Bridging the gap between 60 and oap

[Early Riser]

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

 

[Early Riser]

But surely the person is not worse off? In this scenario the Supplementary Pension to bring the total up to the Class D level approximates to €9130. Provided the person gets a COAP at least equal to this amount ( and he/she should) there is no additional supplementary applicable, as the person is not worse off.

Also check out the conditions for a full COAP. 40 years of contributions may not be sufficient for a full COAP, depending on what age the person started insurable employment. And bear in mind that the method for calculating eligibility rates may change in coming years. For both of these reasons it is preferable if the person retiring early can maintain their contribution record - eg credited contributions.

I agree that it is certainly more messy for a Class A employee but remember that the bottom line is that they should be no worse off financially. And, if they can maintain their PRSI contribution record from the date of retirement until COAP age there is a possibility of being ahead.

 

[japester]

But surely the person is not worse off? In this scenario the Supplementary Pension to bring the total up to the Class D level approximates to €9130. Provided the person gets a COAP at least equal to this amount ( and he/she should) there is no additional supplementary applicable, as the person is not worse off.

Also check out the conditions for a full COAP. 40 years of contributions may not be sufficient for a full COAP, depending on what age the person started insurable employment. And bear in mind that the method for calculating eligibility rates may change in coming years. For both of these reasons it is preferable if the person retiring early can maintain their contribution record - eg credited contributions.

I agree that it is certainly more messy for a Class A employee but remember that the bottom line is that they should be no worse off financially. And, if they can maintain their PRSI contribution record from the date of retirement until COAP age there is a possibility of being ahead.

You're dead right - the class A employee should be no worse off in this case so no supplementary pension would arise. It's important that you mentioned about the conditions for full COAP as a lot of people wouldn't be aware of this and if I retire early, as I am most likely to do, I would definitely have to go about making sure that I maintain my contribution record as it may mean a few extra bob come OAP age. I guess as time passes, and as more and more early retirees fall into the class A bracket, we'll learn a lot more about the whole ins and outs of the pension situation for these people.

 

[ppmmeath]

@ Early Riser

"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."

The example was based on a Civil Servant, not a Public Sector worker or a Teacher. Every person in every department needs to check their own entitlements.

I am having difficulty posting links, so I'll post a couple of single point replies.

 

[ppmmeath]

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

No, in general they apply to the Public Sector too, I will post the link when I can.


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.

But the two pensions are now funded differently, the post 95 worker now receives a higher salary to reflect the higher PRSI Class A stamp that he now pays, this provides SW entitlements and is a contributory stamp to the State Pension.

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.

If you lived and worked abroad for 20 years then when applying for the state pension, you provide those details and under the bi-lateral SW agreement Ireland has with numerous other countries, your "stamps" (Or their version of it) is taken into account.

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.

Could you clarify this for me?

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?


If the post 95 ps servant retires at 60 (with full service) then he is entitled to the same benefits that the pre 95er, who also retired at 60, received. I think that what is adding to the confusion is the "OAP" - it's called the "State pension". It is a pension that is for "older and retired" people.


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.

They don't but it becomes their business if you want a full contributory state pension along with your occupational pension, so that you get the same entitlement as the pre 95 person.

 

[ppmmeath]

"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."

This is exactly what I have been saying. A post 95 worker retiring under the new changes, must receive the same pension as if it was calculated using the method for pre 1995 officers.

It is now calculated on the basis of PRSI contributions. If, for reasons out of his control, such as unemployment or illness, the person could not make the appropriate contributions, he may apply for the supplementary pension to equalise his state pension benefit, which is payable to him so that his pension is the very same as a pre 95 officer.

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.

They are not looking to see what you were living on, they are looking for your PRSI contributions for that period so that they can be applied to your PRSI stamps, which entitle you to the full contributory state pension.

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!

Then he chose not to work and contribute to his PRSI and he chose not to buy the stamps.

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.

Are we still talking about the PS worker?

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.

You can only buy a certain amount of contributions (120 I think, I will have to check), this would be classed as early retirement and your "benefits" would be preserved, meaning that when the retirement age came upon you, you would then be entitled to those benefits including the "state" (not the OAP) pension, if you have enough PRSI contributions, then you are entitled to the "benefits".

But i will put the same disclaimer here, check out all your entitlements.

 

[ppmmeath]

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.

No, your eligibility for the State pension is calculated on your PRSI contributions in your entire working career, private and/or Public Sector. The supplementary pension is only applicable at retirement age from the civil service, if at that stage you do not have enough PRSI contributions and this was due to illness or unemployment, then you are paid this along with your occupational pension.


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?

No he's not. If he retires at 60 (Given that this is the retirement age), then he receives his occupational pension integrated with the state pension on retirement. He is not expected to apply for UB. His entitlement is the very same as the pre 95er, what changed was how this was funded.

This is why I said that the supplementary pension is not used to bridge the gap from retirement to 67 (OAP), it is used to bridge the gap if you don't have enough PRSI contributions to receive the maximum state pension, which should give him the same pension on retirement as the pre 95er.

@Japster:

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.

