Bridging the gap between 60 and oap

ppmmeath · 15 Feb 2016

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.

As they should be.

"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"

The Max "State pension" (Calculated as Max rate OAP pension), is 230.30 pw (today's rate). Your entitlement providing your have enough PRSI contributions is actually €11,975.60.

"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"

The pension modeller here

"Total reckonable service* 40 Years (Max) Pensionable Remuneration €70,000"

"Your Benefits on retiring at age 60 based on salary supplied by you.
If you retire at age 60 you would receive a once off tax-free retirement gratuity of €105,000, less the deduction of any outstanding contributions. You would also receive a pension of €35,000. Your pension would be paid in arrears on a fortnightly basis. "

(Details were DOB 1/1/1960, entered service 1/1/1980 as of today served 36 years and 45 days retiring at 60)

The very same pension that you are entitled to.

"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)"

Please note what the application form says here:

2. I have read the Supplementary Pension Explanatory Note.

This is the Explanatory note:

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

Early Riser quoted section 3.6 here:

"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)"

But he omitted the following paragraphs and the application is to be read in conjunction with this entire document and not one select paragraph.

1 WHAT IS SUPPLEMENTARY PENSION?

1.1 In accordance with the terms of the individual pension scheme [for example Primary School Teachers Pension Scheme 2009, S.I. No 434 of 2009, Article 8 (3)] supplementary pension may form part of the pension paid to retirees who paid full-rate PRSI contributions in respect of all or part of pensionable service and/or in respect of purchased service. Full rate PRSI contributions are Class A contributions which may entitle the retiree to certain Social Welfare benefits.

1.2 The pension payable by this Department is calculated and paid, subject to certain terms and conditions, as outlined here: o Coordinated Occupational pension o and either o Social Welfare benefits/pension o or o Supplementary pension paid by this Department or Social Welfare benefit. This is called a co-ordinated pension as it has the potential to have occupational pension coordinated with Social Welfare Benefits.

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. (Translation, it must be the same pension as your pre-1995 counterpart)

(As discussed and as you have seen for yourself, the purpose of co-ordination is to ensure that the combined amount of occupational pension plus SW benefit approximates to the total amount - approximate means "close to the actual amount", don't be distracted by this)

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.

2.3 Co-ordinated pension in full or in part arises in the following circumstances: Payment of Class A PRSI contribution for a period of pensionable service. Payment of Class A PRSI contribution in respect of purchased service such as non-pensionable, unqualified, substitute and part time service.

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. (This is now reduced to 11,975.60, todays rate is 230.30 x 52 x 3.333333 =39,918.66).

(In your case, the calculation is as follows:

Your actual Remuneration at retirement =€70,000

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

Pensionable remuneration = €70,000 (Actual reckonable) = 40 years pension = 1/200 x pensionable remuneration up to 39,918.66 x service (40 years) 7983. 73 - plus 1/80th balance in excess of €39,918.66 x service (40 years) = 15,040.67.

Occupational pension - 7983.73 plus 15,040.67 = 23,024.40 Plus State pension (PRSI) 11,975.60 = €35,000)

This is your pension when you retire at age 60. This is your pension as set out in the defined benefit scheme of which you are a member. Your entitlement is 40/80ths or €35,000 payable in full at 60.

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.

"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"

It is completely at odds because he is deducting the SW portion of your "entitlement", whereas it is included, or intergrated, or coordinated. The assumption from your employer is that after 40 years paying the Class A - you are eligible for it and entitled to it.

"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)"

Yayyyyy!! Technically it is your OAP, brought forward, this is to equal your pension to the very same pension as your pre 1995 counterpart.

"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!"

Yayyyy. (Sorry).

When you retire at 60, you are entitled to your benefit as set out in your DB scheme and that is 40/80ths of your pension - how you get there has changed, but you must get there, because that is your entitlement.

In your case, there is no shortfall, you do not need to sign on, claim JSB, look for a job, wait 7 years, tell white lies - for the same pension that your counterpart received at 60? That is absolute nonsense.

Meath Lady · 15 Feb 2016

ppmmeath. thanks again for working out the figures. i cant understand why it all has to be so complicated and will need some time to digest it. i have today contacted my HR department and requested the information for post 2004 employees. i will re read with interest these posts and eventually will hopefully fully understand them. many thanks

ppmmeath · 15 Feb 2016

Absolutely no problem Meath Lady.

Here is another DOE here:

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

Not sure if this is your department, but it confirms the calculation method as set out in my post:

"In the case of a teacher paying A Rate PRSI, the pension is 1/200th of retiring salary, up to a threshold of 3⅓ times the single rate of State Pension Contributory (SPC), together with 1/80th of such retiring salary (if any) as exceeds the threshold. This is a co-ordinated pension. Where a co-ordinated pension is in payment, a supplementary pension may be payable in certain circumstances."

What is really odd is that this is the only link that really clarifies the application of the supplementary pension!

"Supplementary Pension (if applicable) Maximum supplementary pension equates to the difference between (I) unco-ordinated pension and (II) co-ordinated pension I = service x salary 80 II = service x (salary ≤ SPC x 3.333333) 200 + service x (salary > (SPC x 3.333333)) 80 The pension for a teacher who paid Class D PRSI or the combined pension (co-ordinated + supplementary) of a person who paid Class A PRSI is subject to a maximum benefit of ½ of pensionable remuneration."

Meath Lady · 15 Feb 2016

just to clarify i am not a teacher. I am an SNA

japester · 16 Feb 2016

ppmmeath said:
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.

As they should be.

"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"

The Max "State pension" (Calculated as Max rate OAP pension), is 230.30 pw (today's rate). Your entitlement providing your have enough PRSI contributions is actually €11,975.60.

"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"

The pension modeller here

"Total reckonable service* 40 Years (Max) Pensionable Remuneration €70,000"

"Your Benefits on retiring at age 60 based on salary supplied by you.
If you retire at age 60 you would receive a once off tax-free retirement gratuity of €105,000, less the deduction of any outstanding contributions. You would also receive a pension of €35,000. Your pension would be paid in arrears on a fortnightly basis. "

(Details were DOB 1/1/1960, entered service 1/1/1980 as of today served 36 years and 45 days retiring at 60)

The very same pension that you are entitled to.

"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)"

Please note what the application form says here:

2. I have read the Supplementary Pension Explanatory Note.

This is the Explanatory note:

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

Early Riser quoted section 3.6 here:

"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)"

But he omitted the following paragraphs and the application is to be read in conjunction with this entire document and not one select paragraph.

1 WHAT IS SUPPLEMENTARY PENSION?

1.1 In accordance with the terms of the individual pension scheme [for example Primary School Teachers Pension Scheme 2009, S.I. No 434 of 2009, Article 8 (3)] supplementary pension may form part of the pension paid to retirees who paid full-rate PRSI contributions in respect of all or part of pensionable service and/or in respect of purchased service. Full rate PRSI contributions are Class A contributions which may entitle the retiree to certain Social Welfare benefits.

1.2 The pension payable by this Department is calculated and paid, subject to certain terms and conditions, as outlined here: o Coordinated Occupational pension o and either o Social Welfare benefits/pension o or o Supplementary pension paid by this Department or Social Welfare benefit. This is called a co-ordinated pension as it has the potential to have occupational pension coordinated with Social Welfare Benefits.

