Bridging the gap between 60 and oap

[Early Riser]

your guess re my salary / DOB are correct.

Hi Allencat3. Do you mean this guess ?

"your salary is in region of €36 K ?
"Is your date of birth June 1953 ?"

If so, it suggests that The Occupational Pension estimate that obtained from your employer last year was broadly correct, provided that

- The totting up of your service record was correct - but you have probably checked this.

- They were allocating the correct number of years of notional service. I am having a little difficulty getting my mind around this. You were born in June 1953 so in August 2015 you were aged 62 years and 2 months. That left 2 years and 10 months until your 65th birthday. Yet the estimate suggests 3 years and 10 months (approx). This suggests that they are allowing you up until the end of your 65th year. Is this the correct procedure - I simply don't know but I would be curious if someone could enlighten ? Alternatively it is a mistake.

Anyway, onto your substantial point. I am sorry to hear about your eye disease and I regret that I can offer no advice on the procedure for IHR. Hopefully others can help.

Best of luck with it all.

 

[Early Riser]

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.

Hello again Japester - And no doubt my calculations are incorrect ! I would be interested in exploring this further, purely as a learning exercise, if you are interested ? Here is how I reached my figures using the modeller.

Assumptions

DOB 1/2/1957
Projected retirement date : 1/2/2017
Salary €70000
Service to date 29 years 18 days
Projected service to retirement 350 days
(Total Approx 30 years)

Result using the post 95 Class A Modeller

Occupational Pension €17124
Gratuity €78772

Supplementary Pension

Running the same figure through the pre-95 Class D modeller gave the same estimate for gratuity and an Occupational Pension estimate of €26257.

My understanding is that the Supplementary Pension is the difference between 26257 and 17124, ie €9133.

This Supplementary amount would bring you up to the same level as the Class D person. (Of course this Supplementary is only payable if you meet the other conditions applied post 95, eg not in gainful employment, not eligible for, or obtaining, Social Welfare such as Jobseekers, Illness/Disability, State Old Age pension) . If you were obtaining any of these benefits simultaneously you would obviously be greatly advantaged over the Class D person. The Class A person can be somewhat advantaged though, ie, if the level of Social Welfare payable in this instance were to be greater than €9133. Does this compensate for the restriction of not being able to work while obtaining the Supplementary ? I guess this depends on each person's own circumstance.

Anyway, as regards your own estimate, which is different, I would be interested (if you have time) in learning how you went about it and what results you reached. As I say, I am probably getting it wrong and would be interested in figuring it out.
.

 

[ppmeath]

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?

• 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 does look like we differ Japster, my reading of the highlighted section above is that from the year you start working and paying a PRSI stamp, in this case 1953, that you need a yearly average of at least 10 stamps to the end of your contribution year before you reach 66.

Furthermore, it is also how I am interpreting the "normal average rule" which came to light in Meath Lady's situation, we even with her 10 years of contributions, (520), she may not be eligible.

"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."


For example, for gross weekly earnings of €377:

1. One-sixth of your earnings over €352.01 is €377- €352.01 = €24.99, divided by 6 = €4.17.
2. Subtract this from the maximum credit of €12, giving you a credit of €7.83.
3. The basic PRSI charge is 4% of €377 = €15.08.
4. You will pay €7.25 PRSI weekly in 2016 (€15.08 minus your €7.83 PRSI credit).

This is the minimum wage, but think about this for a moment.

Someone 50k would pay (guesstimate) €30 a week?

€30/10/45 = 13,500 over your entire working life. This gets you your unemployment, your illness, maternity leave, medical card and a minimum pension of almost 5,000 a year for the rest of your life.

PRSI is an "insurance" policy, if you pay into it, then you are eligible for the benefits that you pay into, if you stop paying for a period of time, then if anything happens to you, then you can't go back and try to claim off the policy that you stopped paying into.

You need the minimum yearly payments, to keep you in insurance.

We don't close enough to fund the SW pensions bill as it is.

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?

Flip that around, if every single person only needed to make 10 contributions over a 20 year period at a cost of 13,500 over 45 years and receive all those benefits - we are in a bad way now, but this would be total bankruptcy - this is why the PS pension model had to change in 1995.


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 contributions, 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.

It sounds a lot in years, but it is your working life and we all (most of us) work and pay our taxes throughout our lives, it isn't a lot financially.


"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.

So, your view is that his 20 years of 52 stamps - 1040 entitle him to all those benefits and that he can then apply and be entitled for a pension of over €10,000 a year from 60 until the day he dies?

I haven't had time to do the calculations for a PRSI contribution as above - but if someone on the minimum wage pays €7 per week, then even if this worker was paying 7 times that = €50 a week, then to avail of this very, very, very generous entitlement he would, over 20 years pay:

€52,000

If he lives until he is 70 he will have received 100,000 euro in pension payments alone.


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."

I certainly can to be honest.

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!