What is your retirement 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.

I did the same but came up with a different amount.

Pension was 25k and lump sum 76k, however, widows and orphans was 12k

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.

Pension 27k, lump sum 76k, however widows and orphans was 10k.


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?

No. There is no difference, the difference occurs if you do not have enough contributions for the €12173.59, the supplementary pension fills that gap if, for example your contributions only gave you 6k - the supplementary pension would be applied to the SW element.


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.

No. You receive your occupational pension, which is made up of your state pension (paid through PRSI contributions) and the rest paid by the employer to give you the very same as your pre - 95 colleague.


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.

The combination is the same for 30 years, it's just spread out differently.


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!

No - you will have the very same overall pension as your class D counterpart.

 

[ppmmeath]

You're dead right - the class A employee should be no worse off in this case so no supplementary pension would arise. It's important that you mentioned about the conditions for full COAP as a lot of people wouldn't be aware of this and if I retire early, as I am most likely to do, I would definitely have to go about making sure that I maintain my contribution record as it may mean a few extra bob come OAP age. I guess as time passes, and as more and more early retirees fall into the class A bracket, we'll learn a lot more about the whole ins and outs of the pension situation for these people.

That is the point, you should be no worse off then your counterpart who was employed pre 1995. You need to maintain your contribution record by claiming your benefits, signing on for a credit (if you have no entitlement to benefits) but you are still mistaken when you think you have to wait to "OAP" age, to be eligible for your benefits.

Even if you retire early, you are entitled to your benefits at the age you would have retired had you stayed in the service. If that is 60, then you receive your occupational and state (not OAP) pension integrated at that age to give you the very same pension as the pre 95er.

Again, your benefits did not change, merely how they were funded.


At what age are benefits payable?

a) Provided an officer has a minimum of 2 years' qualifying service, benefits are payable on retirement either at maximum retirement age of 65 (60 in the case of Prison Officers) or at any time after reaching age 60 (55 in the case of Prison Officers). Prison Officers may retire on reaching age 50 provided they have served for at least 30 years in the Prison Service. Benefits may be paid before those ages if the person is retiring on grounds of ill-health. Officers, who leave the civil service with preserved benefits, receive a pension and lump sum, on application, at age 60.

 

[The Ghoul]

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

No, in general they apply to the Public Sector too, I will post the link when I can.

No, in general they don't. As a serving post 95 pre 04 public (not civil) servant my salary scale is the same as that for someone in my grade recruited before 1995. On the other hand. when I have applied for civil service jobs there were two salary scales in the job spec - contributory and non contributory scales.

Public servants (eg HSE, local authorities, Institutes of Technology)

https://secretaryfinancialcontrolle...pendix-IV-Local-Gov-Superannuation-Scheme.pdf

Pre 95
personal pension contribution 5%

Post 95
personal pension contribution of 3½% of salary less twice the rate of OAP + 1½% of salary

Also
http://www.environ.ie/en/LocalGovernment/LocalGovernmentAdministration/Superannuation/

"LGSS is contributory on the part of employees. With effect from 1986, new entrants pay a contribution of 6.5% of pensionable pay. An adjustment to pensionable pay is made when calculating part of the contribution due by fully insured employees"

Even though this says local government it doesn't just apply to local government. The 6.5% includes the widows and orphans contribution. The adjustment to pensionable pay is the subtraction of twice the rate of the OAP as per the link from Sligo IT. The actual salary scales did not change post 1995.

Also teachers
https://www.education.ie/en/Educati...sions/FAQ-for-Teachers-in-Primary-Schools.pdf

"Each member of the Scheme must pay a contribution for the duration of his or her membership of the Scheme. The contribution comprises 5% of remuneration in the case of a member paying modified (or D rate) PRSI. Where a member is paying full (or A rate) PRSI and is in wholetime service, he or she will pay 3.5% of net remuneration plus 1.5% of remuneration"

[broken link removed]

"teachers who pay D rate PRSI pay 5% of remuneration towards their public service pension, while those paying the A rate pay 3.5% of net remuneration plus 1.5% of gross remuneration"

Civil servants

Pre 95
http://www.cspensions.gov.ie/faq1.pdf
"There is no personal contribution towards their own personal pension for officers who pay modified PRSI"

Post 95
http://www.cspensions.gov.ie/faq2.pdf
"Officers who are in the contributory scheme pay a personal contribution. These officers also pay Class A PRSI but their salary is higher (i.e. 20/19ths) than the standard salary. The personal contribution is 1½% of pensionable remuneration plus 3½ % of net pensionable remuneration"

I conclude from this that the reason why the post 95 civil service pay scales are higher than the pre 95 is not because of PRSI (although that changed at the same time and it could be implied from the above quotes that PRSI is the reason) but because of the change to the pension contribution. If the higher pay was to compensate for paying Class A PRSI then post 1995 HSE etc. employees should be on a higher payscale than pre 1995 - which they aren't - because the pre 95 people were already paying a personal pension contribution of 5% from 1986 or possibly earlier.

