the supplementary pension he is surely disadvantaged compared to his pre 95 counterpart when both made the same life choices.

To turn it around, lets say that the 20 year gap is before they start in the public service. They live abroad etc and only start working at age 40. At age 60 the pre 95er gets a 20/80ths pension. The post 95er should surely get the supplementary pension to bring him up to the same total pension as the pre 95er. The difference between this and my first scenario is really that the second one "sounds better" and "more normal" than the other.

I am starting to come around to the following interpretation of the outside control and fault statements and I think this may be touching on what Early Riser is saying

-JSB and JSA require a person to be seeking employment. JSA is also means tested.
-There is no obligation on any person to seek employment or to have any level of assets.

Hypothetically, let's say the seeking work and means test requirements were removed and the unemployment payment was made to anyone who is not working. The post 95 public servant retires at age 60 but the COAP is not payable until age 67. He is not seeking work and has high assets but that's fine in this hypothetical scenario. Yet he refuses to claim his unemployment entitlement and instead wants a supplementary pension. He is refused because it was his "fault" that he didn't claim his social welfare entitlement.

Thoughts?
 
Hi PPM and Ghoul - There are a lot of scenarios there which i am not going to go into. Just a few points.

PPM, You say the following "Just to finally add, the supplementary pension is not to bridge the age gap, it's to bridge the gap in contributions for eligibility to the full state pension, if any." Unless there has been a very recent change to Public Service Pensions, which I am not aware of, then this is mistaken. There are numerous public service department circulars and documents attesting to this, eg, Circular Letter S 10 99 and Dept of Education EN PEN 1 - I can't post links but try Google. To quote from the second mentioned document :"Supplementary pension is available, on application, to retirees in order to make up the shortfall in pension for the period between date of retirement and the age of eligibility for State Pension (Transition) or State Pension (Contributory) where the non payment of Social Welfare Benefits is through no fault of the retiree" and "In the case of Cost Neutral Retirement, Supplementary Pension is not payable before age 60".

There is ambiguity, however, in what is meant by "where the non payment of Social Welfare Benefits is through no fault of the retiree". Welfare payments may include jobseeker's payments, invalidity/illness benefits, widows/widowers benefits.

I refer back to the purpose of the Supplementary Pension. It is to equalize the pension position of Class A and Class D public servants. To quote from an INMO document:

"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".

To quote from The Civil Service Superannuation Handbook:
" 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."

A retired public servant (Class A) who is over 60 must show that they are not entitled to any Social Welfare payment (by engaging with Social Welfare) and not engaged in any insurable employment. I have never heard of (nor had sight of any document referring to) any requirement to show what they had been living on in the prior interval between early retirement (if retired/resigned before 60) and their application - but I would be very interested to learn of any. In The Ghoul's original hypothetical of the 40 year old retiree, he may have been living on his beneficent spouse or growing all his own requirements in his back garden! However, he may also have worked in the private sector to age 60 and resigned - in which case he would have to apply for Social Welfare payments and when these end, or are declined, he can apply for supplementary pension. In this scenario he would probably be eligible for a higher State Pension at 66/67.
 
Yes, the bit I have put in bold is more or less what I intend to do! I don't see that my employer or the Dept of Social Welfare have any business knowing about this.

So I do my back garden thing and then when I reach 60 as a post 95er I get my preserved benefit occupational pension and also apply for JSB/JSA. I am not available for work and have assets so I am refused. I should then get the supplementary pension which means that my total pension is no worse or better than that of a pre 95er. As pointed out above I may still be at a disadvantage if I am precluded from working while claiming the supplementary pension compared to the pre 95er who is not precluded from working while claiming his occupational pension. But this would be no big deal for me seeing as I wouldn't want to work.

Good thread
 
Related to this - voluntary PRSI contributions. Let's say I stop working at age 40 which means I am no longer contributing to the public service pension scheme. However I decide to pay a voluntary PRSI contribution from age 40 to 60. This increases my contributory old age pension but that's not payable until age 67.

In this case it would seem that the voluntary contributions would only be taken account of for the COAP at age 67, not for calculating the supplementary pension at age 60.

Whereas if I didn't pay any voluntary contributions, the supplementary pension and the COAP would be the same with the COAP replacing the supplementary pension at age 67.