You have to calculate your entitlements using the formula.

If you first entered the workforce at age 20 (for example) and entered both the PS (insurable employment), and worked for 25 years leaving the workforce, taking early retirement, then we are moving onto another issue - preserved benefits, so I have absolutely no idea.

That is something that you would really have to take to your employer and ask them do they take into account the full rate of OAP (and your eligibility is determined by your PRSI position, then you would have to ask the SW if you would be in benefit at 60).

But here's the thing, if you just left then you would be entitled to JSB for two years (this is what keeps you insured) or you could buy the PRSI if you were short.

 

[japester]

Hello again Japester - And no doubt my calculations are incorrect ! I would be interested in exploring this further, purely as a learning exercise, if you are interested ? Here is how I reached my figures using the modeller.

Assumptions

DOB 1/2/1957
Projected retirement date : 1/2/2017
Salary €70000
Service to date 29 years 18 days
Projected service to retirement 350 days
(Total Approx 30 years)

Result using the post 95 Class A Modeller

Occupational Pension €17124
Gratuity €78772

Supplementary Pension

Running the same figure through the pre-95 Class D modeller gave the same estimate for gratuity and an Occupational Pension estimate of €26257.

My understanding is that the Supplementary Pension is the difference between 26257 and 17124, ie €9133.

This Supplementary amount would bring you up to the same level as the Class D person. (Of course this Supplementary is only payable if you meet the other conditions applied post 95, eg not in gainful employment, not eligible for, or obtaining, Social Welfare such as Jobseekers, Illness/Disability, State Old Age pension) . If you were obtaining any of these benefits simultaneously you would obviously be greatly advantaged over the Class D person. The Class A person can be somewhat advantaged though, ie, if the level of Social Welfare payable in this instance were to be greater than €9133. Does this compensate for the restriction of not being able to work while obtaining the Supplementary ? I guess this depends on each person's own circumstance.

Anyway, as regards your own estimate, which is different, I would be interested (if you have time) in learning how you went about it and what results you reached. As I say, I am probably getting it wrong and would be interested in figuring it out.
.

Hi Early Riser, my apologies to you as the figures you reached through the pension modeller are exactly tha same as what I get for 30 years service, bar a few shillings. So you have absolutely done nothing wrong in using the modeller! It looks to me that I will get that occupational pension on reaching 60 and (according to the website for the Dept of Education who have their own pension modeller at ) also receive the supplementary pension that you specify above from 60-68. Then once I reach 68, supplementary will cease as I will (hopefully) be entitled to receive the full rate of COAP at that point and, like you say, maybe gain a few bob on the supplmentary pension. As ppmmeath says, and I believe you also mentioned it before, I will need to ensure that my PRSI contributions continue should I decide to perhaps leave a little earlier than 60 so that I have the "yearly average" bit sorted for full COAP!

 

[japester]

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?

• 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 does look like we differ Japster, my reading of the highlighted section above is that from the year you start working and paying a PRSI stamp, in this case 1953, that you need a yearly average of at least 10 stamps to the end of your contribution year before you reach 66.

Furthermore, it is also how I am interpreting the "normal average rule" which came to light in Meath Lady's situation, we even with her 10 years of contributions, (520), she may not be eligible.

"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."


For example, for gross weekly earnings of €377:

1. One-sixth of your earnings over €352.01 is €377- €352.01 = €24.99, divided by 6 = €4.17.
2. Subtract this from the maximum credit of €12, giving you a credit of €7.83.
3. The basic PRSI charge is 4% of €377 = €15.08.
4. You will pay €7.25 PRSI weekly in 2016 (€15.08 minus your €7.83 PRSI credit).

This is the minimum wage, but think about this for a moment.

Someone 50k would pay (guesstimate) €30 a week?

€30/10/45 = 13,500 over your entire working life. This gets you your unemployment, your illness, maternity leave, medical card and a minimum pension of almost 5,000 a year for the rest of your life.

PRSI is an "insurance" policy, if you pay into it, then you are eligible for the benefits that you pay into, if you stop paying for a period of time, then if anything happens to you, then you can't go back and try to claim off the policy that you stopped paying into.

You need the minimum yearly payments, to keep you in insurance.

We don't close enough to fund the SW pensions bill as it is.

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?

Flip that around, if every single person only needed to make 10 contributions over a 20 year period at a cost of 13,500 over 45 years and receive all those benefits - we are in a bad way now, but this would be total bankruptcy - this is why the PS pension model had to change in 1995.


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 contributions, 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.

It sounds a lot in years, but it is your working life and we all (most of us) work and pay our taxes throughout our lives, it isn't a lot financially.


"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.

So, your view is that his 20 years of 52 stamps - 1040 entitle him to all those benefits and that he can then apply and be entitled for a pension of over €10,000 a year from 60 until the day he dies?

