Bridging the gap between 60 and oap


What you outlined here makes absolute sense of course and I'd hope that is the way things would proceed when my time comes. It would be much more straightforward than having to go to the trouble of signing on for JSB for 9 months and then having to apply for a supplementary pension. Fingers crossed anyway! I guess we'll find out what the story is in due course as more and more class A post 95ers avail of retirement between 60 and OAP age.
 
Hi Ppmmeath. My normal retirement age would be 65 and I am employed by the Dept of Education current salary 32800 with possibly 3 or 4 more increment on the scale.. I never received any booklet from my current employer on joining. i will follow this up with them now. I have received my record from social welfare but they have not given me any indication of my entitlement. Maybe they will closer to retirement age. However as I feel it is important to try to plan for my pension it would be good to know whether i will just be eligible for the minimum pension or a full pension. The reason I am unsure about the homemakers credits is because I had the pension from original employment and unsure whether that is considered earnings which if it did would always bring me above the 38 euro per week. I will indeed check this out with citizens advice. I have already paid 520 contributions so do meet the minimum requirement. However I recently heard that one will only be allowed a maximum of ten years credits. If my homemakers credits were allowable this would be 8 years in my case, then even if I signed fro credits from age 63 they probably would not all count.
Great to get some information on the co ordinated pension because nobody seems to be able to fill me in on it and the Dept of Education are useless when it comes to any of this stuff. They dont even issue P60s until mid March.
many thanks to all who replied and I will definetly start trying to seek further information.
 

For the record, I am also a post 95er and in my case I may have to take IHR, this is how this entire situation came about. In looking at my options and in looking for information, many of my colleagues were interpreting the issue just like Early Riser, however, I discussed this with my department and they couldn't understand why staff were of this belief. Early Riser has identified the source and I will be contacting my department in relation to this.

In trying to sort out my own matter, the comparison used is not a comparison with what my income might have been on reaching the OAP retirement "age" eligibility, they are looking at the entitlement that I would have received on my retirement at age 60.

I would have received a total of 50% of my reckonable salary at age 60, combined with a State pension.

In my case, I will have added years to my service, but I may have a shortfall to receive a SW benefit.

I will receive extra added years to my service to boost the occupational side of my pension, I may not have enough PRSI contributions, because I have been ill and in receipt of a SW payment (which was paid directly to my employer, when I had the privilege of paid sick leave).

Through "no fault of my own" I may not have the required PRSI contributions left and I may have to apply for the supplementary pension.

If I don't qualify then I submit the confirmation to my employer.

They will then calculate my reckonable and added on years (whatever they may be) and pay me the supplementary pension.

But the end payment must be the very same as the pension that a pre 1995, in my very same circumstances, would receive.

Early Riser posted this link earlier:

[broken link removed]

Please read the entire link, this refers to a supplementary pension to a pensioner whose superannuation is coordinated with the OAP.

Please scroll down to example 2:

"An employee retires on normal grounds at age 60 on a pension of £40 a week. He does not qualify for any benefit from the DSCFA until his 65th birthday when he will become entitled to a Retirement Pension (The Maximum rate of a Retirement and Contributory Old Age pension is the same. If his pension had not been coordinated it would have amounted to £55 a week.

In this case the the employee is entitled to a supplementary pension of £15 a week. This is to be increased with pension increases in the normal way. The supplementary pension will cease at 65 on becoming eligible to a Retirement Pension from the DSCFA".

Early riser is correct when he says that the employer pays it, but on coming into eligibility for the OAP, they cease paying it and the SW then pay it.

OAP as now risen above 65, but the principle is the very same, the supplementary pension only applies if you are not eligible for the SW element of the pension but your final pension should be the same pension as outlined above, as if your pension wasn't coordinated with the OAP.

This is the explanation below and above is how they apply it.

“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."

The example clarifies the section above. If, because you are not entitled to any benefits from the SW and your "combined" pension comes up short because of this, then you receive the supplementary pension to bring it to the same pension as the pre 1995er.

"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. "

This does not mean that if staff retire below the age of the OAP, it means if you (for example) decide to retire at 58, before your pension entitlements are payable at 60 and are fully insured and have paid enough PRSI contributions, then at 58 you would be entitled to Unemployment benefit, if you fully insured and have paid enough PRSI - then there is no supplementary pension.

If you were to retire at 58, you would not be entitled to your pension so you would have to sign on to fill the gap from 58 to 60.
 



Ok Meathlady, I think I have identified your problem:

This is from the link:

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).


Now I am reading on from the link and it says here:

3. Average number of contributions per year
You must meet the average condition. This is probably the most complex aspect of qualifying for a State Pension (Contributory).

Normal average rule
The normal average rule states that you must have a yearly average of at least 10 appropriate contributions paid or credited from the year you first entered insurance or from 1953, whichever is later to the end of the tax year before you reach pension age (66). An average of 10 entitles you to a minimum pension; you need an average of 48 to get the maximum pension.

This is very confusing to me I have to say. 10 a year on average only gets you the minimum of about €95 per week.

Now, here we revert back to your "entitlements" in other words, the "promise" of the pension when you joined the PS in 2006.

In your case, if you are not entitled to a full contributory state pension because of your shortfall in PRSI contributions, and if this is through no fault of your own (this is where it might get complicated), then you may be eligible for the supplementary pension.

It is vital that you clarify this as soon as possible because while you appear to have the "total" PRSI contributions, you don't have the "average".

Now it could well be the case, that because you took an offer of voluntary redundancy from the local authority - to look after your children, and if you don't qualify for the homemakers credits because of the occupational pension you received (more than 38 per week) on doing that, that this could (maybe) be considered a "cause outside your control".