So - the argument that post 1995 people (civil and public) are being compensated with higher pay for paying PRSI doesn't hold up. Also, the higher salaries for post 95 civil servants is an accounting exercise, not a social insurance issue.

I think that this has no relevance to the supplementary pension.

As I said earlier in my scenario, a pre 95 and post 95 make the same life choices and have the same service so the issue of "fault" in terms of supplementary pension eligibility shouldn't arise. If the post 95er is "at fault" for doing what I proposed in my scenario while the pre 95er is not penalised for doing the exact same thing, then they are not being treated the same in terms of their employment. This is an employment/pension issue rather than a social insurance issue. Also, it is the responsibility of the employer to pay the supplementary pension.

The post 95 pays Class A while he is working in the public service. He doesn't expect a "full state pension" + an occupational pension - he expects that his total pension will be the same and paid at the same time as the pre 95 person's total pension. He does not particularly care if his pension is composed of state, occupational, supplemetary or a combination.

So if the state pension portion of his coordinated pension is not payable until age 67 and he retires at his min retirement age is 60 then he should receive a supplementary pension to bring his total pension to the same as that of the pre 95 person's total pension if the pre 95 retired at age 60.

 

[ppmmeath]

@The Ghoul

No, in general they don't.
As a serving post 95 pre 04 public (not civil) servant my salary scale is the same as that for someone in my grade recruited before 1995. On the other hand. when I have applied for civil service jobs there were two salary scales in the job spec - contributory and non contributory scales.

This says otherwise - but as I said, some departments and sections may differ. I was also referring to the Civil Service and have repeatedly said for people to check with their own departments, your initial query was in relation to the supplementary pension, I won't comment on your links, because these are clearly different then thee Civil Service, which is the post that I responded to.

http://www.welfare.ie/en/downloads/greenpaperchapter13.pdf

"13.16 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."
-------------------------

I conclude from this that the reason why the post 95 civil service pay scales are higher than the pre 95 is not because of PRSI (although that changed at the same time and it could be implied from the above quotes that PRSI is the reason) but because of the change to the pension contribution. If the higher pay was to compensate for paying Class A PRSI then post 1995 HSE etc. employees should be on a higher payscale than pre 1995 - which they aren't - because the pre 95 people were already paying a personal pension contribution of 5% from 1986 or possibly earlier.

So - the argument that post 1995 people (civil and public) are being compensated with higher pay for paying PRSI doesn't hold up. Also, the higher salaries for post 95 civil servants is an accounting exercise, not a social insurance issue.

It is not an argument:
http://www.cspensions.gov.ie/faq2.pdf

"3. How do I join the Superannuation Scheme? All officers over age 16 years of age who join the Civil Service in an Established capacity on or after 6 April 1995 are automatically included in the contributory Established Superannuation Scheme provided that they have the potential to give at least two years service on becoming Established Civil Servants; this is a condition of service.

4. Do I pay contributions for these benefits? Officers who are in the contributory scheme pay a personal contribution. These officers also pay Class A PRSI but their salary is higher (i.e. 20/19ths) than the standard salary."

I am trying to provide clarification, it is up to you if you want to take the contribution on board.

I think that this has no relevance to the supplementary pension.

Your PRSI contributions are very relevant to the supplementary pension.

As I said earlier in my scenario, a pre 95 and post 95 make the same life choices and have the same service so the issue of "fault" in terms of supplementary pension eligibility shouldn't arise.

Your PRSI contributions are what counts, not your life choices.

If the post 95er is "at fault" for doing what I proposed in my scenario while the pre 95er is not penalised for doing the exact same thing, then they are not being treated the same in terms of their employment.

The pre-95er has no SW entitlements because he was not paying a Class A stamp, he did not have to, because his employer funded his entire DB pension on completion of the required years of service.

This changed after 1995, the benefits did not change, but how they were funded changed and this was the PRSI contributions.

This is an employment/pension issue rather than a social insurance issue. Also, it is the responsibility of the employer to pay the supplementary pension.

It is a social insurance issue. It is not the responsibility of the employer, it is the department of SW who determine if you have enough contributions for the entitlement, they or the employer might pay it, but you only get it if you have the PRSI stamps.


The post 95 pays Class A while he is working in the public service. He doesn't expect a "full state pension" + an occupational pension he expects that his total pension will be the same and paid at the same time as the pre 95 person's total pension.

Ok, I will try this for the last time. He will get his total pension at the same time as the pre-95 persons total pension. But how it is funded has now changed.

The pre 95 person gets his entire pension, let's say 500 euro a week (example) from his employer.

The post 95 person is also entitled to 500 euro - but part of it is funded by the PRSI contributions to the State pension, which is say, 200 a week and the employer pays 300.

If the post 95 person has paid enough PRSI contributions then at 60, just like the pre 95 person, he will receive a total of 500 a week, just like the pre 95 person, except it comes from two different sources. One from the employer and one from the SW.

If a post 95 has not made enough PRSI contributions to be eligible for the 200 state pension, due to not being able to pay the appropriate contributions through unemployment or illness - and only has enough contributions for 100 Euro, then he gets the supplementary pension of another 100 a week - to bring him to 500 a week, which is the same as the pre 95 person.