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. (Translation, it must be the same pension as your pre-1995 counterpart)

(As discussed and as you have seen for yourself, the purpose of co-ordination is to ensure that the combined amount of occupational pension plus SW benefit approximates to the total amount - approximate means "close to the actual amount", don't be distracted by this)

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.

2.3 Co-ordinated pension in full or in part arises in the following circumstances: Payment of Class A PRSI contribution for a period of pensionable service. Payment of Class A PRSI contribution in respect of purchased service such as non-pensionable, unqualified, substitute and part time service.

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. (This is now reduced to 11,975.60, todays rate is 230.30 x 52 x 3.333333 =39,918.66).

(In your case, the calculation is as follows:

Your actual Remuneration at retirement =€70,000

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

Pensionable remuneration = €70,000 (Actual reckonable) = 40 years pension = 1/200 x pensionable remuneration up to 39,918.66 x service (40 years) 7983. 73 - plus 1/80th balance in excess of €39,918.66 x service (40 years) = 15,040.67.

Occupational pension - 7983.73 plus 15,040.67 = 23,024.40 Plus State pension (PRSI) 11,975.60 = €35,000)

This is your pension when you retire at age 60. This is your pension as set out in the defined benefit scheme of which you are a member. Your entitlement is 40/80ths or €35,000 payable in full at 60.

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.

"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"

It is completely at odds because he is deducting the SW portion of your "entitlement", whereas it is included, or intergrated, or coordinated. The assumption from your employer is that after 40 years paying the Class A - you are eligible for it and entitled to it.

"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)"

Yayyyyy!! Technically it is your OAP, brought forward, this is to equal your pension to the very same pension as your pre 1995 counterpart.

"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!"

Yayyyy. (Sorry).

When you retire at 60, you are entitled to your benefit as set out in your DB scheme and that is 40/80ths of your pension - how you get there has changed, but you must get there, because that is your entitlement.

In your case, there is no shortfall, you do not need to sign on, claim JSB, look for a job, wait 7 years, tell white lies - for the same pension that your counterpart received at 60? That is absolute nonsense.

Thanks again ppmmeath for all your efforts on this, it is very much appreciated - the fog has definitely cleared for me and I am certain your posts, along with Early Risers and others will have gone a very very long way to clarifying things for all those Class A post 95ers who will be taking retirement before official OAP age.

allencat3 · 16 Feb 2016

PPM, EarlyRiser, etc....thanks a million for digging up relevant info re the pension for post-95/pre-2004/ClassA PRSI civil servants including myself.

Am working on copying/pasting extracts as part of preparing a document for emailing to my Dept Employee Assistance Officer within the next few weeks. Have to ask him to clarify which is the better situation for my case, based on variables: service - 14 years (mix of worksharing and fulltime), age - 63 next June, probable date of retirement (my choice) - 30/9/16. I was led to believe that IRH applies only to those under the age of 60 ??

Had already lodged a request for Pension Estimate (for Early Retirement) some weeks ago, acknowledged and 'still being worked on'.

Dilemma: which is better - IHR or ER? I'm hanging on till Sept of this year, in order to pass the 63th birthday mark in June, because I would be entitled to Illness Benefit which will run for up to 2 years. Would the Pensions section of Paymaster General deduct, from the CS pension, the welfare benefits (IB and/or Invalidity Pension (IP) - which would, I assume, be paid only from Sept 2017 (one year after retirement date of 30/9/16) if I am "incapable to work for the past 12 months to qualify for IP"? I can't visualise that, knowing my ER pension, based on a recent estimate from the Modeller), would be around 50 euros per week ...

Have to be extra cautious, knowing that my request for an estimate for IHR one year ago was miscalculated and re-calculated to include info re my incentivised career break. In case you may wonder, and at the same time, may be useful for your info, here are the following figures:

Keys: (F/T => Full-time working, P/T => Part-time, ICB => Incentivised Career Break)
Entered Civil Service at 13/10/1997, as personal assistant (grade - CO).

13/10/97 - 9/3/99 at 100% (F/T),
10/3/99 - 30/11/13 - 50% (P/T),
1/12/13-19/7/07 - 73% (P/T),
20/7/07-30/12/09 - 80% (P/T);
ICB from 1/1/2010 to 14/04/2013 (no PRSI contribs during that period)
15/04/13 to today - 100% F/T

Estimates, presented in Oct.2013 by Pensions Shared Service:
Service to date: 5 yrs, 234 days,
Ill-health notional service - 4 yrs 221 days
Potential Total Service: 10 years 90 days
Potential Net Lump Sum: €12,631
Potential ANNUAL Pension: €1,913

After discussion with my EAO re IHR & ER last year, I told him of my suspicions re the above figures, after obtaining the estimates for ER on Pension Modeller. He then asked the PSS to check out, and the correct estimates in Aug. 2015 are as follows:

Service to date: 8 years 338.2 days
Ill-health notional service: 3 years 317.1 days
Potential Net Lump Sum: €16,197.47
Potential Annual Pension: €2,389

Thanks for bearing with me, and again for the interesting, yet complex discussion on this important matter.
Kind regards,
allencat

allencat3 · 16 Feb 2016

Hi again, forgot to mention that I had accumulated 24 yrs' service in the private sector from 1971 to 1995 before taking voluntary redundancy. Shortly after my 60th birthday, I received a small occup. pension - around €320 per month after deductions, as well as AVCs invested into ARF (I think?)

Would this occup. pension affect my CS Pension (whether it be IHR or ER) ?

allencat

Early Riser · 16 Feb 2016

allencat3 said:
PPM, EarlyRiser, etc....thanks a million for digging up relevant info re the pension for post-95/pre-2004/ClassA PRSI civil servants including myself.

Am working on copying/pasting extracts as part of preparing a document for emailing to my Dept Employee Assistance Officer within the next few weeks. Have to ask him to clarify which is the better situation for my case, based on variables: service - 14 years (mix of worksharing and fulltime), age - 63 next June, probable date of retirement (my choice) - 30/9/16. I was led to believe that IRH applies only to those under the age of 60 ??

Had already lodged a request for Pension Estimate (for Early Retirement) some weeks ago, acknowledged and 'still being worked on'.

Dilemma: which is better - IHR or ER? I'm hanging on till Sept of this year, in order to pass the 63th birthday mark in June, because I would be entitled to Illness Benefit which will run for up to 2 years. Would the Pensions section of Paymaster General deduct, from the CS pension, the welfare benefits (IB and/or Invalidity Pension (IP) - which would, I assume, be paid only from Sept 2017 (one year after retirement date of 30/9/16) if I am "incapable to work for the past 12 months to qualify for IP"? I can't visualise that, knowing my ER pension, based on a recent estimate from the Modeller), would be around 50 euros per week ...

Have to be extra cautious, knowing that my request for an estimate for IHR one year ago was miscalculated and re-calculated to include info re my incentivised career break. In case you may wonder, and at the same time, may be useful for your info, here are the following figures:

Keys: (F/T => Full-time working, P/T => Part-time, ICB => Incentivised Career Break)
Entered Civil Service at 13/10/1997, as personal assistant (grade - CO).