I haven't had time to do the calculations for a PRSI contribution as above - but if someone on the minimum wage pays €7 per week, then even if this worker was paying 7 times that = €50 a week, then to avail of this very, very, very generous entitlement he would, over 20 years pay:

€52,000

If he lives until he is 70 he will have received 100,000 euro in pension payments alone.


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."

I certainly can to be honest.

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!

You have to calculate your entitlements using the formula.

If you first entered the workforce at age 20 (for example) and entered both the PS (insurable employment), and worked for 25 years leaving the workforce, taking early retirement, then we are moving onto another issue - preserved benefits, so I have absolutely no idea.

That is something that you would really have to take to your employer and ask them do they take into account the full rate of OAP (and your eligibility is determined by your PRSI position, then you would have to ask the SW if you would be in benefit at 60).

But here's the thing, if you just left then you would be entitled to JSB for two years (this is what keeps you insured) or you could buy the PRSI if you were short.

Thanks again for the feedback ppmmeath, this discussion is really great. I definitely agree with what you are saying about the cost-effectiveness of this scheme and when you put the figures together like 52k in vs 100k out it does appear stark alright and you can easily see why the government are changing pension conditions for new entrants and raising the OAP age to boot - definitely a pensions timebomb ticking away in the background. In my own case, this has opened my eyes to the fact that I need to make sure I keep paying my contributions should I go a few years before 60 though so it has been all worthwhile.

 

[ppmeath]

Best of luck with it Japster.

 

[Early Riser]

Hi Early Riser, my apologies to you as the figures you reached through the pension modeller are exactly tha same as what I get for 30 years service, bar a few shillings. So you have absolutely done nothing wrong in using the modeller! It looks to me that I will get that occupational pension on reaching 60 and (according to the website for the Dept of Education who have their own pension modeller at ) also receive the supplementary pension that you specify above from 60-68. Then once I reach 68, supplementary will cease as I will (hopefully) be entitled to receive the full rate of COAP at that point and, like you say, maybe gain a few bob on the supplmentary pension. As ppmmeath says, and I believe you also mentioned it before, I will need to ensure that my PRSI contributions continue should I decide to perhaps leave a little earlier than 60 so that I have the "yearly average" bit sorted for full COAP!

Japester - As our calculations coincide, hopefully it means that we are both on the right path, rather than a a folie a deux !

Just one other point,though. Leaving at 60 would not necessarily mean that you would qualify for the full rate of COAP at 68. You would still need to meet the qualifying conditions, currently an average yearly rate of 48 contributions, as you have pointed out. You might need to consider signing for credits beyond 60, depending on your contribution history and whatever the qualifying conditions are at that stage. Of course the next lower COAP rate currently in operation is only marginally lower and you may consider you can live with the difference. At any event under current Pension Scheme rules, you would still be required to apply for Jobseekers (or other SW benefit if it should be relevant to you) when you retire at 60.

 

[japester]

Japester - As our calculations coincide, hopefully it means that we are both on the right path, rather than a a folie a deux !

Just one other point,though. Leaving at 60 would not necessarily mean that you would qualify for the full rate of COAP at 68. You would still need to meet the qualifying conditions, currently an average yearly rate of 48 contributions, as you have pointed out. You might need to consider signing for credits beyond 60, depending on your contribution history and whatever the qualifying conditions are at that stage. Of course the next lower COAP rate currently in operation is only marginally lower and you may consider you can live with the difference. At any event under current Pension Scheme rules, you would still be required to apply for Jobseekers (or other SW benefit if it should be relevant to you) when you retire at 60.

Hopefully we are Early Riser and thanks again for all your contributions to the discussion! It's a long way off yet for me but having a decent idea of how the system works means that there (hopefully) won't be any nasty surprises when the time comes around.

 

[allencat3]

allencat3 said: ↑
your guess re my salary / DOB are correct.
Click to expand...
Hi Allencat3. Do you mean this guess ?

↑
"your salary is in region of €36 K ?
"Is your date of birth June 1953 ?"
EasyRider - sorry, I got the names mixed up after scrolling up/down so many posts. Yes, my DOB is June 1953 and salary 35K.
Thanks to you, ppmeath, japesters, et al for the posts re ER, COAP, IHR, etc. - quite overwhelming but worthwhile studying in order to inform myself making the decision during this year.
Kind regards,
allencat3

 

[Meath Lady]

I too would like to thank ppmmeath and early Riser for this minefield of information. I will study it all over the next few months and hopefully be a little wiser before I start asking questions of Social Welfare and my pension department. Once again thanks.

 

[Early Riser]

allencat3 said: ↑
your guess re my salary / DOB are correct.
Click to expand...
Hi Allencat3. Do you mean this guess ?

