full service retirement options

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allaround

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Hi there, just looking into the future around this, i'm an A Prsi and retirement age 65, will have full (40 years service at 61), albeit I wont get supplementary till post 65 (taking into mind DSEAP for 9 months), what options would i have if wishing to retire early and maximise pension benefits?
 
allaround said:
Hi there, just looking into the future around this, i'm an A Prsi and retirement age 65, will have full (40 years service at 61), albeit I wont get supplementary till post 65 (taking into mind DSEAP for 9 months), what options would i have if wishing to retire early and maximise pension benefits?
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So you are a post-2004 entrant? If so you are looking quite far ahead!

As you would be taking cost neutral early retirement at 61 your lump sum would be reduced to approx 92.5% of max (that is 92.5% of 1.5 times your pensionable salary). Because Revenue also restrict the lump sum allowable in the case of early retirement, there may not be much potential for topping up here.

As you will have 40 years of service, notional years purchase is not an option.

However, you should have quite good options to top up your Occupational Pension via AVCs (although the extent of the tax advantages would depend on your salary). You could transfer the proceeds of an AVC fund to an ARF to drawdown as income in retirement. There are certain limits on this to do with Revenue. But probably more importantly, you will need to consider what your total taxable income is likely to be in retirement. You probably do not want to be paying into a pension for top tax relief now if you are also likely to be paying top tax on the drawdown. This all depends on your pay/salary level (now and in retirement). However, there should certainly be some scope - at the very least, to bridge the gap between 61 and 65.

If you want to give an indication of the current salary for the grade/incremental level you might reasonably expect to retire on (nothing too definite required) it would be easier to comment on your scope.
 
Hi Early Riser, complicated I was pre 04 but service break classifies me now as post 04, salary would be 71K approx., I have a small avc as I was thinking about years 61-65 (when supplementary not available), so a lump sum if taking cost neutral cant be topped up?
 
As you have over 20 years service (40 in fact) Revenue would allow a lump sum of 71K*1.5 = 106.5K. However, this is on the assumption of retirement at normal age for the scheme. They also have a reduction formula for the max they will allow in the case of CNER. Your actuarially reduced lump sum at from the scheme at 61 would be about 98.5K. I don't think this would allow you any room for further top up, given Revenue's own limits.

You do have considerable room for manoeuvre regarding an ARF from an AVC fund though. Your actuarially reduced pension should be about 18K. If you get the DEASP for 9 months, you still have 3 years plus where you could draw down about 17K a year without going into the top tax bracket. You would still have room for manoeuvre post 65, if at a more modest annual rate. AFAIK, your supplementary will also be actuarially reduced (so about 10K-11K) but I am assuming you will meet the requirements for a full State Pension.
 
Check with your pension person but you may be able to take your lump sum from AVCs rather than than from your already actuarially reduced pension.
Early Riser said:
As you would be taking cost neutral early retirement at 61 your lump sum would be reduced to approx 92.5% of max (that is 92.5% of 1.5 times your pensionable salary)
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Open to correction but my understanding is that the lump sum is based on salary rather that the, usually lower, pensionable salary.
 
michaelm said:
Open to correction but my understanding is that the lump sum is based on salary rather that the, usually lower, pensionable salary.
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Same thing, unless the poster has pensionable emoluments in addition to salary. From the Handbook:

"Retirement lump sum is 3/80ths of pensionable remuneration .............. for each year of reckonable service, subject to a maximum of 1½ times pensionable remuneration "
"Lump sum superannuation benefits (i.e. retirement lump sums and all gratuities)are calculated by reference to pensionable remuneration and reckonable service. Pensionable remuneration is the aggregate of pensionable salary and pensionable emoluments"
"Pensionable salary is, generally, the annual salary of an officer on the last day of established service." (This is qualified by the 3 year averaging condition).

In the public service there is no provision for taking the Occupational Pension lump sum from anything other than the public service main scheme. However, it may be topped up to Revenue limits from an AVC if Revenue limits are higher than the lump sum provided by the Occupational scheme.
 
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