13/10/97 - 9/3/99 at 100% (F/T),
10/3/99 - 30/11/13 - 50% (P/T),
1/12/13-19/7/07 - 73% (P/T),
20/7/07-30/12/09 - 80% (P/T);
ICB from 1/1/2010 to 14/04/2013 (no PRSI contribs during that period)
15/04/13 to today - 100% F/T

Estimates, presented in Oct.2013 by Pensions Shared Service:
Service to date: 5 yrs, 234 days,
Ill-health notional service - 4 yrs 221 days
Potential Total Service: 10 years 90 days
Potential Net Lump Sum: €12,631
Potential ANNUAL Pension: €1,913

After discussion with my EAO re IHR & ER last year, I told him of my suspicions re the above figures, after obtaining the estimates for ER on Pension Modeller. He then asked the PSS to check out, and the correct estimates in Aug. 2015 are as follows:

Service to date: 8 years 338.2 days
Ill-health notional service: 3 years 317.1 days
Potential Net Lump Sum: €16,197.47
Potential Annual Pension: €2,389

Thanks for bearing with me, and again for the interesting, yet complex discussion on this important matter.
Kind regards,
allencat

Hello allencat3,

Sorry to hear that you have been having some health problems.

I should say that I have had no experience with ,and little knowledge of IHR. So I give the following contribution while advising added caution. Also you omit to mention your salary (or did I miss it?). I am guessing from your figures in the pension estimate above, and working backwards, that your salary is in region of €36 K ?

Something else I am unclear about - in relation to your pension estimate from last August when, I take it from what you have said, you were over 62 years. They were allowing you 3 years 317 days notional service. I thought the maximum allowable is the amount that could normally be accrued by actual service up to 65. Is your date of birth June 1953 ? ( see Section9.1 from
http://www.cspensions.gov.ie/SuperannuationHandbookandGuidanceDec20061.pdf).

Anyway, I am making these assumptions for the moment. You were born in 1953, your salary is in the region of €36 k, you will retire in September 2016. You will have the option of taking ill-health retirement. If you do you will have an occupational pension approximately as provided by your pension department last August. Based on this it seems to me that IHR is clearly the better option.

The approximate normal pension (no IHR) you would obtain in September 2016, based on the assumptions I have made above, would be for a Gratuity in the region €13800 and an Occupational Pension in the region of €1840. As your not retiring on the grounds of ill- health in this option, the only Social Welfare you could access would be Jobseeker's Benefit, which only last for 9 months. Of course, if during this period you became ill you could transfer to Illness Benefit which, I understand, lasts for up to 2 years. Failing this, when your Jobseeker's end, you would have to go back to your employer and apply for a Supplementary Pension which, on the same assumptions, I estimate to be about €2750 pa. This would last up until 66 and the State Contributory Pension.

On the other hand, if you took IHR you would have Illness Benefit for two years and possibly transfer to Invalidity Pension up to State Pension age. In the event that you ceased to qualify for either of these at any stage, you could still, as a fallback position, claim the Supplementary from your employer. And you would still be benefiting from a bigger Occupational Pension and Gratuity.

If you want to come back to confirm or update or confirm any of the figure (eg salary, age DOB) or clarify my assumptions, please do - and I will go back to the drawing board.

allencat3 said:
Hi again, forgot to mention that I had accumulated 24 yrs' service in the private sector from 1971 to 1995 before taking voluntary redundancy. Shortly after my 60th birthday, I received a small occup. pension - around €320 per month after deductions, as well as AVCs invested into ARF (I think?)

Would this occup. pension affect my CS Pension (whether it be IHR or ER) ?

allencat

The previous Occupational Pension and ARF should have no impact on your CS pension. Nor should they have any impact on any of these Social Welfare payments as they are not means tested but based on PRSI record (as far I I know - but I am not very familiar with the criteria for the Welfare system) They are all, however, subject to tax and, apart from the Social Welfare payments, to USC. I think they are all exempt from PRSI with the possible exception of the ARF.
Your quite extensive PRSI record prior to the Public Service is very beneficial in terms of obtaining maximum, or near maximum Contributory State Pension, You will get credits while signing for Social Welfare. I take it you kept up a full record when working part-time ?

allencat3 said:
Would the Pensions section of Paymaster General deduct, from the CS pension, the welfare benefits (IB and/or Invalidity Pension (IP) - which would, I assume, be paid only from Sept 2017 (one year after retirement date of 30/9/16) if I am "incapable to work for the past 12 months to qualify for IP"? I can't visualise that, knowing my ER pension, based on a recent estimate from the Modeller), would be around 50 euros per week ...

Allencat3 - I am not sure what you mean in the above ? What you get in the Occupational pension will have no impact on whatever Welfare payments you may qualify for. The latter are based on your circumstances and PRSI record. However, in the event that you qualify for one of these Welfare payments between retirement and State Pension Age you will not be eligible for a Supplementary Pension from your employer. If you are not eligible for the Social Welfare for any reason you can claim Supplementary from your employer.

Your Occupational Pension will continue in full in any event.

Best of luck!

commonsense · 16 Feb 2016

commonsense · 16 Feb 2016

ppmeath · 16 Feb 2016

Something else I am unclear about - in relation to your pension estimate from last August when, I take it from what you have said, you were over 62 years. They were allowing you 3 years 317 days notional service. I thought the maximum allowable is the amount that could normally be accrued by actual service up to 65. Is your date of birth June 1953 ?

When he was given those estimates he was 3 years and 317 days away from retirement age - 65.

Anyway, I am making these assumptions for the moment. You were born in 1953, your salary is in the region of €36 k, you will retire in September 2016. You will have the option of taking ill-health retirement. If you do you will have an occupational pension approximately as provided by your pension department last August. Based on this it seems to me that IHR is clearly the better option.

He has that option now.

The approximate normal pension (no IHR) you would obtain in September 2016, based on the assumptions I have made above, would be for a Gratuity in the region €13800 and an Occupational Pension in the region of €1840.

He will not receive any occupational pension or grat in September 2016, because he will only be 63, his pension entitlement does not kick in until he is 65.

As your not retiring on the grounds of ill- health in this option, the only Social Welfare you could access would be Jobseeker's Benefit, which only last for 9 months. Of course, if during this period you became ill you could transfer to Illness Benefit which, I understand, lasts for up to 2 years.

If he retires at 63 then you are correct, he does have this option.

Failing this when your Jobseeker's end, you would have to go back to your employer and apply for a Supplementary Pension which, on the same assumptions, I estimate to be about €2750 pa. This would last up until 66 and the State Contributory Pension.

If he retires in September at 63, he will have no occupational pension. If he applies for JSB and receives it for 9 months then he is 64 and he still has no entitlement to an occupational pension until he is 65, he cannot go to his employer and apply for a supplementary pension, because he is not entitled to his pension until he is 65 - he cannot look to supplement a pension that he is not yet in receipt of.

On the other hand, if you took IHR you would have Illness Benefit for two years and possibly transfer to Invalidity Pension up to State Pension age.

Should he take IHR then either this SW benefit or the State pension (formally COAP), will be included in the calculations under the method that I have outlined for Japster.

In the event that you ceased to qualify for either of these at any stage, you could still, as a fallback position, claim the Supplementary from your employer.

If he takes IHR and if he is not entitled to any SW benefit, then yes he can apply for the supplementary pension.

.

ppmeath · 16 Feb 2016

Dilemma: which is better - IHR or ER?

This is your choice, however, if you are ill you can receive the added years to bring you to your max service.

I'm hanging on till Sept of this year, in order to pass the 63th birthday mark in June, because I would be entitled to Illness Benefit which will run for up to 2 years.

Have you paid sick leave? You still get paid for 3 months (full and 3 months half) whether you are eligible for IB or not.

RE: Illness benefit - why do you have to wait until September?