↑
"your salary is in region of €36 K ?
"Is your date of birth June 1953 ?"
EasyRider - sorry, I got the names mixed up after scrolling up/down so many posts. Yes, my DOB is June 1953 and salary 35K.
Thanks to you, ppmeath, japesters, et al for the posts re ER, COAP, IHR, etc. - quite overwhelming but worthwhile studying in order to inform myself making the decision during this year.
Kind regards,
allencat3

Hello Allencat3 - no worries about names. I just hope you can get your IHR situation sorted out. In relation to that, I have been having a more detailed look at the Pension estimates for IHR that you got form your HR Department (which you provided in Post 106). The figures don't seem to fully correspond with your last estimate (which I guess must have been actually carried out in 2014 or, at least, using 2014 figures).
Here is my go at totting them up. Bear in mind that I didn't consult a calender to get the precise number of days but I hope this is fairly accurate.

13/10/97 to 9/3/99 @100% 512 days
10/3/99 to 30/3/03 (rather than 13 ?) @50% 863 days
1/12/03 to 19/7/07 @73% 968 days
20/7/07 to 30/12/09 @80% 707 days
15/4/13 to 15/6/18 @100% 1886 days

Total days = 4936days = 13.5 years

I have included all possible service from now until your 65th birthday , ie, your projected actual service to 30/9/2016 (your proposed retirement date) plus notional added years from then until 65. For this purpose I have given you an assumed DOB of 15/6/1953.

The total number of years is better than that provided in your last work estimate, which was about 12.8 years (which also assumed full service until 65, actual and notional). Please check these figures for accuracy.

I then took the 13.5 year figure and ran it through the Modeller, giving the following estimate :


Personal Details Allen Cat

Date of Birth 15/6/1953


Projected retirement date at age 65 :15/06/2018 (provided you are granted IHR, you should be able to retire at any time between now and that date without affecting this estimate, eg on your proposed retirement date of 30/9/2016).



Pensionable Service to date : 11 Years and 69 Days
Service from today to retirement :2 Years and 117 Days



Projected future working pattern: 100% (Full Time)



Total reckonable service : 13 Years and 189 Days


Pensionable Remuneration : €35,000 (I presume this is only approximate. Any variation will impact on the estimate).



Your Benefits on retiring at age 65 ( Or on your proposed retirement date of 30/9/2016, if granted notional years under IHR. Based on current salary).

If you retire at age 65 you would receive a once off tax-free retirement gratuity of €17,742, less the deduction of any outstanding contributions. You would also receive a pension of €2,366.

The notional Supplementary pension for this estimate would be for €3548. This Supplementary pension would only be available to you in the event that you fail to qualify for Social Welfare. As you will be signing for SW benefits you will also be awarded Class A credits, which will help maintain your record for State COAP purposes.

Best of luck with the IHR process, Allencat3.

 

[ppmeath]

"Total reckonable service : 13 Years and 215 Days

Pensionable Remuneration : €35,000 (I presume this is only approximate. Any variation will impact on the estimate).

Your Benefits on retiring at age 65 (Based on current salary). (Your benefits are dictated by the DB scheme that you are a member of).

If you retire at age 65 you would receive a once off tax-free retirement gratuity of €17,836, less the deduction of any outstanding contributions. You would also receive a pension of €2,378."

What was omitted here, is the rest of your entitlements:

"Based on your Class A Social Welfare status, you may also be entitled to a Social Welfare contributory Old Age Pension from age 66, currently €12,173.59 per annum. "

This is payable to you on retirement at 65 (you said that you could retire between 60 - 65 - if your pension entitlements kicked in at 60, then this is when your pension was payable from, if your PRSI contributions are up to date, the only thing you are adding is years service), because your employer has calculated it into you total pension package, as defined by the DB pension scheme of which you are a member of.

The wording is confusing, but it does not say you will be paid a SW COAP from 66, it says you "may be" entitled - they have already assumed that you are entitled, because they have calculated your final pension by factoring this payment in (x 3.33333).

Your PRSI entitlements are your concern, not theirs and if it turns out you are not "entitled" through reasons out of your control - then the supplementary pension kicks in.

When the same details are put into the calculator for a pre 1995 employee, then this is the pension that he is entitled to:

€5,945.

The difference between these payments is:

€3567.

You are then being wrongly advised that you must apply for a supplementary pension to make up this difference, this is incorrect.

"The notional Supplementary pension for this estimate would be for €3567. "

If you were to retire at 65, and if we take this "interpretation" as correct (and it is absolutely not), then to be eligible for the supplementary pension, then you must not be eligible for any SW benefits.

But, with your PRSI record, you would absolutely be entitled to either the JSB or the illness benefit. So you would receive (and again I am basing this on the incorrect assumptions provided), 9,776 per annum (on top of the occupational pension of 2,378 per annume), 9 months in he case of JSB and 2 years in the case of illness benefit.

This Supplementary pension would only be available to you in the event that you fail to qualify for Social Welfare. As you will be signing for SW benefits you will also be awarded Class A credits, which will help maintain your record for State COAP purposes.

You stated that you must wait until September to come back into eligibility for IB ( I think you are already eligible at this point, but that is for another post). So if you are then eligible for IB on retirement, why would you be entitled to any supplementary pension?