He does not particularly care if his pension is composed of state, occupational, supplemetary or a combination.

But he has to have the required PRSI contributions.

So if the state pension portion of his coordinated pension is not payable until age 67 and he retires at his min retirement age is 60

I will try this again, for the last time. He is entitled to his state pension, which is not the "Old age pension", but a state retirement pension, at age 60 - exactly the same as the pre 95 person.


then he should receive a supplementary pension to bring his total pension to the same as that of the pre 95 person's total pension if the pre 95 retired at age 60.

I will try this again, for the last time. The supplementary pension is not to bridge the gap between the retirement age from 60 to 67 - it is to bridge the gap in the event that a person does not have enough PRSI contributions, to be eligible for the state pension, which is payable on his retirement at age 60 - just like the pre-95 person.

 

[ppmmeath]

Ok, last ditch attempt.

Two people join the prison service and they are both say, 30 years old.

One joins on the 5th of April 1995 (Officer A), the other on the 7th of April 1995 (Officer B).

One is now pre 1995 and the other post 1995.

They both do their 30 years service.

Officer A retires at 60 and is entitled to half pay and a lump sum at 60.

Officer B has the exact same entitlements.

The only difference is that a portion of his pension is now linked to his PRSI contributions.

If he has paid enough then he receives the same pension, at the very same time as Officer A.

If there is a shortfall in his contributions, due to illness or unemployment for example, then he receives the supplementary pension to bring him to the very same pension as Officer A.

 

[Early Riser]

Extract from Department of Environment Circular letter S.10/99 which gives effect to this legislation.
“In order to qualify for a supplementary pension, the pension in payment to the member or his/her spouse must be co-ordinated and must be, when taken together with any benefits’ payable by the Department of Social, Community and Family Affairs (DSCFA), less than the pension that would have been paid had the pension not been co-ordinated. In practice, staff retiring below the age at which Retirement Pension/Old Age Contributory Pension become payable, having paid full PRSI, will in most cases be entitled to the payment of unemployment Benefit following retirement and the payment of the supplementary pension will in most instances not become payable during this period. If a pensioner retired at age 60 and a Retirement Pension is payable at age 65 then any supplementary pension payable would cease at age 65 provided the combination of the pension under the Scheme and the Retirement Pension exceeds the value of the unco-ordinated pension.”
{This Circular was published on 12th November 1999}

In essence to qualify you must:
Be a Class A PRSI Contributor
Be age 60 (55 for those registered under Section 65 Mental Treatment Act 1945),
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 Welfare 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 jobseekers benefit (previously unemployment benefit). This will require you to apply but if you are retired and not actively seeking employment you must state that fact, in which case, job seekers benefit will most likely be declined.

(For full document please Google: PNA Entitlement to Supplementary Pension )


I hope this extract clarifies that supplementary pension is payable for public sector (Class A PRSI) who have a retirement age of 60 (55 for certain categories) provided they meet the conditions above. It is paid by the employer. It is only paid on application by the retiree, not automatically granted. The document is from 2010 - the retirement pension age has now risen to 66 and, I understand, will rise again to 67 in a number of years The disadvantage for the Class A retiree compared to the Class D person is, as The Ghoul has pointed out, that he or she cannot work while claiming the supplementary pension.

As previously pointed out, I am no an expert - but I do know retired public servants who have successfully claimed a supplementary pension to "bridge the gap" between 60 and State Pension age. When the State Pension kicked in the Supplementary ended.

Although the above document is from the PNA website the principles apply throughout the public service.

 

[japester]

Extract from Department of Environment Circular letter S.10/99 which gives effect to this legislation.
“In order to qualify for a supplementary pension, the pension in payment to the member or his/her spouse must be co-ordinated and must be, when taken together with any benefits’ payable by the Department of Social, Community and Family Affairs (DSCFA), less than the pension that would have been paid had the pension not been co-ordinated. In practice, staff retiring below the age at which Retirement Pension/Old Age Contributory Pension become payable, having paid full PRSI, will in most cases be entitled to the payment of unemployment Benefit following retirement and the payment of the supplementary pension will in most instances not become payable during this period. If a pensioner retired at age 60 and a Retirement Pension is payable at age 65 then any supplementary pension payable would cease at age 65 provided the combination of the pension under the Scheme and the Retirement Pension exceeds the value of the unco-ordinated pension.”
{This Circular was published on 12th November 1999}

In essence to qualify you must:
Be a Class A PRSI Contributor
Be age 60 (55 for those registered under Section 65 Mental Treatment Act 1945),
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 Welfare 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 jobseekers benefit (previously unemployment benefit). This will require you to apply but if you are retired and not actively seeking employment you must state that fact, in which case, job seekers benefit will most likely be declined.