Would the Pensions section of Paymaster General deduct, from the CS pension, the welfare benefits (IB and/or Invalidity Pension (IP) - which would, I assume, be paid only from Sept 2017 (one year after retirement date of 30/9/16) if I am "incapable to work for the past 12 months to qualify for IP"? I can't visualise that, knowing my ER pension, based on a recent estimate from the Modeller), would be around 50 euros per week.

If I can refer you to the model I gave to Japster, they will either apply the full Max rate of the "state pension" or the IB, I will check this out.

Have to be extra cautious, knowing that my request for an estimate for IHR one year ago was miscalculated and re-calculated to include info re my incentivised career break. In case you may wonder, and at the same time, may be useful for your info, here are the following figures:

Always a good idea.

Estimates, presented in Oct.2013 by Pensions Shared Service:
Service to date: 5 yrs, 234 days,
Ill-health notional service - 4 yrs 221 days
Potential Total Service: 10 years 90 days
Potential Net Lump Sum: €12,631
Potential ANNUAL Pension: €1,913

After discussion with my EAO re IHR & ER last year, I told him of my suspicions re the above figures, after obtaining the estimates for ER on Pension Modeller. He then asked the PSS to check out, and the correct estimates in Aug. 2015 are as follows:

Service to date: 8 years 338.2 days
Ill-health notional service: 3 years 317.1 days
Potential Net Lump Sum: €16,197.47
Potential Annual Pension: €2,389

Both estimates are correct allencats. They are different because you had 3 years extra service between both of them.

ppmeath · 16 Feb 2016

I wanted to just clarify some issues because the more the thread evolved the more informed we all became.

I didn't get around to dealing fully with this post from The Ghoul.

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

The most important part of this sentence is that you are no longer making any Class A PRSI contributions.

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

You will be entitled to the same benefits as the pre 1995 employee which is 20/80ths, who on a salary of (example) 50k, will receive 20/80ths based on his service, so say 12,500 per annum.

The method for calculating your pension is now different as in it is co-ordinated with your PRSI contributions.

But if I am a post 1995 public servant, would I get a supplementary pension on top of my occupational pension to bring me up to a total pension 20/80ths.

Now this is the difficult part that I cannot seem to get across to some people here. You are entitled to get your 20/80ths on the day of your retirement - which in your case is 60.

Your employer assumes on calculations that you are fully insured through your PRSI contributions and those contributions deem you eligible for a range of payments, JSB, IB and the State pension (or COAP).

Your employer will pay you your "occupational" part of your pension and the SW will pay you the "State pension" part, which is currently 230.30pw or 11,975.60.

They will use the same formula as I applied to Japsters situation, in your situation based on (example) 50k salary on retirement here:

Your actual Remuneration at retirement =€50,000

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

Pensionable remuneration = €50,000 (Actual reckonable) = 20 years pension = 1/200 x pensionable remuneration up to 39,918.66 x service (20 years) 3,991.86 - plus 1/80th balance in excess of €39,918.66 x service (20years) = 2,520.33

Occupational pension - 3,991.86 plus 2,520.33 = 6,512.19 ( Plus State pension (PRSI) 11,975.60 - 18,487.79)

Both you and your pre-1995 counterpart began working at 20, you both left the service at 40 and you both did not work again.

You are both entitled to 20/80ths. Your pre 1995 counterparts 20/80ths is based only on actual years service, he never paid a Class A stamp so his 20/80ths will be approximately 12,500 (25% of 50k).

Your 20/80ths is calculated as above, however, because you did not pay any more PRSI Class A contributions, your 20/80ths is 6,512.19.

In my example both the pre 95 and post 95 are public servants 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.

You are entitled to social welfare if you leave at 40, because you voluntarily left, there is a penalty of a number of weeks (last I heard it was 9 unless they changed it), you are entitled to JSB and a range of other benefits.

So I do my back garden thing and then when I reach 60 as a post 95er I get my preserved benefit occupational pension and also apply for JSB/JSA. I am not available for work and have assets so I am refused.

You won't be eligible for JSB because you haven't made any PRSI contributions from 40 - 60, I posted the eligibility conditions in an earlier post.

I should then get the supplementary pension which means that my total pension is no worse or better than that of a pre 95er.

You won't be eligible for the supplementary pension because you chose not to make any PRSI contributions.

As pointed out above I may still be at a disadvantage if I am precluded from working while claiming the supplementary pension compared to the pre 95er who is not precluded from working while claiming his occupational pension.

If the pre 1995er didn't work again and didn't pay any Class A PRSI contributions and claims his occupational pension at 60, then why would he be excluded from working?

"But this would be no big deal for me seeing as I wouldn't want to work."

If you chose to retire at 40, not work, not claim your SW benefits, not make any PRSI contributions through work or voluntarily, then you have chosen not to contribute to the "contributory" state pension.

Or would the fact that I resigned and didn't work again and had a low number of PRSI contributions as a result constitute a "cause WITHIN my control", disqualifying me from getting the supplementary pension?

It wouldn't disqualify you from getting the supplementary pension. It would disqualify you from getting your entire 20/80ths which is here, all you would get is the 6,512.19:

Occupational pension - 3,991.86 plus 2,520.33 =6,512.19 ( Plus State pension (PRSI) 11,975.60 - 18,487.79)

You will note that this total far exceeds your pre 1995 counterparts, this is because his 20/80ths was only calculated on his years service, it was not coordinated with the Social Welfare.

Yours is coordinated with the State Pension (formally or otherwise known as the contributory old age pension).

Let's say that both you and your pre 1995 counterpart didn't retire, say you both worked or became self employed and you both made Class A PRSI contributions until you were both 60.

At that age your pre-1995 counterpart would still only receive his 12,500 pension from your employer, you on the other hand would receive the 18,487.79.

You are both receiving your pension entitlement of 20/80ths - it's just calculated differently for each of you.

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.

No, it is payable at age 60 if you have enough PRSI contributions, it is coordinated in your pension calculations.

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

No, it is taken into account for the COAP which is incorporated into your pension calculation and payable at 60 when your pension entitlement kick in, although I would check and make sure there isn't a "cap" on the voluntary contributions you can "buy".
The supplementary pension is only applicable if you haven't made enough contributions and are "short" on the PRSI part of your pension.

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

No. If you stopped making PRSI contributions at age 40, then you are not entitled to the contributory old age pension (State pension part of your defined benefit pension).

The supplementary pension will not replace a contributory pension, that you are not entitled to because you did not contribute to it.

japester · 17 Feb 2016

ppmeath said:
I wanted to just clarify some issues because the more the thread evolved the more informed we all became.

I didn't get around to dealing fully with this post from The Ghoul.

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

The most important part of this sentence is that you are no longer making any Class A PRSI contributions.

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

You will be entitled to the same benefits as the pre 1995 employee which is 20/80ths, who on a salary of (example) 50k, will receive 20/80ths based on his service, so say 12,500 per annum.

The method for calculating your pension is now different as in it is co-ordinated with your PRSI contributions.

But if I am a post 1995 public servant, would I get a supplementary pension on top of my occupational pension to bring me up to a total pension 20/80ths.

Now this is the difficult part that I cannot seem to get across to some people here. You are entitled to get your 20/80ths on the day of your retirement - which in your case is 60.

Your employer assumes on calculations that you are fully insured through your PRSI contributions and those contributions deem you eligible for a range of payments, JSB, IB and the State pension (or COAP).