Why would you bother with the supplementary pension when your PRSI payments entitle you to almost 10k through either JSB or IB - if it doesn't make sense - then it's not true.

"The notional Supplementary pension for this estimate would be for €3567. This Supplementary pension would only be available to you in the event that you fail to qualify for Social Welfare. As you will be signing for SW benefits you will also be awarded Class A credits, which will help maintain your record for State COAP purposes.

This is simply not true, the supplementary pension is only applicable in the event that you have a problem with your PRSI entitlements. If you work the next couple of years with no sick leave, then you will be entitled to 9,776 per annum as a result of your PRSI entitlements in the few years before retirement.

Your pension is calculated integrating what your employer assumes will be your Max rate SW entitlement to a State Pension (formally known as the OAP), they are reducing your occupational part of the pension because they believe that on retirement, as defined by your DB pension scheme, that you are a member of, your total pension entitlement which is now funded through two sources, will be part funded through your PRSI payments giving you a pension of €12,173.59 + €2,378 = 14,551.59 per annum.

When you reach pension age (As defined under another, entirely different scheme dictated by the Department of SW), you will get nothing, because your pension is already included in your "total pension package".

The only way you will not receive your full SW entitlement of the part of you pension that is "integrated", is if for reasons outside your control, illness or unemployment, there is a gap in your PRSI payments and if, for example you only qualify for the minimum State pension, which is approx 95 per week, then you can apply for the supplementary pension to bridge the gap from €95 to €233.30 (max rate, that they already calculated into you pension, see the model I used for Japster).

The information you are being provided with is incorrect, because the person providing it is not "integrating" the PRSI element of it, they are basing you, with your years service, on a PS worker who did not pay a Class A contributory stamp.

Let me put it to you this way, say you joined in earlier years (post 1995) and both you and your pre 1995 counterpart leave at 45 with the same service.

If you continued working paying a PRSI stamp and your counterpart started working, also paying a PRSI stamp.

Then at retirement age, your counterpart would still receive €5,945. You on the other hand would receive €2,378 + €12,173.59, because while you are both entitled to the same pension benefits, 13/80ths, your counterparts pension is calculated on service and salary, while yours is now connected to the PRSI.

At 67 and if he had accrued enough contributions, your counterpart would receive his OAP entitlement.

To end - this is your entitlement if you retire at 65.

€12,173.59 + €2,378 = 14,551.59 per annum.

You need to do a number of things now, you need to check out your PRSI history and see if you have enough stamps to qualify for the State Pension (Formally OAP), you need to write to you department on receipt of this and ask them to clarify your "pension entitlements", i.e is it still 40/80ths and ask if the calculation is integrated (It is) to take into account your full entitlement to you full pension package.

Ask them are all your benefits paid on the day of you retirement (after 60).


Sit down and calculate your pension from next week and 65 and ask yourself if you receive more of a benefit while continuing to work, paying the pension levy.

If you have paid enough stamps and meet the State Pension eligibility conditions, then all you are adding is service to your pension - calculate the cost of the pension levy over one more year and the increase in the occupational side of your pension.

Any more queries then ask away, I am waiting for information from a friend of mine going through IHR - am happy to help.

PPM.

 

[ppmeath]

"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. "


The scenario described here is the situation that the poster believes that Japster will find himself in, down the line.

Firstly, the "retired public sector people who are in this scenario", do not exist - they could not.

"The scenario" as described by Japster, a post 1995 retiring after 30 years and on his retirement date - could not be the scenario of these two retired public sector workers.

If these two workers were to be in the "scenario", then if they had 30 years service, they have to be pre 1995 employees.

This is 2016, so they had to join at the very least in 1986 (for 30 years service and 1976 for 40 years service).

If they worked 30 years then on retirement they could not have claimed JSB, because they paid a Class D stamp, and this stamp did not entitle them to JSB.

If they are pre 1995, then they received their full pension entitlemen.

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

Are these the same PS workers?

They could not be, because if they were pre 1995 - then they received their full pension entitlements at 60.

If (as is alleged) the supplementary pension was introduced to equalise the pension of a post 1995 to a pre 1995 employee - then how could a pre 1995 PS worker be in receipt of it and why if they received their full pension entitlement?


Sorry folks, but I have done extensive research on this matter, my links are there to support my views, my beliefs are not based on conjecture or anecdotes, but real facts.

I have searched this entire site and the same issue relating to this same issue arises again and again.

And again and again the same false and inaccurate information is posted by people who simply have no idea of how the system works.

 

[Early Riser]

Hello Allencat 3

I just noticed that I made a small error in my original calculation of your service days in POST 131 (I had you returning from ICB on 15/3/2013 rather than 15/4/2013. Just to let you know that I have just edited POST131 to reflect the revised figures. There is actually very little change in the Pension calculation as a result.