You are now 59, your retirement is 6 years away, it may the case that you could make voluntary PRSI contributions (I am not entirely sure) to try to bridge the gap, if any, in your PRSI contributions.

It really isn't up to your employer, because every single persons PRSI contributions are different because of their employment history, so they will not be able to provide you with any definitive answers in your particular circumstances. They can only tell you what you you will be entitled to based on your years service.

If you are having difficulty getting the information from the DSW, then try these people:

[broken link removed]

We examine complaints from people who feel they have been unfairly treated by certain public bodies, for example, government departments, local authorities, the HSE and publicly funded third level education bodies.

We provide a free public service which is open and accountable. Our job is to examine complaints in a fair and impartial way.


It is my personal belief that the SW are not only obligated to inform you of your position, but also that you are entitled to know if there is a shortfall, so that if there is a way you can fill that gap, that you can do so now before it's too late.
 


Hi Japster - I am quite busy today and I hope to reply in more detail during the week. In the meantime, just to be sure that we are talking about the same things, I would like to check with you if these are the three pension elements that we are talking about :

Occupational Pension

Supplementary Pension

State Pension - Contributory (formerly known as the OAP) and currently payable from age 66
http://www.welfare.ie/en/Pages/State-Pension-Contributory.aspx.

I ask because you have referred in some of your posts to a "state pension" that is payable from 60 ,eg,
ppmmeath said:
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).
Click to expand...

Do you have any reference for this "state pension" as I am unfamiliar with it ? I would like to read up on it.

Anyway I hope to be back at greater length soon. But as a quick preview summary, I will be broadly reiterating and elaborating on the positions and interpretations I have already set out !
 
I will be broadly reiterating and elaborating on the positions and interpretations I have already set out !

That's fine. Although I would be obliged if you could comment on this section below, which is from the link that you provided. I have posted voluminous facts to support my position, facts that were extracted from links that both you and others provided, I think it is fair for me to ask you to comment on this below, so that I can fully understand your position. Thank you.

"An employee retires on normal grounds at age 60 on a pension of £40 a week. He does not qualify for any benefit from the DSCFA until his 65th birthday when he will become entitled to a Retirement Pension (The Maximum rate of a Retirement and Contributory Old Age pension is the same. If his pension had not been coordinated it would have amounted to £55 a week.

In this case the the employee is entitled to a supplementary pension of £15 a week. This is to be increased with pension increases in the normal way. The supplementary pension will cease at 65 on becoming eligible to a Retirement Pension from the DSCFA".

"Do you have any reference for this "state pension" as I am unfamiliar with it ? I would like to read up on it."

I already provided it:

Adoptive Benefit
Carer's Benefit
Illness Benefit
Health and Safety Benefit
Invalidity Pension
Maternity Benefit
Occupational Injuries Benefit
State Pension (Contributory)
Guardian's Payment
Treatment Benefit
Jobseeker's Benefit
Widow's, Widower's or Surviving Civil Partner's Pension (Contributory)

It is no longer called the OAP. It is for "Retired and older people" and now called the "State Pension".

Let me try to explain it this way.

You are treating PS/CS under the terms of the SW eligibility for an "Old Age Pension" (Now known as a State Pension because it is for both OAP's and Retired people), when in fact, they are members of a Defined Benefit Pension scheme that is coordinated with what was previously known as the OAP, but is now referred to as a the "State Pension". Their "OAP" pension, which they must have the relevant PRSI contributions to be "eligible" for, is actually brought forward, and is the state part of their pension.

You are being led by SW entitlements for non PS/CS employees, who are not members of a Defined Benefit Pension Scheme.

In effect, this is what you are doing.

(Remember firstly that both pre and post 1995 are to be treated equally.)

Both members are entitled to a DB pension at the end of their service - this is a lump sum and 50% of their reckonable salary. That is their entitlement.

The first thing you are doing in relation to a post 1995 worker - is deducting their "State Pension" because you believe that they are not eligible for it until they reach the OAP age.

The pre 1995 worker never had any entitlement to this, because he never paid Class A contributions, so in effect, you have created a gap for the post 1995 worker, that the pre 1995 worker could never have had.

You have put the post 1995 at an immediate disadvantage because you have reduced their pension "entitlement" by the amount of their state pension, that you believe is not payable until they reach OAP age.

To then fill the gap that did not exist until you created it, you posted this on post 52 and have presented it as the way to fill the gap, however:

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.

The conditions for a post 1995 PS/CS worker for payment of a supplementary pension is clearly outlined above. In order to qualify for this, their pension has to be co-ordinated with any benefits payable by the DSCFA - on doing this, if their pension is LESS then the pension that would have been paid without co-ordination, then they receive the supplementary pension.

With all due respect, you then ignored the eligibility and conditions above and posted the eligibility and conditions that do not apply to a PS/CS worker in a DB pension scheme:


"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."

Then you posted this:

"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."

The conditions a PS/CS must meet for the supplementary pension, are not the conditions from the SW, they are the conditions in the passage that you quoted.

As I said, your "starting" point is wrong. Both the pre 1995 and post 1995 have the very same entitlements.

The pre 1995 has to complete his service and he received the full 50% of his pension at age (example) 60.

The post 1995 has to complete his service and have made enough PRSI contributions for eligibility for the "state" pension part of his full 50% pension, which is also payable on his retirement at 60. Those are his eligibility requirements under the DB pension scheme.

The post 1995 begins with the very same entitlement to 50% - not 50% minus the state pension.

If there is a shortfall in his PRSI contributions, leaving him with LESS of a pension then he would have received if his pension was calculated in the same way as the pre 1995, then he receives the supplementary pension to make up that shortfall which insures that his pension is the very same amount as the pre 1995 and it is payable at the very same age.