I don't mean to hog the thread with my own circumstances but any public servant post 95 who has or might have a gap in in thier PRSI contrbutions for any reason might get some benefit from this discussion.
 


Yes, Ghoul, my understanding is broadly as you have outlined. The calculation of the Supplementary (as eligible) is based on your number of years in pensionable public service paying Class A, not any subsequent Class A contributions. At 67 the COAP would replace the Supplementary and should be approximately the same (assuming no additional PRSI contributions) but not necessarily exactly the same - the wording in the documentation is "approximate" rather than equal.

However, there is one point in your hypothetical scenario, which I am unclear about. I understand that if you retire between 60 and COAP age you are expected to apply for, and avail of, Unemployment Benefit, and that therefore you will not receive Supplementary for the 9 months while receiving this. I do not think (but I am certainly not sure about this) that you have the option of simply saying I am not available for work - this would be a circumstance within your control. My understanding is that in this scenario "job activation" is not deployed (de facto if not officially). Perhaps someone reading could throw some light on this?

After the 9 months you are likely to be above the means for Unemployment Assistance and, hence eligible for Supplementary. In the event of earlier retirement with Preserved Benefits (eg, at age 55) you would obviously not be entitled to JB at 60 - but I presume that you have to apply to Social Welfare to demonstrate this.

And, yes, there is the disadvantage for the Class A retiree of being precluded from working beyond 60 together with receiving the Supplementary, as opposed to the Class D retiree who can collect his/her full preserved pension while working.

I am using Class A and Class D to differentiate as there are so many Public Service Schemes and some pre 1995ers were also in Class A schemes (ie, coordinated with COAP).
 
Thanks to everyone for their recent contributions, it's really interesting to get people's viewpoints on this issue. As a class A post 95er myself I am also wondering about the situation with the pension modellers in terms of retiring before OAP age. They appear to throw out different numbers for class A and class D employees who have the same service. To give you an example, if I plug in 30 years service for a class D (pre 95er) employee then at age 60 this employee would be entitled to a pension of €22.5k and a lump sum of €67.5k, as you'd expect when you do the math. However, if you plug in the same 30 years service for the class A employee then at age 60 this employee would be entitled to an occupational pension of €13370 along with OAP of €12173.59 from pension age - this is actually a good bit more than the €22.5k the class D person gets. Does this mean the supplementary pension payable from age 60 would then also be €12173.59 or would it be the difference between €22500 and €13370 i.e. €9130? In any case it appears that the class A employee would actually receive a greater overall pension than the equivalent class D employee for the same amount of service, at least once the OAP kicks in. What is interesting though is that this extra pension for the class A employee only exists if the service completed is less than the 40 years. If you plug in 40 years service for both PRSI categories then the combination of occupational + OAP for class A is exactly the same as that for class D according to the modellers. So it looks like a class A employee retiring without full service will have a little extra compared to their class D counterpart who has completed the same amount of service. Of course I'm not complaining as a class A person but am I correct on this? Something else for people to ponder!

Should have said in my example the employees are both paid €60k at retirement
 

As regards, the Supplementary - it should be approximately the difference between the two figures in your scenario, ie, €9130.

You say that the Class A person would get a COAP of €12173. Is this the full rate COAP ? Would the person in your scenario qualify for the full COAP if the have a contribution gap between 60 and State Pension age ? Of course it might be possible for the person to get credited contributions up to OAP age by signing on with Social Welfare in the interval, while obtaining Supplementary Pension after the Jobseeker's payment has expired.
 
I just checked citizensinformation there and it appears that €12173 is now the full rate COAP for those having 48 or more yearly average PRSI contributions. Very good question about whether the class A employee would qualify for the full COAP if there was a gap in contributions - I'd have believed that they would have to get some additional supplementary pension if they didn't get the full COAP, to ensure they were no worse off than their class D counterparts but it's just my own opinion - the way the modeller is putting out the numbers it looks like the class A person would be better off anyway than the class D person once OAP age was reached (almost certainly as long as they had at least 40 yearly average contributions, which would give an approximate yearly OAP of €11950), but who really knows I guess! When you look at it, it all seems very messy for the class A employee compared to the class D person! Maybe that's what the government want though.
 
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