Just to note again that the pension figures are calculated on service up to age 65 - This reflects the understanding that you will be granted notional years to that age under IHR. I understand that you actually intend to retire before that.

 

[ppmeath]

Hello Allencat 3

I just noticed that I made a small error in my original calculation of your service days in POST 131 (I had you returning from ICB on 15/3/2013 rather than 15/4/2013. Just to let you know that I have just edited POST131 to reflect the revised figures. There is actually very little change in the Pension calculation as a result.

Just to note again that the pension figures are calculated on service up to age 65 - This reflects the understanding that you will be granted notional years to that age under IHR. I understand that you actually intend to retire before that.

"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. "


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

Would you care to share who these people are?

When they joined?

When they retired?

Their PRSI class?

 

[Early Riser]

Firstly, the "retired public sector people who are in this scenario", do not exist - they could not.

Just to clarify this one point ppmmeath. These people can and do exist.

Firstly,quite a few public sector people were/are in Class A schemes since before 1995 - Several employers in the voluntary public sector had such schemes prior to 1995, with the same retirement terms and conditions as that described in the 1995 scheme. After 1995 I understand that these Class A schemes became the norm .

Secondly, there are people who joined the Public Sector after 1995 who have since passed age 60 and retired. When giving this example I did not specify"30 years service". The same principle applies to 15 years service. "30 years" related to one specific scenario only, ie, japester's example.

 

[ppmeath]

Just to clarify this one point ppmmeath. These people can and do exist.

Firstly,quite a few public sector people were/are in Class A schemes since before 1995 - Several employers in the voluntary public sector had such schemes prior to 1995, with the same retirement terms and conditions as that described in the 1995 scheme. After 1995 I understand that these Class A schemes became the norm .

Rubbish, are you listening to yourself? Anyone employed in the PS prior to 1995 paid a D Stamp.

The thread is about Pre 1995 and Post 1995 - it is for this very reason that the thread exists. Pre 1995 - Class D - post 1995 - Class A.

Secondly, there are people who joined the Public Sector after 1995 who have since passed age 60 and retired.

Well according to you, not only have they since passed 60, but they have successfully claimed a supplementary pension from 60 to retirement age - so they have to be over 65 at the very least as we speak.

So, they retired at least 5 years ago, in 2011 with 16 years service. from 1995.

So, clarify their positions please?

Class, age. service, previous PRSI contributions?

When giving this example I did not specify"30 years service". The same principle applies to 15 years service. "30 years" related to one specific scenario only, ie, japester's example.

What principle is that? Again, fill in the gaps for me please.


You may not have specified 30 years service, but you compared their "scenario" with Japster, who is post 1995, who will serve 30 years and will retire at 60, when his pension entitlement kicks in.

So, again, who are they?

 

[ppmeath]

No answer from ER?

While I am loathe to do this, I have to come down very hard on Early Riser, because the information he is providing is false and misleading.

I have tried to keep myself in check with him - but I can no longer do this, because I am concerned at the possible repercussions of the advice he is providing, in that some posters may be influenced to their detriment - because of this advice.

@Japster, I did not respond to you and wished you luck, because there are no nasty surprises waiting for you.

Early Riser is now in a quandary, because there are no pre 1995 PS/CS workers who paid a Class A stamp, that is just total nonsense.

So the PS workers he is referring to, have at the most, 16 years service, and must be post 1995.

In this event, then the supplementary pension could not possibly be provided to them to bump up their occupational pension to that of a pre 1995 PS worker, because you can't be supplemented for years that you will no longer work.

Your service is your service.

The only possible way that they could receive a supplementary pension is to bridge the only gap that they can have - and that is the gap created from a shortfall in PRSI contributions.


EDIT:

The supplementary pension was never introduced to equal the "Pay" between the pre and post 1995 person, it was introduced to equalise the "pension" entitlements/position of both workers.

Pre 1995 pensions are based on years served and salary.

Post 1995 pensions are based on years served, salary and integrated with PRSI benefits.

The end result must be the very same pension entitlements, paid to both parties, and that is their DB benefit which is based on 40/80ths of their salary.

These same benefits are payable on retirement.

In all his calculations, Early Riser has taken the pension amount of a pre 1995 employee, whose entitlement is not coordinated and deducted the SW element - which is the "integrated" part.

He compares the pension of a pre 1995 employee - against the occupational pension of a post 1995 person.

He then creates a gap and implies that the supplementary pension is designed to fill that gap.

Both pension entitlements are calculated differently.

His figures, calculations and logic simply do not stack up.

 

[Early Riser]

Getting back to "bridging the gap". Just in case it may be relevant to any browsers, the following Schemes in the Voluntary Health Sector are also Class A schemes, members of which face the same issues if retiring between 60 and 65 :

Voluntary Hospitals Superannuation Scheme (VHSS)

Nominated Health Agencies Superannuation Scheme. (NHASS)

Both have been in open since the early 80s - maybe even the 70s for the VHSS.