The legislation which is referred to in the link you provided, refers to this anomaly that arose when calculating post 1995 pensions under the new rules.




 

Hi ppmmeath, I am very sorry to hear that you will need to take IHR. Again this information you have provided about your individual case will be of benefit to others who may unfortunately find themselves in the same position as yourself. The fact that you have discussed your situation at length with your department and that they are in line with the interpretation you have set forth is really great as it make things a lot less "messy" for many people on reaching 60. Also it is great to know that, even if an employee is short on the "average" number of PRSI contributions at 60, they will still be getting a decent chunk of the state pension part anyway and can just apply for the supplementary pension to get the balance. I couldn't comment on the position of Meath Lady at all as it is unbelievably complicated compared to my own situation but I hope it all works out well for her and it would be great it she could let us all know how it goes for her in due course as, again, I am sure there will be many others in her situation in the future.
 
 
Early Riser, your first link here, completely supports my position:

https://www.pna.ie/index.php?option...sion-circular&catid=51:latest-news&Itemid=110

What is the difference in calculation of a service pension for Class D and Class A PRSI contributors?
-Class D PRSI contributor retires with entitlement to full pension on pensionable pay of €50,000. Annual pension is €25,000
[i.e. €50,000 x 40 ÷ 80.]

Class D PRSI Contributor has no entitlement to State Pension (Transition) or to Contributory Old Age Pension.
- Class A Contributor retires on their 65th Birthday with entitlement to full pension on pensionable pay of €50,000. Their pension is coordinated i.e. double the maximum rate of contributory old age pension (C.O.A.P) is taken from pensionable pay before the calculations are made.
Pension therefore is €13000
[ i.e. €50,000 – €24,000 (double maximum rate of C.O.A.P at Jan '10) x 40 ÷ 80].

This annual pension of €13000 together with the State Pension (Transition) of €12000 (maximum rate the same rate as C.O.A.P) brings the total to €25000 exactly the same as that of the PRSI Class D employee.


As does your second link:

https://www.education.ie/en/Educati...ns/Supplementary-Pension-Explanatory-Note.pdf

"2 CO-ORDINATED PENSION 2.1 The purpose of co-ordination is to ensure that the combined amount of the occupational pension plus Social Welfare benefit approximates to the total amount of the non co-ordinated occupational pension. 2.2 Co-ordination refers to pension contributions and to benefits paid in respect of these contributions. The pension contribution payable is determined by the PRSI class. Those paying Class D PRSI make a higher contribution towards occupational pension than those on Class A. Conversely, those paying Class A PRSI pay a reduced pension contribution and pay a higher PRSI contribution given that they are providing for a state pension

As does your third link:
https://www.inmo.ie/Home/Index/7059/8610

Calculation of Class D and Class A contributions

  • "Class D PRSI contributor retires with entitlement to full pension on pensionable pay of €50,000. Annual pension is €25,000 [ie, €50,000 x 40 ÷ 80]. The Class D PRSI contributor has no entitlement to state pension (transition) or to contributory old age pension.
  • Class A PRSI contributor retires on their 65th birthday with entitlement to full pension on pensionable pay of €50,000. Their pension is co-ordinated, ie, double the maximum rate of contributory old age pension (COAP) is taken from pensionable pay before the calculations are made. Their pension therefore is €13,000 (ie, €50,000-€24,000 [double maximum rate of COAP at Jan 2010] x 40 ÷ 80). This annual pension of €13,000 together with the state pension (transition) of €12,000 (maximum rate the same rate as COAP) brings the total to €25,000, exactly the same as that of the Class D PRSI employee."

Your fourth link is the link that I quoted this from:

"An employee retires on normal grounds at age 60 on a pension of £40 a week. He does not qualify for any benefit from the DSCFA until his 65th birthday when he will become entitled to a Retirement Pension (The Maximum rate of a Retirement and Contributory Old Age pension is the same. If his pension had not been coordinated it would have amounted to £55 a week."

In this case the the employee is entitled to a supplementary pension of £15 a week. This is to be increased with pension increases in the normal way. The supplementary pension will cease at 65 on becoming eligible to a Retirement Pension from the DSCFA".

I did ask you to comment on this, considering that you are repeatedly posting the link and you haven't responded, it clearly explains when the supplementary pension is applicable, yet you still maintain:

"When I get a chance to reply further during the week I will outline my belief that the Occupational Pension is Coordinated (rather than integrated) with the state pension by way of the Supplementary Pension and how this actually operates, and hopefully include a number of relevant references."

http://www.pensionsauthority.ie/en/?locID=108&docID=-1

"In the Public sector, these schemes are usually referred to as “co-ordinated” schemes. The terms “integration” (which will be used throughout this booklet) and “co-ordination” mean basically the same thing.

An integrated scheme looks at the Old Age Contributory Pension as part of the total pension package promised to employees on retirement. One reason for this is that both employers and employees make substantial social insurance (PRSI) contributions and these, in turn, entitle scheme members to substantial Social Welfare benefits and this normally forms part of an employee’s pension."

"I understand that it is your interpretation and belief that the state pension is somehow "integrated" with the Occupational Pension at 60 but could you please give me a reference specifically stating this or describing how it happens ? I would like to read up on it."

The reference is in every link you posted and in every paragraph that I have extracted, how it happens is explained in every link you posted and in every paragraph that I have extracted from those links.

This is not my interpretation, it is based on the facts contained in the very links you have posted.

I can clearly go no further with you, my aim in joining was to clarify a misunderstanding that has arisen for some PS/CS who joined after 1995, who think that on retirement at either age 60 or in some cases 65, that they are not entitled to their full pension benefits as outlined in the DB scheme.