(For full document please Google: PNA Entitlement to Supplementary Pension )


I hope this extract clarifies that supplementary pension is payable for public sector (Class A PRSI) who have a retirement age of 60 (55 for certain categories) provided they meet the conditions above. It is paid by the employer. It is only paid on application by the retiree, not automatically granted. The document is from 2010 - the retirement pension age has now risen to 66 and, I understand, will rise again to 67 in a number of years The disadvantage for the Class A retiree compared to the Class D person is, as The Ghoul has pointed out, that he or she cannot work while claiming the supplementary pension.

As previously pointed out, I am no an expert - but I do know retired public servants who have successfully claimed a supplementary pension to "bridge the gap" between 60 and State Pension age. When the State Pension kicked in the Supplementary ended.

Although the above document is from the PNA website the principles apply throughout the public service.

Thanks very much for that contribution Early Riser - it will certainly serve to put the minds of many Class A public sector employees at ease. This thread has really been useful and informative.

 

[Gordon Gekko]

Can I ask a related but far simpler question?

Based on current rules, if someone retires in 2040 at age 60 with 40 years service and a salary of €100k, am I right in saying that:

- He receives a pension of €50k immediately?

- It is only the makeup of that pension that changes over time...€38k work related plus €12k supplementary until age 68, and the €38k work related plus €12k State thereafter?

- He is free to do what he likes after he retires (i.e. he could find another job, leave Ireland, etc).

Many thanks.

 

[Early Riser]

Can I ask a related but far simpler question?

Based on current rules, if someone retires in 2040 at age 60 with 40 years service and a salary of €100k, am I right in saying that:

- He receives a pension of €50k immediately?

- It is only the makeup of that pension that changes over time...€38k work related plus €12k supplementary until age 68, and the €38k work related plus €12k State thereafter?

- He is free to do what he likes after he retires (i.e. he could find another job, leave Ireland, etc).

Many thanks.

Presuming this person joined the public service in 2000, is a Class A PRSI contributor and is a member of a scheme which allows normal retirement at 60 the the answer is no, not necessarily. The person would have to meet all the other conditions for a Supplementary Pension ,ie,

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 Welfare 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 jobseekers benefit (previously unemployment benefit). This will require you to apply but if you are retired and not actively seeking employment you must state that fact, in which case, job seekers benefit will most likely be declined.

So clearly he/she could not find another job.Under current pension rules, he/she could not engage in gainful employment without forfeiting the Supplementary Pension, ie, €12k in this example, up until the State pension kicks in.

I am not sure about living abroad.

In this particular example, with full 40 years service, there would not seem to be any possible financial advantage in continuing to top up the PRSI record with credits.With less than full service there probably would be an advantage.

In the event that the person in this specific example didn't have enough contributions for the full State Pension at 68 I imagine that there would continue to be a Supplementary to top the total pension to the €50k level.

Of course, who knows what rules will actually apply then ?

 

[Gordon Gekko]

Thank you for your reply.

The effective prohibition on working doesn't make a lot of sense, especially in areas where there is chronic understaffing and a shortage of experienced personnel. There's a disincentive to working somewhere else after age 60.

 

[ppmmeath]

Early riser, could you please read the circulars that you are linking:

[broken link removed]


"Extract from Department of Environment Circular letter S.10/99 which gives effect to this legislation.
“In order to qualify for a supplementary pension, the pension in payment to the member or his/her spouse must be co-ordinated and must be, when taken together with any benefits’ payable by the Department of Social, Community and Family Affairs (DSCFA), less than the pension that would have been paid had the pension not been co-ordinated.

Please read it carefully. To qualify for a supplementary pension, the pension payable to the member (post 1995) must be co-ordinated and taken together with any benefits payable by the SW and be LESS than the pension that would have been payable under the old rules - pre 1995.

The post 95 person must have the same pension as the pre 95 person. That is what the legislation provided for. If his pension is LESS because of a shortfall in PRSI contributions, then the legislation provides for a "supplementary pension" to supplement the PRSI part of the pension to bring it up to the very same pension as if it wasn't integrated - just like the pre 1995 worker.


Gekko is almost correct here:

"Based on current rules, if someone retires in 2040 at age 60 with 40 years service and a salary of €100k, am I right in saying that:

- He receives a pension of €50k immediately?"

- It is only the makeup of that pension that changes over time...€38k work related plus €12k supplementary until age 68, and the €38k work related plus €12k State thereafter?"

The 38k is the occupational part of the pension and the 12k is his "state pension" (Based on PRSI contributions) (which changes to OAP at 68). The supplementary pension issues arises if the person did not make the relevant PRSI contributions through "no fault of their own" to be fully eligible for the state pension, through for example, unemployment or illness, where they were in receipt of benefits. The supplementary pension fills the PRSI contribution gap.


"I hope this extract clarifies that supplementary pension is payable for public sector (Class A PRSI) who have a retirement age of 60 (55 for certain categories) provided they meet the conditions above.

I'm sorry to contradict you early riser, it was for this reason that I joined this site, because of this misunderstanding. You are giving the wrong advice, despite having posted and linked the circulars and relevant information that pertains to this issue that confirms what I have tried to clarify you are repeatedly confusing the age where the "Old age pension" is payable and the retirement age and retirement benefits of a PS/CS worker.