Your employer will pay you your "occupational" part of your pension and the SW will pay you the "State pension" part, which is currently 230.30pw or 11,975.60.

They will use the same formula as I applied to Japsters situation, in your situation based on (example) 50k salary on retirement here:

Your actual Remuneration at retirement =€50,000

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

Pensionable remuneration = €50,000 (Actual reckonable) = 20 years pension = 1/200 x pensionable remuneration up to 39,918.66 x service (20 years) 3,991.86 - plus 1/80th balance in excess of €39,918.66 x service (20years) = 2,520.33

Occupational pension - 3,991.86 plus 2,520.33 = 6,512.19 ( Plus State pension (PRSI) 11,975.60 - 18,487.79)

Both you and your pre-1995 counterpart began working at 20, you both left the service at 40 and you both did not work again.

You are both entitled to 20/80ths. Your pre 1995 counterparts 20/80ths is based only on actual years service, he never paid a Class A stamp so his 20/80ths will be approximately 12,500 (25% of 50k).

Your 20/80ths is calculated as above, however, because you did not pay any more PRSI Class A contributions, your 20/80ths is 6,512.19.

In my example both the pre 95 and post 95 are public servants 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.

You are entitled to social welfare if you leave at 40, because you voluntarily left, there is a penalty of a number of weeks (last I heard it was 9 unless they changed it), you are entitled to JSB and a range of other benefits.

So I do my back garden thing and then when I reach 60 as a post 95er I get my preserved benefit occupational pension and also apply for JSB/JSA. I am not available for work and have assets so I am refused.

You won't be eligible for JSB because you haven't made any PRSI contributions from 40 - 60, I posted the eligibility conditions in an earlier post.

I should then get the supplementary pension which means that my total pension is no worse or better than that of a pre 95er.

You won't be eligible for the supplementary pension because you chose not to make any PRSI contributions.

As pointed out above I may still be at a disadvantage if I am precluded from working while claiming the supplementary pension compared to the pre 95er who is not precluded from working while claiming his occupational pension.

If the pre 1995er didn't work again and didn't pay any Class A PRSI contributions and claims his occupational pension at 60, then why would he be excluded from working?

"But this would be no big deal for me seeing as I wouldn't want to work."

If you chose to retire at 40, not work, not claim your SW benefits, not make any PRSI contributions through work or voluntarily, then you have chosen not to contribute to the "contributory" state pension.

Or would the fact that I resigned and didn't work again and had a low number of PRSI contributions as a result constitute a "cause WITHIN my control", disqualifying me from getting the supplementary pension?

It wouldn't disqualify you from getting the supplementary pension. It would disqualify you from getting your entire 20/80ths which is here, all you would get is the 6,512.19:

Occupational pension - 3,991.86 plus 2,520.33 =6,512.19 ( Plus State pension (PRSI) 11,975.60 - 18,487.79)

You will note that this total far exceeds your pre 1995 counterparts, this is because his 20/80ths was only calculated on his years service, it was not coordinated with the Social Welfare.

Yours is coordinated with the State Pension (formally or otherwise known as the contributory old age pension).

Let's say that both you and your pre 1995 counterpart didn't retire, say you both worked or became self employed and you both made Class A PRSI contributions until you were both 60.

At that age your pre-1995 counterpart would still only receive his 12,500 pension from your employer, you on the other hand would receive the 18,487.79.

You are both receiving your pension entitlement of 20/80ths - it's just calculated differently for each of you.

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.

No, it is payable at age 60 if you have enough PRSI contributions, it is coordinated in your pension calculations.

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

No, it is taken into account for the COAP which is incorporated into your pension calculation and payable at 60 when your pension entitlement kick in, although I would check and make sure there isn't a "cap" on the voluntary contributions you can "buy".
The supplementary pension is only applicable if you haven't made enough contributions and are "short" on the PRSI part of your pension.

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

No. If you stopped making PRSI contributions at age 40, then you are not entitled to the contributory old age pension (State pension part of your defined benefit pension).

The supplementary pension will not replace a contributory pension, that you are not entitled to because you did not contribute to it.

Hi ppmmeath, there's one thing I can't understand about the case outlined here. You state "Your 20/80ths is calculated as above, however, because you did not pay any more PRSI Class A contributions, your 20/80ths is 6,512.19." You indicate that because the post 95er stopped making PRSI contributions at age 40 that they are not entitled to any State Pension (PRSI) portion of the pension. However, in my estimation, if this person has been contributing for a whole 20 years then surely that person would have (say) a yearly average PRSI contribution between 20 and 29 giving them a personal weekly rate of €196 and thus an approximate yearly PRSI pension worth €10192 from age 60. Or am I missing something completely obvious here?

ppmeath · 17 Feb 2016

japester said:
Hi ppmmeath, there's one thing I can't understand about the case outlined here. You state "Your 20/80ths is calculated as above, however, because you did not pay any more PRSI Class A contributions, your 20/80ths is 6,512.19." You indicate that because the post 95er stopped making PRSI contributions at age 40 that they are not entitled to any State Pension (PRSI) portion of the pension. However, in my estimation, if this person has been contributing for a whole 20 years then surely that person would have (say) a yearly average PRSI contribution between 20 and 29 giving them a personal weekly rate of €196 and thus an approximate yearly PRSI pension worth €10192 from age 60. Or am I missing something completely obvious here?

Hi Japster, great question and this arose in Meath Ladys situation.

3. What are the social insurance conditions I must satisfy to qualify for State pension (contributory)?
To qualify for State pension (contributory) you must have

started paying social insurance before reaching age 56

and

paid at least 520 full rate social insurance contributions (if you turn 66 before 6th April 2012 you need 260 paid full rate contributions)

and

a yearly average of at least 48 paid and/or credited full rate contributions from 1979 to the end of the contribution year before you reach age 66

or

a yearly average of at least 10 paid and/or credited full rate contributions from 1953 (or the year you started insurable employment, if later) to the end of the contribution year before you reach age 66.

-------------------------

It isn't your "total PRSI" contributions paid divided by the amount of years you worked to give you an "average yearly rate".

It is a yearly average of at least 48 paid/and or credited full rate contributions AND 520 contributions from 1979.

If you entered the workforce at 18, then for every year you must have paid a yearly average of 48 PRSI contributions.

-------------------------

I want to refer you back to Early Riser's interpretation on your situation:

At 60 you would be eligible to receive an occupational pension of €17120 (as calculated by the Pension Modeller for your category of employment: (Firstly this is incorrect, the modeller does not show that occupational pension).

You may also be entitled to a Supplementary Pension of €9120, payable also by your employer on application to them by you.

He is telling you that on your retirement, after completing your full service and on paying 40 years PRSI contributions, retiring on a salary of 70k with a full pension entitlement of half your final salary - that you are only entitled to €17,120.00 on retirement. Your pre-1995 counterpart walked away after 40 years with €35,000.

He is then telling you that to make up that huge shortfall you have to apply for a supplementary pension of €9,120 which still only gives you €26,240, which is still leaving you short of €8,760.

Then he is telling you that in order to get that supplementary pension, that you have to apply for any SW benefits and you only get the supplementary pension if you don't qualify for any.

If we follow his logic, then how could you not be entitled to any SW entitlement when you have paid your full PRSI for 40 years?

Then he says that the one exception to the "if you are not entitled to any SW entitlement" is JSB (Which is a SW entitlement).

