Funding of exorbitant PS 'pensions'

[ATC110]

I'm in the process of completing Revenue Form 11 before the deadline for 2019 tomorrow and in today's news I'm informed ten HSE staff are 'retiring' with lump sums in excess of €300k plus an annual 'pension' of €125k in one case.

Firstly, these are not pensions as there's no fund rather they're funded from day to day taxation with a small contribution by the recipient.

The only beneficiary I have heard describing some PS pay rates being "out of control" was the economist Moore McDowell.

Ireland is a small agrarian society, currently enjoying the temporary spoils of being an unofficial tax haven, yet PS pay rates are exorbitant, permanent and rising exponentially.

There will never be PS pay reform as long as the overweening unions remain unchecked by successive governments.

It is simply infuriating to think I will be paying a tax liability today which will directly or indirectly fund grotesque overpayments such as this.

Ten former HSE staff retire with lump sums of more than €300,000

Pensions for 131 high earners in health service to cost €9.95 million every year

www.irishtimes.com

Six Trinity employees earn over €300k each in 2019

That is according to the 2019 annual accounts for the university and subsidiaries which show that the university group recorded a surplus of €5.7m in the 12 months to the end of September last.

www.irishexaminer.com

 

[Purple]

I'm in the process of completing Revenue Form 11 before the deadline for 2019 tomorrow and in today's news I'm informed ten HSE staff are 'retiring' with lump sums in excess of €300k plus an annual 'pension' of €125k in one case.

Firstly, these are not pensions as there's no fund rather they're funded from day to day taxation with a small contribution by the recipient.

The only beneficiary I have heard describing some PS pay rates being "out of control" was the economist Moore McDowell.

Ireland is a small agrarian society, currently enjoying the temporary spoils of being an unofficial tax haven, yet PS pay rates are exorbitant, permanent and rising exponentially.

There will never be PS pay reform as long as the overweening unions remain unchecked by successive governments.

It is simply infuriating to think I will be paying a tax liability today which will directly or indirectly fund grotesque overpayments such as this.

Ten former HSE staff retire with lump sums of more than €300,000

Pensions for 131 high earners in health service to cost €9.95 million every year

www.irishtimes.com

Six Trinity employees earn over €300k each in 2019

That is according to the 2019 annual accounts for the university and subsidiaries which show that the university group recorded a surplus of €5.7m in the 12 months to the end of September last.

www.irishexaminer.com

There has been significant pension reforms in the State Sector in recent years. It is no longer nearly as attractive as it was for those who are now retiring.
The State pension that we are all entitled to is a bigger problem from a sustainability perspective.

 

[ATC110]

There has been significant pension reforms in the State Sector in recent years. It is no longer nearly as attractive as it was for those who are now retiring.
The State pension that we are all entitled to is a bigger problem from a sustainability perspective.

It's still a Defined Benefit scheme albeit salary average rather than final salary.

I take your point re the state pension but the optics/principle of the enormous PS payouts are uniquely inequitable.

 

[Deiseblue]

It should also be pointed out that Public Sector pensioners do not receive the Old Age contributory pension in ADDITION to their occupational pensions rather the OAP is integrated into their pension.
The true Rolls Royce of pensions is that of those like myself who are in receipt of both an occupational pension PLUS the contributory OAP.
I’m a Bank of Ireland pensioner since 2007 and I can assure you that the upper echelons of Bankers benefited to a degree in terms of pensions and part commutation of such pensions to achieve lump sums that far exceed the amounts detailed in your opening post , it should also be pointed out that these erstwhile high flyers can also avail of the OAP.
The reason why Public Sector workers receive 1.5 times their salary on retirement is because their maximum pension is topped off at 50% of their final salary.
On a further note I would point out that that Public Sector employees currently pay multiples by way of pension contributions compared to the pension contributions I paid.

 

[Conan]

Probably also worth pointing out that any PS employee retiring on such a package will exceed the €2m fund cap and thus be subject to some “excess of fund tax” (albeit not paid as a lump sum).