A post 95 worker has the very same benefits as a pre 95 worker, you posted the problem that arose in an earlier post:

"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".

A post 95 worker, after completing his full service, should not be worse off then a pre 95 worker. The anomaly that arose related to a possible shortfall in PRSI contributions for the "state" pension part of the occupational pension.

"It is paid by the employer. It is only paid on application by the retiree, not automatically granted. The document is from 2010 - the retirement pension age has now risen to 66 and, I understand, will rise again to 67 in a number of years "

It is paid by the employer on confirmation from the Department of SW that the employee does not have enough PRSI contributions to qualify for the PRSI part of his occupational pension - leaving him at a disadvantage at (example) age 60, when his pre 1995 counterpart received his full 50% on retirement.

The post 1995 worker is to receive the very same pension at (say) age 60.


"The disadvantage for the Class A retiree compared to the Class D person is, as The Ghoul has pointed out, that he or she cannot work while claiming the supplementary pension."

There is no disadvantage for the Class A retiree because that is the "anomaly" that the legislation provided for above.


"Presuming this person joined the public service in 2000, is a Class A PRSI contributor and is a member of a scheme which allows normal retirement at 60 the the answer is no, not necessarily. The person would have to meet all the other conditions for a Supplementary Pension ,ie,"

If a person joined in 2000, worked 40 years and retired on his retirement age, has paid all his PRSI contributions, then he is entitled to the very same pension as a person who joined pre 95.

In this instance, he would get his 50k pension, part made up of his occupational pension and the other part his "state pension" to give him a total of 50k at age 60.

Both the pre and post 95 workers joined the Public/Civil service on a DB pension scheme that is payable on retirement.


"As previously pointed out, I am no an expert - but I do know retired public servants who have successfully claimed a supplementary pension to "bridge the gap" between 60 and State Pension age. When the State Pension kicked in the Supplementary ended."

Early riser, there is no gap for a person retiring on full pension at 60.


"So clearly he/she could not find another job.Under current pension rules, he/she could not engage in gainful employment without forfeiting the Supplementary Pension, ie, €12k in this example, up until the State pension kicks in."

Early riser - you are again confusing the "state pension" with the "OAP" pension. The "state pension" is payable to Gordon Gekko on his retirement at 60, that is the PRSI part of the pension and the occupational pension after being integrated - to give him his 50k pension at 60.

Using Gordon Gekko's example here:

"Based on current rules, if someone retires in 2040 at age 60 with 40 years service and a salary of €100k, am I right in saying that:

- He receives a pension of €50k immediately?

- It is only the makeup of that pension that changes over time...€38k work related plus €12k supplementary until age 68, and the €38k work related plus €12k State thereafter?

- He is free to do what he likes after he retires (i.e. he could find another job, leave Ireland, etc)."


"Presuming this person joined the public service in 2000, is a Class A PRSI contributor and is a member of a scheme which allows normal retirement at 60 the the answer is no, not necessarily. The person would have to meet all the other conditions for a Supplementary Pension ,ie,"

You are saying that a PS/CS worker, who has completed his full service and has retired at the correct retirement age is not entitled to the very same pension as a pre 1995 worker - that is incorrect advice Early riser.

You are again confusing the "OAP" with the retirement pension of a PS/CS worker who is entitled to the very same benefits as his pre 95 counterpart.

This below:

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 Welfare 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 jobseekers benefit (previously unemployment benefit). This will require you to apply but if you are retired and not actively seeking employment you must state that fact, in which case, job seekers benefit will most likely be declined.

Is where the post 1995 worker has not paid enough PRSI contributions to be eligible for the "state" part of the pension, must provide proof to their employer and this is where the supplementary pension kicks in, it is to supplement the PRSI part of the pension to bring the post 1995 worker up to his full 50% pension, which is the very same as the pre 1995 worker and is payable at 60.

The employer pays it because the employee does not have enough PRSI contributions paid to be eligible for the PRSI part of their "occupational pension".

The employee must prove to their employer, by way of the form above, that they have no entitlement to the "state pension", when the SW confirm that this is the case, then the employer pays the supplementary pension to bridge the gap for the shortfall in PRSI contributions.


"but I do know retired public servants who have successfully claimed a supplementary pension to "bridge the gap" between 60 and State Pension age. When the State Pension kicked in the Supplementary ended."

I really hate contradicting people and I didn't join the site to do this early riser. I have no doubt that this is the case, indeed, I am also aware workers that received the supplementary pension.

In those cases the member retired due to ill health, they were post 1995 and the same principle applied. They were entitled to the occupational part of their pension "integrated" with their SW entitlements, in this case a disability/invalidity payment.

In those cases, because they were post 1995, they were not eligible for the full SW part of their pension (Illness/disability), because they didn't have the required PRSI contributions.