So again, you can now claim JSB and using today's rate of JSB which is €188 a week or €9,776 on top of your occupational pension of €17,120 which now brings you to €26,896, still short of €8,104.00.

Remember that the aim was to equalise you to the pension position of your pre 1995 counterpart who worked for 40 years, didn't make any Class A PRSI contributions and had the same entitlement to 40/80ths of his final salary of €70,000 = €35,000.

Let's continue with his logic. On being entitled to JSB on top of your occupational pension - which still leaves you short of a huge chunk of your pension, he then says:

"In this event the Supplementary pension would not be paid while you are obtaining benefit (9 months) but would be payable afterwards while you are obtaining the Supplementary. "

So, you use up your entitlement to JSB and now receive the supplementary pension of €9,120 on top of your occupational pension of €17,120 = €26,240 - €8,760.00 LESS then your pre-1995 counterpart.

Then, he maintains:

When you reach State Pension age (be it 67 or 68 in your case) you MUST then apply for the State Pension. If the State Pension granted should happen to be less than €9120 (unlikely) you will continue to receive a smaller Supplementary pension to top you up to this amount.

Then:

If the State pension is equal to or greater than €9120 then you lose the Supplementary - but continue with the €17120 of course.

So using his logic your state pension, which is at today's rate 230.30 or €11,975.60 is now added to your "occupational pension" of €17,120.00 now giving you a yearly pension of €29,095.60, which is still €5,904.40 short of your pre 1995 counterparts pension.

He said earlier in the thread:

I do not see why you would not be eligible for a supplementary pension at 60 to bring you up to the rate equivalent to a pre 1995 scheme retiree

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

Your pre 1995 counterpart walked away with a €35,000 pension after 40 years. Yet even taking his interpretation of the reason for the supplementary pension as correct, from the day you retire at 60 up until age 67, when your COAP kicks in - you will never receive the same €35,000 that your pre 1995 counterpart walked away with. And even when your entitlement to a full COAP kicks in - you will still not be receiving your €35,000 pension.

If we go back to the hypothetical situation as outlined by The Ghoul and we accept that he is has the same entitlement of 20/80ths at 60 as the pre 1995 retiree on a 50k salary and accept that the pre 1995 retiree is entitled to 12,500.

If The Ghoul is also entitled to 12,500, then why would he need a supplementary pension? What could he be supplementing?

If, for example, he was then entitled to a State Pension, but he was not at the age of entitlement until 67 and (according to Early Riser), was now entitled to a supplementary pension to "fill" the gap from 60 - 67, then this rate is almost 12,000 a year - on top of his 12,500.

So now he is receiving 12,000 MORE then his pre-1995 counterpart? Sorry, but this is not how it works.

EDIT; Japster, as you correctly pointed out earlier - the SW rate has now increased from 230.30 to 233.30. So you would have to adjust the model I gave you earlier to reflect this.

japester · 17 Feb 2016

ppmeath said:
Hi Japster, great question and this arose in Meath Ladys situation.

3. What are the social insurance conditions I must satisfy to qualify for State pension (contributory)?
To qualify for State pension (contributory) you must have

started paying social insurance before reaching age 56

and

paid at least 520 full rate social insurance contributions (if you turn 66 before 6th April 2012 you need 260 paid full rate contributions)

and

a yearly average of at least 48 paid and/or credited full rate contributions from 1979 to the end of the contribution year before you reach age 66

or

a yearly average of at least 10 paid and/or credited full rate contributions from 1953 (or the year you started insurable employment, if later) to the end of the contribution year before you reach age 66.

-------------------------

It isn't your "total PRSI" contributions paid divided by the amount of years you worked to give you an "average yearly rate".

It is a yearly average of at least 48 paid/and or credited full rate contributions AND 520 contributions from 1979.

If you entered the workforce at 18, then for every year you must have paid a yearly average of 48 PRSI contributions.

-------------------------

I want to refer you back to Early Riser's interpretation on your situation:

At 60 you would be eligible to receive an occupational pension of €17120 (as calculated by the Pension Modeller for your category of employment: (Firstly this is incorrect, the modeller does not show that occupational pension).

You may also be entitled to a Supplementary Pension of €9120, payable also by your employer on application to them by you.

He is telling you that on your retirement, after completing your full service and on paying 40 years PRSI contributions, retiring on a salary of 70k with a full pension entitlement of half your final salary - that you are only entitled to €17,120.00 on retirement. Your pre-1995 counterpart walked away after 40 years with €35,000.

He is then telling you that to make up that huge shortfall you have to apply for a supplementary pension of €9,120 which still only gives you €26,240, which is still leaving you short of €8,760.

Then he is telling you that in order to get that supplementary pension, that you have to apply for any SW benefits and you only get the supplementary pension if you don't qualify for any.

If we follow his logic, then how could you not be entitled to any SW entitlement when you have paid your full PRSI for 40 years?

Then he says that the one exception to the "if you are not entitled to any SW entitlement" is JSB (Which is a SW entitlement).

So again, you can now claim JSB and using today's rate of JSB which is €188 a week or €9,776 on top of your occupational pension of €17,120 which now brings you to €26,896, still short of €8,104.00.

Remember that the aim was to equalise you to the pension position of your pre 1995 counterpart who worked for 40 years, didn't make any Class A PRSI contributions and had the same entitlement to 40/80ths of his final salary of €70,000 = €35,000.

Let's continue with his logic. On being entitled to JSB on top of your occupational pension - which still leaves you short of a huge chunk of your pension, he then says:

"In this event the Supplementary pension would not be paid while you are obtaining benefit (9 months) but would be payable afterwards while you are obtaining the Supplementary. "

So, you use up your entitlement to JSB and now receive the supplementary pension of €9,120 on top of your occupational pension of €17,120 = €26,240 - €8,760.00 LESS then your pre-1995 counterpart.

Then, he maintains:

When you reach State Pension age (be it 67 or 68 in your case) you MUST then apply for the State Pension. If the State Pension granted should happen to be less than €9120 (unlikely) you will continue to receive a smaller Supplementary pension to top you up to this amount.

Then:

If the State pension is equal to or greater than €9120 then you lose the Supplementary - but continue with the €17120 of course.

So using his logic your state pension, which is at today's rate 230.30 or €11,975.60 is now added to your "occupational pension" of €17,120.00 now giving you a yearly pension of €29,095.60, which is still €5,904.40 short of your pre 1995 counterparts pension.

He said earlier in the thread:

I do not see why you would not be eligible for a supplementary pension at 60 to bring you up to the rate equivalent to a pre 1995 scheme retiree

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

Your pre 1995 counterpart walked away with a €35,000 pension after 40 years. Yet even taking his interpretation of the reason for the supplementary pension as correct, from the day you retire at 60 up until age 67, when your COAP kicks in - you will never receive the same €35,000 that your pre 1995 counterpart walked away with. And even when your entitlement to a full COAP kicks in - you will still not be receiving your €35,000 pension.

If we go back to the hypothetical situation as outlined by The Ghoul and we accept that he is has the same entitlement of 20/80ths at 60 as the pre 1995 retiree on a 50k salary and accept that the pre 1995 retiree is entitled to 12,500.

If The Ghoul is also entitled to 12,500, then why would he need a supplementary pension? What could he be supplementing?

If, for example, he was then entitled to a State Pension, but he was not at the age of entitlement until 67 and (according to Early Riser), was now entitled to a supplementary pension to "fill" the gap from 60 - 67, then this rate is almost 12,000 a year - on top of his 12,500.