All of the information is there in front of you - if you choose to see it, you clearly choose not to, but I am happy that there are others on this site now, and in the future who will at the very least, make sure that their PRSI contributions are up to date and they can be a little more informed of their rights (especially regarding the supplementary pension should a shortfall in PRSI contributions arise).
 


Thank you Japster.
 
Hello again ppmmeath

Thank you for for getting back and for pointing out the line in the Pension Authority document. I will get back on this later in the week.

Before going any further can I state clearly that I have never queried (nor do have any doubts about) your totally benign motivation in contributing to the thread. If you perceive that I have done so, either directly or indirectly, then I fully apologise. I am also sorry to hear that you needed to take ill-health retirement. However, I should add that ill-health retirement has very specific conditions, guidelines and pension benefits attached to it, and is outside the scope of our discussions.

Getting back to what we had been discussing and the issue raised in the title to this thread (Bridging the gap between 60 and OAP) and with specific reference to Class A people taking retirement at 60 - or at any age up to State Contributory Pension - I would like to raise a number of queries with you based on your reply at post number 89.

The extract you included from my first link is very selective . the document refers to a person retiring at 65 (the then State Pension Age) and again not the subject of this thread. Would you care to comment on the following later extract, particularly in relation to you earlier insistence that Supplementary pension is only "to bridge the gap if you don't have enough PRSI contributions" and
"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."

https://www.pna.ie/index.php?option...sion-circular&catid=51:latest-news&Itemid=110


An Example of how this would work.


In the example earlier on
•The Class D Nurse retiring would get a pension of €25,000 from the employer.

•The Class A Nurse if retiring at age 60 would only get €13,000 from the employer

•This nurse should apply for a supplementary pension and provided that she/he is not in any other gainful employment, and has established that they have no entitlement to any social welfare benefit (or to a reduced level of benefit only) they have an entitlement to benefit from a supplementary pension from the employer.

In this instance, where the nurse has, say, no entitlement to any social welfare benefit the supplementary pension will be €12000.
(The difference between what they would have received in pension from the employer had co-ordination not applied €25,000 and the pension that they are actually in receipt of €13000 from the employer)


Will supplementary pension cease at age 65?

•Supplementary Pension will cease at age 65 for most persons as they will qualify for a State Pension (Transition) and subsequently Contributory Old Age Pension from age 66.


You appear to be been similarly selective in relation to the second link. Do you have any observations on the following extract :

https://www.education.ie/en/Educati...ns/Supplementary-Pension-Explanatory-Note.pdf

3 SUPPLEMENTARY PENSION
3.1 Coordinated Pension is calculated by reference to pensionable remuneration less 3 1/3 times the maximum personal rate of State Pension (Contributory), (SPC), currently €40,056.83.
3.2 The eligible age for Social Welfare State Pension (Contributory) is 66. If you were 65 before 1 January 2014, you may be eligible for State Pension (Transition). (see welfare.ie for changes to the Transition Pension with effect from 1 January 2014)
3.3 Retirees may be eligible for Jobseekers Benefit in advance of reaching the eligible age for State Pension.
3.4 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. In the case of Cost Neutral Retirement, Supplementary Pension is not payable before age 60, when the above criteria apply – see Circular Pen 07/05 - SI 434 of 2009 and SI 435 of 2009 Article 60 (3)
3.5 Supplementary pension may also be payable, on application, after the eligible age for State pension (Transition) or State Pension (Contributory);
o where the retiree is not qualified for State Pension, supplementary pension may continue.
o where the rate of State Pension payable is less than the rate of supplementary pension, a reduced rate of supplementary pension may be payable to make up the shortfall.
3.6 Supplementary pension may be paid where the retiree:
(a) is not employed in any capacity which involves the payment of a PRSI contribution (including self employment), and
(b) due to circumstances outside his/her control, fails to qualify for the following Social Welfare benefits or qualifies for such benefits at less than the maximum personal rate:
o Jobseeker’s Benefit
o Illness Benefit
o Invalidity Pension
o State Pension (Transition)
o State Pension (Contributory)
3.7 Supplementary Pension is calculated, for each year of service, as 1/200th of such Final Annual Salary as does not exceed the threshold of €40,056.83, together with (where appropriate) 1/80th of such Final Annual Salary as does exceed the threshold.
4 DISQUALIFICATION FROM RECEIPT OF SUPPLEMENTARY PENSION
It is important to note that the Department of Education & Skills will NOT pay Supplementary Pension if you fail to claim one of the benefits to which you are entitled.

In relation to the fourth link, you ask me to comment on this passage :

[broken link removed]


"An employee retires on normal grounds at age 60 on a pension of £40 a week. He does not qualify for any benefit from the DSCFA until his 65th birthday when he will become entitled to a Retirement Pension (The Maximum rate of a Retirement and Contributory Old Age pension is the same. If his pension had not been coordinated it would have amounted to £55 a week."

In this case the the employee is entitled to a supplementary pension of £15 a week. This is to be increased with pension increases in the normal way. The supplementary pension will cease at 65 on becoming eligible to a Retirement Pension from the DSCFA .



I will comment but in the context of the whole document and ,in particular, in the context of Paragraphs 3 and 4. The document, taken together with the above documents, describes and illustrates that the purpose of the Supplementary Pension is to "bridge the gap" between age 60 and Contributory (Old Age) pension age for a coordinated pension scheme member who does not otherwise qualify for a Social Welfare Benefit, ie, as laid out in in Paragraph 3.6 in the second document above. The amount of the Supplementary payable is the amount of the difference beween the two pension calculation. Before being granted it, the Class A retiree must claim any benefits to which he might be entitled from the Dept of Social Welfare and show that he has been turned down. It doesn't specify the reasons for being turned down. The likely exception for a Class A retiree is Jobseeker's Benefit for which he/she may be eligible.

