Buying Back Pension Years - Give up Salary Protection?

foggydew

New Member
Messages
4
Hello,

I am a state employ (teacher) and I am planning to buy back my pension years. However, I think I will need to forgo one or two other voluntary contributions in order to do this and am hoping to receive some advice regarding the contributions to forgo. Some background: I am almost forty and began my service at 30. I, along with my partner, began paying our first mortgage (4 Year Fixed Term) a few months ago and we are expecting our first child in December.

So, returning to my pension years etc. I am planning to suspend my AVC until I have gained back my pension years. This is currently €68 per month. I plan to put this into buying pack my years instead.

My real question concerns whether to give up salary protection (€52 per month) or my health insurance (currently approx. 100 per month on a corporate plan). The financial group which administers both the salary protection and AVC charges me approx. €17 per month to manage these contributions. In an ideal world I could keep both but with a baby on the way and with my goal to buy back my years, something has to give and I think it might be Salary Protection.

I would be grateful for some sound advice here.

Thank you in advance.
 

elcato

Moderator
Messages
3,163
If you are a full-time teacher why are you paying income protection at all ? Unless you do something catastrophic you have zero chance of losing your job.
 

elcato

Moderator
Messages
3,163
I would expect disability to be included in 'something catastrophic'. My point is it's bad value.
 

Conan

Frequent Poster
Messages
964
If your are unable to work due to illness or injury, the State will only pay you for a limited period (a few months full followed by a few months at reduced pay). After that your income ceases. Income Protection ensures an income after the State payment ceases. Like most “insurance policies” is offers peace of mind just in case.
 

michaelm

Frequent Poster
Messages
1,643
I would be reluctant to give up the income protection. Nor would I give up health insurance, however you could halve the cost of your health insurance by switching to a basic policy (assuming you're in good health). I imagine that you could trim spending elsewhere.
 

EmmDee

Registered User
Messages
198
If your are unable to work due to illness or injury, the State will only pay you for a limited period (a few months full followed by a few months at reduced pay). After that your income ceases. Income Protection ensures an income after the State payment ceases. Like most “insurance policies” is offers peace of mind just in case.
Income Protection policies have had a bad rep for being difficult to claim on - I'm not sure if they have tidied up their act. But they were questionable in terms of actual utility. That would be one area I'd look at

The €17 per month admin fee seemed high to me if they are established policies / contributions. But maybe I'm being harsh - our payroll handles all contributions to health / pension / protection policies.

The health plan could be the most valuable (does your plan cover your baby for a while). There is more chance of minor ailments in the first year or two after - even regular doctor visits etc. Depending on your plan, you might get more value from this than the Income Protection
 

foggydew

New Member
Messages
4
Thank you for your feedback. Yes, the reason to keep salary protection would be in case of illness. I am aware of differing views in regard to the benefit of (or not) of salary protection and am wondering if that could be the one to let go.
 

DingDing

Frequent Poster
Messages
248
Also with changes to the sick leave scheme, you can very quickly end up on half pay or indeed no pay. There are extended sick pay arrangements for certain illnesses such as cancer, however, if you are not in one of these categories you can run out of pay fairly quickly.
Remember if you opt-out of Health Insurance you will lose the community-rated element if you rejoin later and this could be expensive, particularly as you get older.
 

lledlledlled

Frequent Poster
Messages
213
You might consider looking into overpaying your mortgage instead of contributing to AVCs or buying back years?
Can you not buy back the years just before you retire?
 
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