So now he is receiving 12,000 MORE then his pre-1995 counterpart? Sorry, but this is not how it works.

EDIT; Japster, as you correctly pointed out earlier - the SW rate has now increased from 230.30 to 233.30. So you would have to adjust the model I gave you earlier to reflect this.

Hi ppmmeath, you omitted one vital nugget of information from the welfare.ie website in relation to eligibility for State Pension (Contributory). From their website it states:

3. What are the social insurance conditions I must satisfy to qualify for State pension (contributory)?
To qualify for State pension (contributory) you must have

started paying social insurance before reaching age 56

and

paid at least 520 full rate social insurance contributions (if you turn 66 before 6th April 2012 you need 260 paid full rate contributions)

and

a yearly average of at least 48 paid and/or credited full rate contributions from 1979 to the end of the contribution year before you reach age 66

or

a yearly average of at least 10 paid and/or credited full rate contributions from 1953 (or the year you started insurable employment, if later) to the end of the contribution year before you reach age 66.

Note: You need a yearly average of 10 full rate contributions to get the minimum payment rate of State pension (contributory). You need a yearly average of 48 full rate contributions to get the maximum payment rate. Please see Question 1 for weekly rates of payment.

You omitted this vital note at the end. Basically anyone with a yearly average of 10 full-rate contribs gets the absolute minimum payment of €93.20 per week while anyone with at least 48 gets the max of €233.30 per week. So in the case I referred to where someone worked for 20 whole years and paid full-rate (A) contribs, their yearly average would be calculated as : Total Contributions & Credits/Total Contribution Years. For someone paying full-rate contribs for 20 years, their Total Contributions & Credits will be 20x52 = 1040 and if they start work at say 20 then the Total Contribution Years would be 45 (retirement age - 1 - year when contribs first paid), giving a yearly average of 23.111 - this would place them in the 20-29 bracket in terms of payment, which would see them getting €198.60 per week State Pension (Contributory). This only makes sense when you think about it really, otherwise you'd say this person was really paying 20 years contribs for absolutely nothing (granted there would have been other benefits available but it couldn't be the case that this person would see no benefit in terms of getting at least a percentage of the State Pension (Contributory).

Also you refered to my own situation above. There are some differences alright in terms of what the pension modeller gives me for my occupational pension part compared to what Early Riser calculated but remember that all of Early Risers calculations are based on the fact that I am retiring at 60 having completed 30 years of service. Your figures above are indicating that I would have completed 40 years, which is not the case. I think I have pretty much figured out my own situation in relation to my pension (hopefully) at this stage thanks to both yourself and Early Riser, but I definitely think there is a discrepancy in what you were saying about the person retiring at 40, having paid 20 full years of Class A contributions not being entitled to any State Pension (Contributory) whatsoever.

ppmeath · 17 Feb 2016

"You omitted this vital note at the end. Basically anyone with a yearly average of 10 full-rate contribs gets the absolute minimum payment of €93.20 per week while anyone with at least 48 gets the max of €233.30 per week. "

Sorry Japster, the omission wasn't intentional, but I was referring to the example where a post 1995 employee would be entitled to a full PRSI pension to "bring him to the full rate of pension like his pre 1995 counterpart".

I should of course have further clarified on the absolute minimum part, my bad.

"So in the case I referred to where someone worked for 20 whole years and paid full-rate (A) contribs, their yearly average would be calculated as : Total Contributions & Credits/Total Contribution Years. "

Yes.

"For someone paying full-rate contribs for 20 years, their Total Contributions & Credits will be 20x52 = 1040 and if they start work at say 20 then the Total Contribution Years would be 45 (retirement age - 1 - year when contribs first paid), giving a yearly average of 23.111".

Sorry Japster, head a bit melted lol, yes this is correct but, see this part (Which arose in Meath Lady's case).....

"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."

Their contribution years are the years from the time they enter the system until their retirement. They must have at least 10 per year, every year for the 45 years.

But to qualify he also needs:

To qualify for State pension (contributory) you must have

started paying social insurance before reaching age 56

and

paid at least 520 full rate social insurance contributions (if you turn 66 before 6th April 2012 you need 260 paid full rate contributions)

and

a yearly average of at least 48 paid and/or credited full rate contributions from 1979 to the end of the contribution year before you reach age 66

Here is the part I omitted and again, it was not intentional as my focus was on the full pension firstly.

or

a yearly average of at least 10 paid and/or credited full rate contributions from 1953 (or the year you started insurable employment, if later) to the end of the contribution year before you reach age 66.

and

paid at least 520 full rate social insurance contributions (if you turn 66 before 6th April 2012 you need 260 paid full rate contributions)

He has to have an average of 10 years for every year from entrance to the system and 520 contributions.

"(granted there would have been other benefits available but it couldn't be the case that this person would see no benefit in terms of getting at least a percentage of the State Pension (Contributory)."

But he has to contribute to the system, he stopped at 40, he didn't work and contribute a stamp, he wasn't unemployed because he didn't claim JSB, he wasn't ill because he didn't claim IB and he didn't pay voluntary contributions.

He has to pay a minimum of an average of 10 stamps per year, for every year, since he entered the system and he also has to have 520 stamps. He does not have this - what he has is a gaping 20 year hole in his contributions.

(If I can refer you back to Meath Lady's problem, she has a gap that she hopes to fill with the Homemakers credit, because she paid no contributions for those years.. So while she has the 520 contributions, she does not have the minimum yearly average of 10 each year.)

Also you refered to my own situation above. There are some differences alright in terms of what the pension modeller gives me for my occupational pension part compared to what Early Riser calculated but remember that all of Early Risers calculations are based on the fact that I am retiring at 60 having completed 30 years of service.

Ah, I thought you were completing your full service, apologies.

Your figures above are indicating that I would have completed 40 years, which is not the case. I think I have pretty much figured out my own situation in relation to my pension (hopefully) at this stage thanks to both yourself and Early Riser.

Your actual Remuneration at retirement =€70,000

Current CSP rate at retirement (Feb 2016) is 233.30 x 52 = 12,131.60 x 3.333333 = 40,438.66

Pensionable remuneration = €70,000 (Actual reckonable) = 30 years pension = 1/200 x pensionable remuneration up to 40,438.66 x service (30 years) 6,065.79 - plus 1/80th balance in excess of 40,438.66 x service (30 years) = 11,085.50 - Plus State pension (PRSI) 11,975.60 = 29,292.82.

"But I definitely think there is a discrepancy in what you were saying about the person retiring at 40, having paid 20 full years of Class A contributions not being entitled to any State Pension (Contributory) whatsoever."

I hope this post clarifies it for you.

allencat3 · 17 Feb 2016

Hi ppmeath - your guess re my salary / DOB are correct.