Once he/she reaches the age for the Contributory (Old Age/State) pension he/she must apply for it and the Supplementary pension will cease. The only exception is if the level of State Pension granted is less than the level of the Supplementary - in which case the difference will continue to be paid. The level of State Pension granted might be higher than the Supplementary, in which case their is no penalty for the pensioner. This can arise only when the retiree has less than full service but has a substantial better PRSI contribution record,eg, form work in the private sector or from Credits. Hence it can often be beneficial for the retiree to keep up signing for Credits.

Please note also that the retiree will not be eligible for the Supplementary if employed in any productive capacity - Condition 3.6a in the second link above. I know your protests that this can't be so because it disadvantages the retiree relative to the Class D pensioner. Yes it does disadvantage them and many Class A employees/retirees express disgruntlement about it. I think I can hear your protests already but that enough on this point for now - I will come back to it in the context of Defined Benefit Schemes later in the week (hopefully).

I am going to finish here for today but before I go you might also be interested in the following link to an Application Form for the Supplementary pension in the Dept of Ed. I think it further illuminates the points above.

http://www.education.ie/en/Educatio...ensions/Supplementary-Pension-Form-Supp-1.pdf





[broken link removed]
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Thanks for that contribution Early Riser - the plot thickens as they say! I fear from your final link above that, in the education sector at least, supplementary pension appears to work in the way you outlined it does and is very messy for the class A post 95er who retires before OAP age.

You mentioned also that the class A person could "keep signing for credits" in order to obtain possibly more from the OAP than what was received from the supplementary pension. I just checked out citizensinformation this minute in relation to signing on for credits and it says:

Credits during unemployment
You get credits automatically if you are fully unemployed and getting Jobseeker's Benefit. You can continue to get credits if you have used up your entitlement to Jobseeker's Benefit and qualify for Jobseeker's Allowance.

You do not automatically get credits if you are getting Jobseeker's Allowance. You must have paid or credited PRSI contributions in either of the last two tax years to get credits with Jobseeker's Allowance.

You can sign on for credits, if you are not entitled to a social welfare payment or you are a qualified adult on your spouse's, civil partner's or cohabitant's social welfare payment as long as you:

  • Are unemployed
  • Available and capable of work
  • Genuinely seeking work
  • Have paid or credited PRSI contributions in either of the last two tax years

So according to that you have to be available and capable of work and genuinely seeking work to sign on for credits but this is at odds with the supplementary pension which is only given provided that the retiree is not employed. So, in effect, you'd have to tell some white lies in order to sign on for credits while continuing to receive the supplementary pension! It's all so messy isn't it? Isn't being a class D employee so much easier!


 
HI PPmmeath This is very confusing to me I have to say. 10 a year on average only gets you the minimum of about €95 per week.
I actually think in the new pension arrangement in 2020 that the minimum pension will be 77.70 euro and 7.70 per year of contribution thereafter. Now I may not be correct about this but I recall reading somewhere that from 2020 the pension would be based on 30 years contribution and would not be yearly averaged.

It is vital that you clarify this as soon as possible because while you appear to have the "total" PRSI contributions, you don't have the "average"
I reckon I have the average already for a minimum contribution. For instance if you commence work at lets say 18 and retire at 67 you would need 49 years contributions so 490 to qualify for minimum pension albeit that they say 520.

You are now 59, your retirement is 6 years away, it may the case that you could make voluntary PRSI contributions (I am not entirely sure) to try to bridge the gap, if any, in your PRSI contributions.[/QUOTE]

I am now almost 59. Do you mean if I retire at say 63 I should then look at paying voluntary contributions.

Japester Thanks for your good wishes and I will indeed update when I manage to find out more. I will be 59 later this year and think I will possibly work for a few more years so wasn't going to go big into inquiring about this until I hit the big 60. I believe social welfare will give me a pension forecast then.

Thanks to all appreciate the input.
 
Japester wrote Its all so messy is'nt it. being a class D employee ia so much easier.

maybe for pension purposes it is but for sick benefit I think Class A is better. As when your sick benefit from your occupation is exhausted as a Class D your broke but as a Class A you can still get illness benefit.
 
"Getting back to what we had been discussing and the issue raised in the title to this thread (Bridging the gap between 60 and OAP) and with specific reference to Class A people taking retirement at 60 - or at any age up to State Contributory Pension - I would like to raise a number of queries with you based on your reply at post number 89."


Would you care to comment on the following later extract, particularly in relation to you earlier insistence that Supplementary pension is only :

"to bridge the gap if you don't have enough PRSI contributions"

"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."

I am not sure what you exactly you would like me to comment on?

I asked you to comment on this:

"An employee retires on normal grounds at age 60 on a pension of £40 a week. He does not qualify for any benefit from the DSCFA until his 65th birthday when he will become entitled to a Retirement Pension (The Maximum rate of a Retirement and Contributory Old Age pension is the same. If his pension had not been coordinated it would have amounted to £55 a week."

In this case the the employee is entitled to a supplementary pension of £15 a week. This is to be increased with pension increases in the normal way. The supplementary pension will cease at 65 on becoming eligible to a Retirement Pension from the DSCFA ."

You provided this as a response.

"I will comment but in the context of the whole document and ,in particular, in the context of Paragraphs 3 and 4. The document, taken together with the above documents, describes and illustrates that the purpose of the Supplementary Pension is to "bridge the gap" between age 60 and Contributory (Old Age) pension age for a coordinated pension scheme member who does not otherwise qualify for a Social Welfare Benefit".