On retirement (IHR) they received their pension, part occupational (reckonable service) and the PRSI part of the pension - because they did not have all the PRSI stamps and "through no fault of their own" (illness) could not continue working and contributing. In those cases they were entitled to the supplementary pension, see here:

"17. What benefits are payable if I have to retire early because of illhealth? If an officer has to retire before age 60 (55 in the case of Prison Officers or 65 in the case of “new entrants” who are not Prison Officers) because of permanent ill-health, pension and lump sum are paid immediately at retirement if the officer has more than 5 years reckonable service. The benefits are based on actual service up to the last day of paid service plus an additional period of notional service, plus, where appropriate, extra years of service, known as ill-health added years. An addition of 6 and 2/3rds years is fairly common. The officer may also qualify for Social Welfare Disability Benefit and/or supplementary pension depending on the amount of Social Welfare benefit actually received."

The maximum disability rate of pay is 193. 50 per week. When these people reach 67 they will then revert to the "OAP" and that rate is 233.30

The supplementary pension in these cases, bridged the gap from the shortfall in PRSI contributions so that they member could receive the full 193.50 per week (Combined with their reckonable service and the ill health added years). When they reach "OAP" age, they receive that rate.


Early riser - your "starting point" is incorrect.

A PS/CS worker who joined after 1995 has the very same benefits/entitlements as a pre 1995 worker, you are posting the correct links, but you are not reading them correctly because you are falsely assuming that if a PS/CS worker retires from the job before the "OAP" pension is payable, they they have to fill that gap - in some cases for 7 years.

That is not the case.

The OAP has nothing to do with the PS/CS worker, who has completed their full service. They are entitled to their Occupational Retirement Pension on retirement.

That pension is the very same as the pension that the pre 1995 worker received. A post 1995 worker is to be treated the very same as if their pensions were not integrated (i.e funded differently), just like their pre 1995 counterpart.

 

[ppmmeath]

Thank you for your reply.

The effective prohibition on working doesn't make a lot of sense, especially in areas where there is chronic understaffing and a shortage of experienced personnel. There's a disincentive to working somewhere else after age 60.

Exactly Gordon. Early Risers interpretation is that if you work your 40 years and retire at retirement age, then you will only receive the occupational part of your pension - and not the state pension part that is made up of your PRSI contributions.

He is incorrectly assuming that the eligibility age for the "state" part of the pension (The PRSI part), is that you must be 67.

He is incorrectly assuming that the "supplementary" pension is to bridge the age gap between 60 years of age and 67 years of age. (When entitlement for OAP kicks in).

This is incorrect, you are eligible under the terms of your PS/CS scheme, where your pension entitlements kick in at the relevant age.

If you complete your service of say, 40 years, if you the full PRSI contributions, then you receive the very same pension as your pre -1995 counterpart who also retired at 60 on completing their 40 years.

 

[Early Riser]

I really hate contradicting people and I didn't join the site to do this early riser. I have no doubt that this is the case, indeed, I am also aware workers that received the supplementary pension.

In those cases the member retired due to ill health, they were post 1995 and the same principle applied. They were entitled to the occupational part of their pension "integrated" with their SW entitlements, in this case a disability/invalidity payment.

In those cases, because they were post 1995, they were not eligible for the full SW part of their pension (Illness/disability), because they didn't have the required PRSI contributions.

Hi ppmmeath.

Your point here refers to retiring on the grounds of ill-health, and is well taken. There are specific rules relating to this. A person retiring on such grounds needs to apply for the relevant Social Welfare payment (Illness/Invalidity etc) and if they do not qualify for any of these, through no fault of their own (ie lacking sufficient PRSI contributions), they should receive the relevant Supplementary Pension.

I did not refer to, nor consider, the matter of retirement on health grounds in any of my postings. Thank you for pointing it out.

For a member taking normal retirement at 60, or taking actuarially reduced early retirement, the only Social Welfare payment that is likely to be relevant to their situation is Jobseeker's Benefit. That is until they reach the relevant age for the State Pension. The rules for these benefits are set by the Dept of Social Welfare. If the retiree does not meet these requirements he/she may be eligible for a Supplementary Pension provided he she meets the requirements that I have quoted elsewhere, eg, at the opening of Post 52.

Early riser, could you please read the circulars that you are linking:

I can assure you that I have read these circulars - and several more that I have not referred to here. I have taken account of your critique but I stand by the interpretation I have given in my postings in relation to normal retirement for the relevant Class A public servants. The thread is titled "Bridging the gap between 60 and OAP" and this is what I have posted on. You obviously have another interpretation and I am not attempting to change your mind on this. Readers should read the relevant documentation on their own schemes and,of course, as you have previously recommended, seek informed advice.

 

[ppmmeath]

Hi ppmmeath.

Your point here refers to retiring on the grounds of ill-health, and is well taken. There are specific rules relating to this. A person retiring on such grounds needs to apply for the relevant Social Welfare payment (Illness/Invalidity etc) and if they do not qualify for any of these, through no fault of their own (ie lacking sufficient PRSI contributions), they should receive the relevant Supplementary Pension.

Early Riser, the very same principle applies to those on completion of their full service if they do not qualify for the PRSI part of their pension. In this example - illness/invalidity, the supplementary pension is used to bridge the lack of PRSI contributions, in the very same way that a post 1995 workers pension is funded - it's the same supplementary pension and is for the very same thing

For a member taking normal retirement at 60, or taking actuarially reduced early retirement:

Let's just remain on the member taking up normal retirement at age 60.

the only Social Welfare payment that is likely to be relevant to their situation is Jobseeker's Benefit.