Of course many workers in these schemes will have already retired or are now considering their retirement options. As Class A schemes they operate a Coordinated System and the issue of Supplementary comes into play for those retiring before eligibility for COAP.

Perhaps there are other schemes in different sectors .I don't know about this.

 

[ppmeath]

I still cannot post links, but this is from a link, that I will post when I can.

It is unedited and I have not changed anything, Japster, read it all, but pay close attention to paragraphs 2, 9 and 10.

Early Riser, I am not even going there because whatever you think you found, does not apply.


As Class A schemes they operate a Coordinated System and the issue of Supplementary comes into play for those retiring before eligibility for COAP.

You are wrong. Because you are not even using the coordinated system, you do not understand it.

You are putting figures into the modellor for both pre and post 1995 workers.

If pre 1995 is entitled to (for example) 5,000 per annum then that is his entire entitlement to his occupational pension, this is NOT coordinated. It is based on this calculation:

1/80th of pensionable remuneration per year of pensionable service up to a maximum of ½ pensionable remuneration

His entire pension is payable from one source.

The post 1995's pension entitlement is calculated:

1 /200th of pensionable remuneration below 3 1 /3 times OACP and 1 /80 th thereafter

This is the coordinated part. The entire pension entitlement is now based on two sources, years service and assumed entitlement to a full rate COAP - the occupational part of the pension is REDUCED to reflect this payment on retirement, whereas before it came from one source, it now comes from two, the employer and the SW - but it must make up the total entitlement.

Both the pre and post employee, after completing their service, are both entitled to (for example) 40/80ths.

You are comparing the pension amount of a pre 1995 employee, then deducting the SW element of the pension that the post 1995 is entitled to on retirement and stating that this is amount that has to be made up by the supplementary pension - the SW has already been factored in. That is how coordination works.




Explanatory Leaflet on the

Education Sector

Superannuation Scheme


REVISION SCHEME OFFICERS

PAYING FULL (CLASS A) PRSI

WHO ARE NOT NEW ENTRANTS
(FOR THE PURPOSES OF THE PUBLIC SERVICE SUPERANNUATION

(MISCELLANEOUS PROVISIONS) ACT 2004)



i.e. those who joined the Public Sector between

6th April 1995 and 31st March 2004 and have remained in public sector employment since their start date


1. What is the basis for the Education Sector Superannuation Scheme?

The superannuation provisions are set out in schemes and regulations made under the Local Government (Superannuation) Act, 1980. These schemes and regulations were formerly made by the Minister for the Environment, Heritage and Local Government but now fall to be made by the Minister for Education and Science with the consent of the Minister for Finance. Chapter 3 of Part II of the Local Government (Superannuation) (Consolidation) Scheme, 1998 contains the main superannuation provisions applicable to those covered by this leaflet. Schemes and regulations made under the Local Government (Superannuation) Act 1980 may be amended by the Minister for Education and Science with the consent of the Minister for Finance, subject to the powers conferred by the 1980 Act.


2. What types of Schemes are involved?

The schemes are statutory schemes to which section 776 of the Taxes Consolidation Act, 1997 applies. They are defined benefit schemes for the purposes of the Pensions Act, 1990. The schemes are not funded and benefits are met on a "pay-as-you-go" basis.


The schemes are integrated schemes meaning they take account of State Pension (Contributory) (or other similar contributory benefits payable under social insurance) in designing the overall pension package. An integrated scheme looks at the State Pension (Contributory) as part of the total pension package. Both employers and employees make pay-related social insurance (PRSI) contributions and these in turn entitle scheme members to Social Welfare benefits. Integration is used as a means of taking into account the benefits payable under the Social Welfare system to calculate –


· the amount of occupational pension required so that the combined pension from both sources is at the level being aimed for in designing the scheme;


· the level of contributions payable by the employee towards the cost of his or her occupational pension.



I MAIN SCHEME



3. What benefits does the Scheme provide?

The main benefits are

· retirement pension and lump sum (question 10)

· death gratuity (question 16)

· spouses' and children's pensions (questions 28 - 44).


4. Who is eligible to join the Scheme?

If you are appointed to a pensionable post with an institute of technology you are eligible to join the Scheme. Membership of the Scheme is compulsory for any officer who is eligible to join it. Membership of the Scheme is also open to certain fixed term and part-time officers subject to certain conditions.



5. What factors will be taken into account in determining benefits?

The benefits will normally depend upon one or more of the following factors:

(a) your basic salary

(b) your pensionable allowances, if any

(c) your service (questions 7,12, 21, 22 and 23).


6. Are contributions payable towards the benefits of the Scheme?

Contributions are payable towards your own retirement pension and lump sum benefits at the rate of 1.5% of your basic salary and pensionable allowances plus 3.5% of your basic salary and pensionable allowances less twice the current rate of State Pension (Contributory). Additional contributions are payable towards spouses' and children's pensions (question 38).