If you are commenting on it in the context of the whole document, then let me refer you to the whole document, as in the other 7 paragraphs that you left out:

Paragraph 1:

"Further to a number of queries to Head Office in respect of Psychiatric Nurses who can retire earlier than the 60 years qualifying age outlined in the Legislation (Article 71 the Local Government Superannuation Scheme), clarification in respect of this matter issued to Pensions Managers for Dept. of Health on 31st March 2008 (Circular 4/2008) as follows:"

Paragraph 2:

"I write to clarify that Article 71 of the Local Government Superannuation Scheme- Determination of allowance granted to registered officer, sub section 3 (b) relating to a fully registered officer who has attained the minimum retirement age for his post applies to fully insured psychiatric nurses whose minimum retirement age is 55.

You said " the document refers to a person retiring at 65". By accident or by design, you are misrepresenting the document, which clearly refers to people retiring at either 55 or 60.
Paragraph 3:

"The Supplementary allowance is payable where the person is unemployed , fails to qualify, or, qualifies for less than the maximum rate of social welfare benefit set out in Article 71 (3) dues to causes outside his/her control. The conditions specified in Article 71 (3) of the scheme must be set in all such cases".

The title of the document is "Entitlement to Supplementary Pension". Paragraph 3 above, clearly and unequivocally sets out when the supplementary pension is payable, it clearly and unequivocally states that it is when a person is unemployed, fails to qualify, or, qualifies for less then the minimum rate of SW benefit.

Next is paragraph 4:

Who can benefit?

"Payment of a supplementary pension can arise where the person has retired from a Public Service position and was paying full PRSI i.e. be a Class A PRSI contributor and is only eligible for what is known as a co-ordinated pension, retires before reaching 65 years of age and who has no entitlement to any social welfare benefit or qualifies for a reduced level of benefit only."

Paragraph 5:

Who can benefit?

Payment of a supplementary pension can arise where the person has retired from a Public Service position and was paying full PRSI i.e. be a Class A PRSI contributor and is only eligible for what is known as a co-ordinated pension, retires before reaching 65 years of age and who has no entitlement to any social welfare benefit or qualifies for a reduced level of benefit only.

Note the person has retired. Note that were paying full PRSI. Note they are only eligible for the co-ordinated pension. Note they have no entitlement to any SW benefit.

Paragraph 6:

What is a coordinated pension?

"The Principle underpinning a coordinated pension is that the person would work to age 65 when they would become entitled to a Social Welfare Retirement Pension now known as State Pension (Transition) for one year until they reach 66 when they become entitled to a Contributory Old Age Pension (C.O.A.P). "

"The Pension payable from the employer is co-ordinated to take account of these social welfare benefits, at their maximum rates, to ensure that those insured under Class A PRSI do not have a greater benefit, when the service pension and social welfare pension are combined, than those paying Class D PRSI. "

Note it is to take account of the SW benefits. Note that their pension must not be greater that a Class D PRSI employee.


"Up to April 95’ most public servants superannuated under the Local Government Superannuation Scheme paid Class D PRSI but then Government introduced legislation that all persons recruited to the Public Service from that date would be fully insured class A PRSI contributors. Most Nurses superannuated under the Nominated Health Agencies Superannuation Scheme (N.H.A.S.S.) and Voluntary Hospitals Superannuated Scheme (V.H.S.S.) have always been P.R.S.I. Class A contributors."

Note this is where the change in how the pension was calculated happened.

Paragraph 7:


What is the difference in calculation of a service pension for Class D and Class A PRSI contributors?
-Class D PRSI contributor retires with entitlement to full pension on pensionable pay of €50,000. Annual pension is €25,000
[i.e. €50,000 x 40 ÷ 80.]

Note it is the calculation that is different. Note the entitlement is full pension 40 ÷ 80

Class D PRSI Contributor has no entitlement to State Pension (Transition) or to Contributory Old Age Pension.

Class A Contributor retires on their 65th Birthday with entitlement to full pension on pensionable pay of €50,000.

Note the entitlement is a full pension on pensionable pay.

"Their pension is coordinated i.e. double the maximum rate of contributory old age pension (C.O.A.P) is taken from pensionable pay before the calculations are made. "

"Pension therefore is €13000
[ i.e. €50,000 – €24,000 (double maximum rate of C.O.A.P at Jan '10) x 40 ÷ 80]."

"This annual pension of €13000 together with the State Pension (Transition) of €12000 (maximum rate the same rate as C.O.A.P) brings the total to €25000 exactly the same as that of the PRSI Class D employee."

Note that they must be in the same pension position as a Class D employee, not better off and not worse off - the same.

Paragraph 8:

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.

Note that the post 1995 pension must be the very same under the new calculation method, as if it were calculated under the old method.

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.

I already clarified this.

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}

I already clarified this.

Circumstances in which supplementary pension can be paid.
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

The legislation is referred to in Paragraph 1:

"(Article 71 the Local Government Superannuation Scheme), clarification in respect of this matter issued to Pensions Managers for Dept. of Health on 31st March 2008 (Circular 4/2008)"

The problem identified after 1995 relates to the entitlement to SW benefits, these entitlements are based on PRSI (Class A) contributions, if a post 1995 employee was short for a reason, example, illness (where he was in receipt of benefits, thus reducing his stamps) or unemployment, for example, prior to him joining the job.

Anytime you claim a SW benefit, your contributions reduce, because you are using them.

Paragraph 9:

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.

You accused me of being selective, yet you took a document, ignored the name of it, ignored the first two paragraphs, misrepresented paragraphs 3 & 4 by alleging the document pertained to those retiring at 65.

You then inserted a passage (3.6) ignoring all the relevant passages before that passage and ignored paragraphs 5, 6, 7 and 8 of the document you linked.

And while doing this, you alleged that I was being "selective".





