Idiot's guide to PRSI and Cost Neutral Retirement required !

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Páidín Óg

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I'm hoping that someone here might be able to advise. I am a primary school principal, age 50, hoping to retire at the end of this school year when I will be 51. I need out as soon as possible.
I am teaching since 1991. I took a career break from September '97 to August '98, when I resigned a permanent post and took up a temporary position in September '98. I've had no break in service at all. My current salary is €91k. When looking into Cost Neutral Retirement, I have discovered that because I am on Class A1 PRSI that this will impact significantly on my pension entitlements.
I have three questions. (Bear in mind that this stuff is double Dutch to me!) 1. Given that I had no break in service, should I have been moved from Class D1 PRSI?
2. How badly would things be affected by taking Cost Neutral at Class A1 compared to D1?
3. Anyone got any clever solutions or suggestions?

Thanks a lot

Páidín
 
Is it permissable to post a link to a particular financial advisor on this forum ?

Have had advice from xx who specialises in Public service employees.
 
So it seems you transitioned from Class D to Class A in 1998 and feel you shouldn't have as a pre-95 public service worker. I don't know the ins and outs of eligibility, but I know a bit about how bureaucracies work.


I think it will be a stepp uphill struggle for you to convince the Department of Education that you have been on a post-95 payscale for 22 years but that you should have been on a pre-95 one.

An acknowledgement by them would presumably involve a pretty massive backward correction of pay, tax and PRSI payments. I think the onus will be on you to prove that they made a gross error in putting you on a post-95 payscale paying Class A in 1998. And also why you never made them aware of it until now.
 
Páidín Óg said:
I am teaching since 1991. I took a career break from September '97 to August '98, when I resigned a permanent post and took up a temporary position in September '98. I've had no break in service at all.
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If it was just a career break then I do not think you should have been changed to post-95 Class status. But you don't seem to have returned from career break - instead you say you resigned your position. I don't know the rights and wrongs of this but I suspect the change to Class A relates to this. As another poster has suggested, your union should be able to advise.

Páidín Óg said:
I'm hoping that someone here might be able to advise. I am a primary school principal, age 50, hoping to retire at the end of this school year when I will be 51.
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You have probably considered this already, but if you could hold on to 56-ish you would probably be eligible for normal retirement (no actuarial reduction), as a pre-2004 teacher - once you get to 35 years service. This includes some recognition for pre-service qualification - eg, one year for a primary degree. If you retire now, your CNER will be calculated with 60 as a baseline for actuarial reduction.

Páidín Óg said:
How badly would things be affected by taking Cost Neutral at Class A1 compared to D1?.
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If you go ahead with CNER with both Class A and Class D service you are likely to be given a number of options. I had a quick look at your likely CNER pension based on one option - 6 years at Class D and 22 years at Class A (I don't know how accurate this is as regards your service record). I also used €91K as pensionable salary. Bear in mind that this is rough and ready, but I estimated your CNER pension at 51 as being about €16,100, whereas the calculation with all Class D service is about €20,700. At 60 you could apply for a Supplementary Pension, which would close the difference (to qualify you could not be in any insurable employment or entitled to a contributory SW payment). Also, you will have eligibility for at least a partial State Pension at 67/68 based on your Class A.

Páidín Óg said:
Anyone got any clever solutions or suggestions?
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I don't have any clever solutions but if you are going ahead with CNER next year you should look at a "last minute AVC" to boost your tax-free lump sum.
 
NoRegretsCoyote said:
So it seems you transitioned from Class D to Class A in 1998 and feel you shouldn't have as a pre-95 public service worker. I don't know the ins and outs of eligibility, but I know a bit about how bureaucracies work.


I think it will be a stepp uphill struggle for you to convince the Department of Education that you have been on a post-95 payscale for 22 years but that you should have been on a pre-95 one.

An acknowledgement by them would presumably involve a pretty massive backward correction of pay, tax and PRSI payments. I think the onus will be on you to prove that they made a gross error in putting you on a post-95 payscale paying Class A in 1998. And also why you never made them aware of it until now.
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Surely Coyote by being under Class A Paddy will at least benefit from the State Contributory Pension which he would not have been able to access as a pre 1995 teacher? My point is, the higher contributions he paid are at least of some benefit
 
Sadim said:
Surely Coyote by being under Class A Paddy will at least benefit from the State Contributory Pension which he would not have been able to access as a pre 1995 teacher?
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Perhaps, but as Early Riser has pointed out there are other issues.

I don't have expertise in the area but I am very doubtful that a retroactive change to most of a career's pay and PRSI arrangements can be made easily.
 
A colleague moved from a VEC to a Voluntary Secondary school in 2006. 13 years later it emerged she had been put on Class A1 PRSI instead of Class D1. The refund she received was in the order of €10,000.
 
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The relevant circular (6/95), probably renumbered for Education, states that officers on class D who resign from post after 6/4/95 who subsequently join the public service will go on class A prsi. It seems correct that you were put on class A, sorry!
 
Hi Páidín I just see this post now and curious as to your outcome. I am in the same position, 23 yrs paying A instead of D stamp. I received a SCOPE adjudication in November 2023. I am trying to sort this out now and would be really interested to talk with you. I was also on a career break.
noseynu
 
Paidin, just to say if you had even a one day break in service you are correctly classes as A - I did not resign until a year after I took up the new post. If you are unsure contact SCOPE
Noseynu
 
What is SCOPE ?
Can someone post a link to a financial advisor who specialises in public sector pension calculations please ?
 
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