Having digested the comments re the pros/cons of IHR and ER, and after downloading/reading the Circular 22/2007 re IHR in the CS, may I ask questions to those on this forum who have/had commenced IHR? Ref to Part 1, point 2 in the circular, "a civil servant who applies to retire early on the grounds of ill-health is required to provide the CMO's Office with a completed IHR(10 form along with a medical report detailing his/her diagnosis, treatment and prognosis. The IHR (1) form must be completed by the current treating doctor, whom the civil servant is attending on an ongoing basis."
My medical problem is degenerative eye disease which could not, according to my eye consultant and surgeon, be resolved and making it quite difficult to read - at a reasonable pace - both the digital and printed text, affecting my work performance, as my current job involves 90% computer work. To compound difficulty of obtaining alternative work, I also possess, since my birth, a profound hearing loss, thus ruling out telephone work as an option. Returning to Circ 22/2007, point 5, "in considering whether a civil servant is permanently disabled, the CMO will take into account whether reasonable treatment options have been explored, whether workplace accommodation (e.g. part-time work) has been attempted, and whether redeployment (to a similar post) has been considered by management."
Last year, after assessment by the CMO's occupational nurse re my workplace and VDU, my manager informed the nurse that there's no other suitable work in my immediate section for me, and IT had been approached re the VDU/monitor settings, but not much assistance to relieve eye-strain. Over the past month, two eye procedures had been carried out to lessen, with very little success, the 'fogging' of the eye capsule. A couple of days ago, I received word from my consultant's secretary that a detailed retinal examination followed by consultation is scheduled for June of this year. Maybe I could take this opportunity to ask the consultant to provide a medical report to accompany the IHR form for the CMO's Office.

allencat3

ppmeath · 17 Feb 2016

Hi ppmeath - your guess re my salary / DOB are correct.

Hi Allencat, Early Riser guessed those details.

Having digested the comments re the pros/cons of IHR and ER, and after downloading/reading the Circular 22/2007 re IHR in the CS, may I ask questions to those on this forum who have/had commenced IHR?

A friend of mine is going through the process, I could be shortly.

She had to go through the entire process and provide medical reports from her treating doctors to support her application.
She was refused and she appealed and was granted IHR.

She is currently waiting for her pension calculation.

japester · 17 Feb 2016

ppmeath said:
"You omitted this vital note at the end. Basically anyone with a yearly average of 10 full-rate contribs gets the absolute minimum payment of €93.20 per week while anyone with at least 48 gets the max of €233.30 per week. "

Sorry Japster, the omission wasn't intentional, but I was referring to the example where a post 1995 employee would be entitled to a full PRSI pension to "bring him to the full rate of pension like his pre 1995 counterpart".

I should of course have further clarified on the absolute minimum part, my bad.

"So in the case I referred to where someone worked for 20 whole years and paid full-rate (A) contribs, their yearly average would be calculated as : Total Contributions & Credits/Total Contribution Years. "

Yes.

"For someone paying full-rate contribs for 20 years, their Total Contributions & Credits will be 20x52 = 1040 and if they start work at say 20 then the Total Contribution Years would be 45 (retirement age - 1 - year when contribs first paid), giving a yearly average of 23.111".

No, the total contribution years are 45. 20 is the amount of years they contributed out of the 45.

"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."

Their contribution years are the years from the time they enter the system until their retirement. They must have at least 10 per year, every year for the 45 years.

So the calculation is 20x52 = 1040/45 = 23.11 a year.

But to qualify he also needs:

To qualify for State pension (contributory) you must have

started paying social insurance before reaching age 56

and

paid at least 520 full rate social insurance contributions (if you turn 66 before 6th April 2012 you need 260 paid full rate contributions)

and

a yearly average of at least 48 paid and/or credited full rate contributions from 1979 to the end of the contribution year before you reach age 66

Here is the part I omitted and again, it was not intentional as my focus was on the full pension firstly.

or

a yearly average of at least 10 paid and/or credited full rate contributions from 1953 (or the year you started insurable employment, if later) to the end of the contribution year before you reach age 66.

and

paid at least 520 full rate social insurance contributions (if you turn 66 before 6th April 2012 you need 260 paid full rate contributions)

He has to have an average of 10 years for every year from entrance to the system and 520 contributions.

"(granted there would have been other benefits available but it couldn't be the case that this person would see no benefit in terms of getting at least a percentage of the State Pension (Contributory)."

But he has to contribute to the system, he stopped at 40, he didn't work and contribute a stamp, he wasn't unemployed because he didn't claim JSB, he wasn't ill because he didn't claim IB and he didn't pay voluntary contributions.

He has to pay a minimum of an average of 10 stamps per year, for every year, since he entered the system and he also has to have 520 stamps. He does not have this - what he has is a gaping 20 year hole in his contributions.

(If I can refer you back to Meath Lady's problem, she has a gap that she hopes to fill with the Homemakers credit, because she paid no contributions for those years.. So while she has the 520 contributions, she does not have the minimum yearly average of 10 each year.)

Also you refered to my own situation above. There are some differences alright in terms of what the pension modeller gives me for my occupational pension part compared to what Early Riser calculated but remember that all of Early Risers calculations are based on the fact that I am retiring at 60 having completed 30 years of service.

Ah, I thought you were completing your full service, apologies.

Your figures above are indicating that I would have completed 40 years, which is not the case. I think I have pretty much figured out my own situation in relation to my pension (hopefully) at this stage thanks to both yourself and Early Riser.

Your actual Remuneration at retirement =€70,000

Current CSP rate at retirement (Feb 2016) is 233.30 x 52 = 12,131.60 x 3.333333 = 40,438.66

Pensionable remuneration = €70,000 (Actual reckonable) = 30 years pension = 1/200 x pensionable remuneration up to 40,438.66 x service (30 years) 6,065.79 - plus 1/80th balance in excess of 40,438.66 x service (30 years) = 11,085.50 - Plus State pension (PRSI) 11,975.60 = 29,292.82.

"But I definitely think there is a discrepancy in what you were saying about the person retiring at 40, having paid 20 full years of Class A contributions not being entitled to any State Pension (Contributory) whatsoever."

I hope this post clarifies it for you.

Hi ppmmeath, it looks like we differ on our interpretation of the "yearly average" here!! You are saying that it means the person must have a yearly average of at least 10 full-rate contribs in order to qualify for the minimum State Pension (Contrib) of €93.20 but that the person must have made at least 10 contributions each and every year since they first made a contribution in order to be eligible for this? Sure that would then mean no-one would be eligible for the State Pension (Contrib) unless they ensured they had made at least 10 contribs each and every single year since they first started working - how many people would really be in this boat? To me it just doesn't make sense at all that someone who contributed for a full 20 years (1040 contribs) will not get any State Pension (contrib) while someone say who made only a handful of contirbutions, say on average 13, every year for 45 years (585 contributions) would then be entitled to €93.20 - that surely cannot be correct? Maybe there is someone reading this that has experience of what we are talking about and can enlighten us further.

You also say

"But he has to contribute to the system, he stopped at 40, he didn't work and contribute a stamp, he wasn't unemployed because he didn't claim JSB, he wasn't ill because he didn't claim IB and he didn't pay voluntary contributions.

He has to pay a minimum of an average of 10 stamps per year, for every year, since he entered the system and he also has to have 520 stamps. He does not have this - what he has is a gaping 20 year hole in his contributions."

In my view this person has definitely "contributed" to the system - he did so over a 20 year period when he worked! I do see the gaping hole in his contributions alright but surely the 20 years he has contributed must mean he has to be entitled to a percentage of the full State Pension (Contrib) - €198.60/week by my own calculations earlier. I just cannot fathom that his 20 years would be worth nothing in terms of getting State Pension (Contrib) just because he failed to make any further PRSI contribs up to retirement age.

Does that mean, were I to take retirement at 55 and leave off my own steam for 5 years until I reach 60 that I would then not be entitled to State Pension (Contrib) because I never made any contributions between 55 and 60? It sounds bonkers if it were true!

Bridging the gap between 60 and oap

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