 

Hello Meath Lady

I see that you have confirmed that the normal retirement age in your scheme is 65.
I have done a few rough calculations for you, if this is of any assistance. For the purposes of these calculations I am assuming that the Terms of Conditions of your scheme are essentially the same as in the pre-2004 Class A schemes, except for the change in the normal retirement age from 60 to 65. But I have to give a health warning that I cannot confirm that this is so, as I have had no experience of anyone in a post 2004 scheme and I have not read the documentation.

For the purpose of these calculations I have given you an assumed date of birth of 1/3/1957 and also assumed that you plan to retire on 1/4/2020 at age 63. You would have two options (other than ill-health retirement which I am am excluding from these calculations) :

Retirement with preserved benefits - ,ie, your pension benefits are deferred until your 65th birthday.

Actuarially reduced early retirement.

For both of these options there are 3 elements to consider in the estimate - Occupational Pension, Supplementary Pension and Social Welfare. I have made use of the Pension Modeller to estimate the first two of these. I have excluded any consideration of future increments and just used your current salary.

Occupational Pension

Preserved Pension : Given the assumptions already made, if you retired on 1/4/2020 you should be entitled to a preserved Occupational pension at 65 of approximately €2296 and a Gratuity of €17223.

Actuarially reduced Pension : If you choose instead to take the Occupational Pension Pension on 1/4/2020 the estimate is for €2043 with a Gratuity of €16579.

Supplementary Pension

The Supplementary Pension is this specific scenario is calculated by subtracting the preserved pension estimate from what the estimate would have been in a Class D scheme (which I estimate as being €5740) . This gives a figure of €3444.

Now if the same rules apply as for the pre-2004 employees (and they probably do) the Supplementary is only payable to you from your 65th birthday (normal pension age). The normal conditions apply for eligibility for the supplementary as I have referred to in other postings (eg you must first claim any Social Welfare Benefit to which you are entitled and if this is greater than €3444 you are excluded, you cannot be in gainful employment, etc.) When you claim you Contributory Old Age Pension at 67 your eligibility for the supplementary ends (again presuming the Contributory rate is greater than €3444).

Social Welfare

I am afraid I cannot meaningfully contribute anything as regards estimating the number of contributions you will eventually have or the rate you will receive. However, if you retire at 63 you can apply for Unemployment Benefit for 9 months and then subsequently keep signing for Credits up until your 66th Birthday. This should as least improve your chances of getting an improved rate. If you should do this ,you should also be eligible for the Supplementary Pension at 65 until OAP age - so you would "only" be about 15 months on the Actuarially Reduced Occupational rate.

Please note : this is not a professional estimate. You should get as estimate from your Pension Office before making any final decisions.
 
Last edited:
japester said:
So, in effect, you'd have to tell some white lies in order to sign on for credits while continuing to receive the supplementary pension! It's all so messy isn't it? Isn't being a class D employee so much easier!
Click to expand...

Yes and no, Japster. You do not have to sign for credits to remain eligible for the Supplementary - in that regard it doesn't matter either way. But it may well be to your long term advantage to do so ,ie, in terms of the level of Contributory OAP you qualify for. What you do have to do is apply for whatever Social Welfare benefits for which you may be eligible, eg, Jobseeker's Benefit, which currently runs for 9 months.

You could say that there is a white lie involved in this. However, you are expected to apply. In effect, retired public servants in this scenario are not unusual and the Social Welfare people seem to operate a "Don't ask, Don't tell " approach. I personally know two retired public sector people who are in this scenario, ie, signing for credits (I think it is only once a year), having exhausted the Jobseekers Benefit. Being checked on as regards seeking employment or engaging in programmes never arose. Indeed, the official Circular 10/99 (google it) states:

"In practice, staff retiring below the age at which Retirement Pension/Old Age Contributory Pension become payable, having paid full PRSI, will in most case be entitled to the payment of Unemployment Benefit following retirement and the payment of the Supplementary Pension will in most cases not become payable during this period". (Pension and benefit terminology from the time).



I absolutely agree - the two approaches are not identical and each have advantages and disadvantages.
 
Hi Early Riser: Thank you for all the ideas and contributions. I am going to start by contacting my HR Department which are not very good to obtain details of the pension scheme for post 2004 employees. I would also think it will be the same as pre 2004 entrants. i will then contact citizens advice and make an appointment with Social Welfare as suggested and start the ball rolling. I will keep ye updated. many thanks as this is very complicated and will need some planning.
 
@Meath Lady:

On your retirement under the scheme you joined under here:

http://www.cspensions.gov.ie/SuperannuationHandbookandGuidanceDec20061.pdf

5. PENSIONABLE REMUNERATION 5.1 Lump sum superannuation benefits (i.e. retirement lump sums and all gratuities) are calculated by reference to pensionable remuneration and reckonable service. Pensionable remuneration is the aggregate of pensionable salary and pensionable emoluments.

5.2 . Pension are also calculated by reference to pensionable remuneration for officers appointed prior to 6 April 1995. However, pensions for officers appointed on or after that date, are calculated by reference to pensionable remuneration and to an integration method which takes account of the Contributory State Pension (CSP) - see Chapter 7.


7. INTEGRATION :

POST 5 APRIL 1995 STAFF

"7.1 As indicated at paragraph 5.1, an integration method is used in calculating the pension (but not the lump sum) benefits of officers appointed on or after 6 April 1995.

Integration takes into account the value of the Contributory State Pension (CSP) in calculating the pension payable from the Superannuation Scheme. The integration method or formula was amended effective from 1 January 2004.