7. What service is reckonable for benefits?

· pensionable service;

· temporary wholetime service which precedes permanent wholetime (i.e. pensionable) service;

· certain part-time service;

· certain other transferred service (question 22);

· additional or added service allowed in certain circumstances (questions 12 and 21);

· certain service in respect of which you may already have received a gratuity or a refund of contributions provided you make an appropriate repayment.


8. On what rate of pay are benefits calculated?

In most cases benefits are based on basic salary, plus any pensionable allowances, on the date of retirement or death. If, however, you change grade or receive a personal increase in salary within the last 3 years of service, an average salary figure will be used.


Pensionable allowances are assessed on the basis of the best 3 consecutive years in the final 10 years of reckonable service. The pensionable allowances earned in whichever 3 year consecutive period is the best are averaged over that period. If the best 3 consecutive year period is other than the final 3 years of reckonable service, the amount of the averaged allowance(s) is uprated to the values appropriate to the last 3 years of reckonable service.


9. When are benefits payable?

Retirement pension and lump sum are payable on retirement. Maximum retirement age is 65 but you may retire at any time after reaching age 60 (or before that age on grounds of ill-health – see question 12). Payment of a pension and lump sum in the case of an ill-health retirement is subject to a minimum of 5 years’ reckonable service; in all other cases aminimum of 2 years’ reckonable service is required in order to qualify for a pension and lump sum. If you resign voluntarily before age 60 with at least 2 years’ reckonable service and do not transfer to another organisation whose pension scheme allows for the reckoning of your institute of technology service you may qualify for a preserved pension and lump sum at age 60, on written application by you or you may, instead, opt for cost neutral early retirement (see question 19).


10. What rate of retirement pension and lump sum is payable?

The Scheme is designed to give you the maximum pension and lump sum after 40 years' service. Subject to a minimum requirement of 2 years' reckonable service (or 5 years' reckonable service in ill-health retirement cases), pension and lump sum are payable for each year of reckonable service (with fractions of a year counting proportionately) at the following rates:


Pension: 1/200th of pensionable pay up to 3 and 1/3rd times the current rate State Pension (Contributory) plus 1/80th of pensionable pay in excess of this limit.

Lump Sum: 3/80ths of pensionable pay.

Example:

A person retires at age 61 with 34.36 years’ pensionable service and pensionable pay of €55,000. The weekly rate of State Pension (Contributory) is €230.30, i.e. €12,017.05 per annum. Therefore 3 and 1/3rd times this limit is €40,056.85 per annum. The entitlements are calculated as follows:

Pension = €40,056.85 x 34.36 x 1/200 = €6,881.77 plus €14,943.15 x 34.36 x 1/80 = €6,418.08

Total Institute Pension = €13,299.85 Lump Sum = €55,000 x 34.36 x 3/80 = €70,867.50

The above pension represents the Institute pension. However, total Pension will come from two sources - the Institute and the State – so that Institute Pension + State Social Welfare Pension = Total Pension


The State Pension (Contributory) is separate to your Institute pension and is paid by the Department of Social and Family Affairs. There may be circumstances where a person does not qualify for the maximum Social Welfare benefit or any at all. For example, a member might retire at age 60 (5 years before State Pension (Transition) becomes payable in the normal course) and, although unemployed, might cease to qualify for Jobseeker’s Benefit. Alternatively, a member aged 65 might retire and, although eligible for State Pension (Transition), might not qualify for the maximum rate of that pension because of gaps in his/her PRSI contribution history. In a case such as this, where the retired member is unemployed but has some problems on the PRSI front, the Scheme provides in certain circumstances for the payment of a supplementary pension in addition to the normal retirement pension referred to earlier in this question.


Specifically, a supplementary pension is payable in any case where –

(a) the retired member is not employed, and

(b) the member’s Institute pension, plus the amount of any PRSI benefit payable, is less than the pension which would have been paid under the Scheme if the entire pensionable pay had been subject to a 1/80th fraction calculation.


The amount of the supplementary pension, designed to make up the shortfall in such cases, may be expressed by the formula A – (B+C), where

A is the amount of the pension which would have been paid to the member by the Institute if the entire pensionable pay had been subject to a 1/80th fraction calculation, as opposed to part subject to a 1/200th fraction calculation and the balance subject to a 1/80th fraction calculation.

B is the amount of Institute pension payable in the normal course to the member concerned and

C is the reduced amount (if any) of PRSI benefit payable to that member.

Therefore, if the employee in the example in this question was not employed post retirement and did not qualify for any PRSI benefit, a supplementary pension of €10,322.65 would be payable, i.e. [(€55,000 x 1/80 x 34.36) - €13,299.85].


If you resign before age 60 and qualify for a preserved pension and lump sum, they will be based on your pensionable pay on the day of your resignation uprated to take account of increases in pensions generally between that date and your 60th birthday.


Effective from 2 January 2009.