No, a Class A PRSI stamp payer is entitled to the following benefits, please link here:

http://www.welfare.ie/en/Pages/What-benefits-may-I-get-under-each-PRSI-class.aspx

Adoptive Benefit
Carer's Benefit
Illness Benefit
Health and Safety Benefit
Invalidity Pension
Maternity Benefit
Occupational Injuries Benefit
State Pension (Contributory) (This is what is integrated with the occupational pension, except it is payable immediately on retirement from the PS/CS to bring the member to full 50% - just like his pre 1995 counterpart.)
Guardian's Payment
Treatment Benefit
Jobseeker's Benefit
Widow's, Widower's or Surviving Civil Partner's Pension (Contributory)


"That is until they reach the relevant age for the State Pension. "

This is the confusion Early Riser - they qualify for the "State" pension on retirement from the PS/CS. This is the "integrated" part, a person who has completed their full service is entitled to their pension of say 50% on the day of their retirement. If that is 60, then they are entitled to their 50% pension, for post 1995, part of that is made up of PRSI contributions to the state pension.

A PS/CS benefits on retirement at 60 did not change after 1995 - merely how it was funded.

"The rules for these benefits are set by the Dept of Social Welfare. If the retiree does not meet these requirements he/she may be eligible for a Supplementary Pension provided he she meets the requirements that I have quoted elsewhere, eg, at the opening of Post 52."

For non PS/CS workers who have contributed to the PRSI contributory for the "OAP" yes. But PS/CS workers are in a pension scheme that entitles them to 50% of their salary on retirement after completing their full service.

I can assure you that I have read these circulars - and several more that I have not referred to here.

You may have read them, but you are misinterpreting them.

Please read the links that you provided:


"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 difference arises because of the change in how the pension is funded, after 1995 part of the pension was funded by way of Class A PRSI contributions.

"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."

The problem is with the entitlement to SW - or PRSI contributions.

"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".

Here you are clearly advised that a post 1995 worker, whose pension is now part-funded by the SW (PRSI contributions), should be no worse off than the pre 1995 worker if calculated in the same way as a pre-1995 worker, the calculation model used then was 50% of reckonable service, now it is reckonable service PLUS SW entitlement to the "state pension" (Not OAP).

Then you post this would absolutely shows that the supplementary pension is not to bridge the gap in years from age 60 to age 67:

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."

You posted this early riser, not me. The supplementary pension comprises the difference between the actual pension paid to the post 1995 - which includes the SW (dictated by the PRSI contributions) and the amount that would have been awarded if the pension was calculated the old way and that was on reckonable service. Post 1995 pensions are calculated to integrate the pension with the PRSI portion - the state pension.


I have taken account of your critique but I stand by the interpretation I have given in my postings in relation to normal retirement for the relevant Class A public servants.

Your interpretation is incorrect because you are ignoring the pension entitlement of the PS workers and that entitlement is for 50% of their pension after completing their service.

"The thread is titled "Bridging the gap between 60 and OAP" and this is what I have posted on."

Which is why I joined the site, because there is no gap to bridge between a PS/CS worker retiring after completing full service at 60 and entitlement to the OAP.

Post 1995 workers are entitled to the very same pension entitlements as their pre-1995 counterparts who, after completing their full service retired at 60 on a 50% pension.

The post 1995 employee is entitled to the very same 50% pension, however, it is funded differently - part of it is made up by PRSI contributions.

"You obviously have another interpretation and I am not attempting to change your mind on this. Readers should read the relevant documentation on their own schemes and,of course, as you have previously recommended, seek informed advice."

I am asking you to take a step back for a moment.

I am asking you to take into account the quotes and circulars that you posted. You stated:

"It is to equalize the pension position of Class A and Class D public servants."

The pension position of a Class D PS worker was that after completing their full service and on retiring at, say 60, they received their full pension entitlements at that age, in their case it was 50% of their salary.

That is what the Class A PS worker is entitled to. On retirement the post 1995's pension is to be "equal" to the pension that he would have been awarded if it was calculated under the old method, that method was reckonable years service.

The new method "integrates" the State pension.

The Class D PS worker was never entitled to the "Old age pension" or a "State pension" because their stamp did not cover this - please see the link above regarding entitlements.

When they changed how the pension was funded, all post 1995 paid a contributory Class A stamp which entitled them to, not the "OAP", but to a "state pension".

Their pension is calculated using their entitlement to say 12k.

If a PS worker completes their full service then there can be no shortfall of the "occupational" part of the pension, because the criteria is that they complete the full service.

On integrating the PRSI part of their pension, the 12k "State pension", a shortfall can arise if the Post 1995 person didn't have enough PRSI contributions. This is the supplementary pension that is applied to give the post 1995 worker the same 50% pension that he is entitled to after completing his full service, it is payable at 60 - the same age.