7.2 The 2004 Integration Formula: The method of calculating Main Scheme pension for officers recruited on or after 6 April 1995 who qualify for benefits on or after 1 January 2004 is: (a) For that part of the officer’s pensionable remuneration which is less than or equal to 31 /3 times the current rate of CSP, 1 /200th of pensionable remuneration multiplied by the number of years of reckonable service plus (b) For any part of the officer’s Pensionable Remuneration which exceeds 31 /3 times CSP, 1 /80th of pensionable remuneration multiplied by the number of years of reckonable service A multiplier of 3.333333 (i.e. 6 decimal places) is used to calculate 31 /3 times CSP. The maximum number of years of reckonable service is 40.

The CSP rate is the maximum Contributory State Pension payable by the Department of Social and Family Affairs to a single person without dependants on the last day of the officer's pensionable service."

Here is an example:

7.4.1 Example 1:

A full-time member recruited post 5th April 95 who retires on or after 1 January 2004:

Actual remuneration at retirement = €24,000

CSP at retirement (1 Jan 2005) = €9,355.87

3 1 /3 CSP = €31,186

Pensionable remuneration = €24,000 Service (Actual reckonable) = 40 years Pension = 1 /200 x Pensionable remuneration up to €31,186 x service plus 1 /80th of balance in excess of €31,186 x service = € 24,000 x 40 = €4,800 (note no balance in excess of €31,186) 200

So, let's try and apply the formula!

For that part of the officer’s pensionable remuneration which is less than or equal to 31 /3 times the current rate of CSP, 1 /200th of pensionable remuneration multiplied by the number of years of reckonable service.

Your actual Remuneration at retirement = €32,800 (Using it as an example, even though you may have more increments).

Current CSP rate at retirement (Feb 2016) is 230.30 x 52 = 11,975.60 x 3.333333 = 39,918.66

Pensionable remuneration = €32,800 (Actual reckonable) = 40 years pension = 1/200 x pensionable remuneration up to 39,918.66 x service (14 years) plus 1/80th balance in excess of €39,918.66 x service = 32,8 x 40 = 2794.30


So, according to this your "occupational" pension is €2,794.30 and:

"The CSP rate is the maximum Contributory State Pension payable by the Department of Social and Family Affairs to a single person without dependants on the last day of the officer's pensionable service."

€11,975.60, giving you a total pension entitlement on retirement at 65 of = €14,769.90.

As you can see, your CSP (State pension, formally known as OAP), has been included in your final pension entitlement.

This is your entitlement, now how you get to this is the complicated part, but NB - you must get to this, because this is the scheme that you joined.

The issue for you is whether or not you have paid enough PRSI Class A stamps to be eligible for qualification to receive the CSP on the day you retire at 65.

Your occupational pension is your occupational pension, it is based on your actual years service and on taking your eligibility to the CSP pension into account.

If the SW inform you that you do not have enough contributions for the maximum CSP rate (230.30), you should have enough contributions for another SW payment in the form of the Job Seekers Benefit.

The rate of JSB is 188 per week, remember that your pension has been calculated including the maximum CSP rate of 230.30.

Your employer has calculated your pension entitlement to "include" (Or coordinate or integrate) what they believe is your CSP entitlement of €11,975.60.

Now, as we said, you may not have the contributions for the CSP, because the qualification for this is based on your entire working history.

The eligibility criteria for the JSB is different:

  • "At least 104 weeks PRSI paid since you first started work
And

  • 39 weeks PRSI paid or credited in the relevant tax year (a minimum of 13 weeks must be paid contributions*)
Or

  • 26 weeks PRSI paid in the relevant tax year and 26 weeks PRSI paid in the tax year immediately before the relevant tax year.
*If you do not have 13 paid contributions in the relevant tax year, you must have paid 13 contributions in any of the following years:

  • The 2 tax years before the relevant tax year
  • The last complete tax year
  • The current tax year.
The relevant tax year is the second last complete tax year before the year in which your claim is made. So, for claims made in 2016, the relevant tax year is 2014."

Now let's assume that you retire at 65 (Not before) and you fulfill the above criteria.

You would then be entitled to a JSB of €9,776 per year.

So now you are entitled to the "occupational" part of your pension:

€2,794.30 (From employer)
plus

This payment from the SW:
€9,776 (SW entitlement @ JSB rate)
----------

€12, 570.30

Remember that your entitlement under the terms of the DB pension scheme that you are a member of is:

€14,769.90

Your shortfall is now:

€2,199.60

At this stage, the Supplementary pension becomes applicable to fill the shortfall between what you are entitled to and what you have when both your occupational (years worked) and your Social Welfare entitlements (JSB) are integrated.

Take this as you will, check out your entitlements, read the link which refers to your situation and good luck.
 

That's interesting ppmmeath and thanks for that example - the numbers given by the formula above are exactly in line with the occupational pension figure I am getting by running my figures through the PS pension modeller available online. It therefore looks from what you are saying that, provided I have enough PRSI contributions made, I would get the €12173.59 SW pension on top of my occupational pension at 60 - this would leave me about €2k better off than my pre-95 counterpart and, assuming this was the case and I was entitled to the whole SW pension, I would then of course receive no supplementary pension at all. This seems to be at odds with Early Risers post #91 where at the end he has a link to a Supplementary Pension application form for the education sector (my own area) ..... or is it at odds really .... is it the case that I would have to apply to the SW dept for that portion of my pension on reaching 60 and then, depending what they come back with, I would either receive an amount equivalent to the value of the OAP at that time (because I have sufficient PRSI contributions and thus do not need to receive or apply for any supplementary pension) or else they could tell me I don't qualify for the full value of the OAP due to lack of PRSI contributions, in which case I would then have to apply to the Dept of Ed and Skills for the Supplementary Pension to make up the shortfall. I think it's starting to make more sense to me at last!
 
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