 

[Purple]

Probably also worth pointing out that any PS employee retiring on such a package will exceed the €2m fund cap and thus be subject to some “excess of fund tax” (albeit not paid as a lump sum).

How is that calculated for unfunded DB pensions?

 

[Conan]

See Chapter 25 of the Revenue Pensions Manual. Because there is not a “fund” in the case of Civil Service pensions, any “excess of fund tax” is taken in part from the Lump Sum and in part from the annual pension.

 

[Firefly]

It should also be pointed out that Public Sector pensioners do not receive the Old Age contributory pension in ADDITION to their occupational pensions rather the OAP is integrated into their pension.

What if the pension is less than the OAP? Consider someone who joined the PS a few years before retiring and their PS pension was, say, 5k per year. Would they get this on top of the OAP or just the OAP?

 

[Conan]

Anyone joining the Public Service after April 1995 pays Class A PRSI. So therefore they are entitled to a State Pension (depending on their record) in addition to any Occupational Pension - whether an “integrated DB pension or the new Single Scheme pension.

 

[Firefly]

What if the pension is less than the OAP? Consider someone who joined the PS a few years before retiring and their PS pension was, say, 5k per year. Would they get this on top of the OAP or just the OAP?

Answered here

What if public sector pension is less than OAP?

Hi, Deiseblue said in another thread Public Sector pensioners do not receive the Old Age contributory pension in ADDITION to their occupational pensions rather the OAP is integrated into their pension. I would like to know, what if the public sector pension is less than the OAP? Consider...

www.askaboutmoney.com

 

[Conan]

Answered here

What if public sector pension is less than OAP?

Hi, Deiseblue said in another thread Public Sector pensioners do not receive the Old Age contributory pension in ADDITION to their occupational pensions rather the OAP is integrated into their pension. I would like to know, what if the public sector pension is less than the OAP? Consider...

www.askaboutmoney.com

Not necessarily true.
Pre April 1995 Public Servants pay Class B or D PRSI (modified rate) and are members of an “non-integrated” DB scheme. They do not get a Social Welfare pension, only an Occupational Pension. However entrants to the PS after April 1995 pay Class A PRSI so will be entitled to a SW Pension in addition to either an “integrated” DB pension or a Single Scheme pension.

 

[NoRegretsCoyote]

@Early Riser

What about the following scenario for someone who joined post-2004, and pre-single scheme.

They work 8 years in the PS, and pay Class A PRSI. They then leave Ireland (for good) when on a salary of €50k. They can't make voluntary PRSI contributions or subsequently draw a state contributory pension as they have not paid 10x52=520 PRSI contributions.

Will they get a supplementary pension?

The answer would seem to be "yes" on the basis of this:

1. What happens if I do not qualify for Old Age Pension or any other Social Welfare benefit?
If, through no fault of your own, you do not qualify for Old Age Pension or any other Social Welfare benefit or qualify for only a partial entitlement then you may be entitled to receive a supplementary pension.

12. What is a supplementary pension?
A supplementary pension is an additional amount of pension that may be paid to a person whose occupational pension is co-ordinated with the Old Age Pension. It is paid in circumstances where the combined pensions (i.e. occupational and Social Welfare benefit) are less than the pension they person would receive if the occupational pension was calculated on a non-co-ordinated basis. It comes in for consideration when a person who is umemployed and who through no fault of their own fails to qualify for any Social Welfare entitlement; it represents the difference between the total of the pensions actually received by the person and the pension that would be payable if the occupational pension was not co-ordinated with the Old Age Pension.

On a coordinated basis annual pension would be ((3.33*SPC)*(8/200))+((€50k-(3.33*SPC))*(8/80))=€2,400. There would be no SPC at all.

But on a "non-co-ordinated basis" it would be 8/80*€50k= €5000k

So would a supplementary pension of €2,600 be paid on top of the €2,400?