Can you explain that to me?
Can you explain that to me?Here are the ASC rates.
Rate 1 refers to PS who are a member of the new Single PS pension scheme.
Rate 2 is for members of pre-existing schemes.
Main Employer Thresholds & Rates 2020 & 2021
Annual Threshold Monthly Threshold Weekly Threshold Rate 1 Rate 2 First €34,500 First €2,875 First €663.46 0% 0% Next €25,500 Next €2,125 Next €490.38 3.33% 10.0% Over €60,000 Over €5,000 Over €1,153.84 3.5% 10.5%
Note, of course, that these Additional Conts are after the normal 6.5% pension contribution.
Yes. The Single PS Scheme, introduced in the wake of the GFC, is not as favourable as the old traditional, final salary based, PS pension schemes. For that reason, it is less costly to provide and members are charged the lower rates of Additional Superannuation Contribution.Can you explain that to me?
So members on the old scheme are contributing 10.5% on incomes over €60k, plus their Pension Levy (as it is commonly known). Is that correct?Yes. The Single PS Scheme, introduced in the wake of the GFC, is not as favourable as the old traditional, final salary based, PS pension schemes. For that reason, it is less costly to provide and members are charged the lower rates of Additional Superannuation Contribution.
Not quite. The 10.5% is the pension levy. Some PS employments also pay 5% normal normal.pension contribution plus 1.5% spouses and childrens contribution. (aka widows and orphans, for those of a certain vintage!)So members on the old scheme are contributing 10.5% on incomes over €60k, plus their Pension Levy (as it is commonly known). Is that correct?
Pre 1994, modified (low) rates, usually Class B for Civil Service and Class D for wider public service.What rate of PRSI do those employees pay?
Okay, so they are contributing 10.5% towards a 50% DB pension with the 150% tax free lump-sum on retirement. That means they are coming nowhere close to funding their own pension. That said most people come nowhere close to funding their State pension through PRSI either.Not quite. The 10.5% is the pension levy. Some PS employments also pay 5% normal normal.pension contribution plus 1.5% spouses and childrens contribution. (aka widows and orphans, for those of a certain vintage!)
Pre 1994, modified (low) rates, usually Class B for Civil Service and Class D for wider public service.
Post 1994, standard Class A rates.
Pre 94s don't get state contributory OAP, post 94s do, but their pension is integrated so, effectively, the OAP is deducted from their occupation PS pension.
And finally, post 94 payscales are 5% higher than pre 94 ones - this was the deal done way back in the early nineties when the government agreed not to "go after" pensions paid to existing pre 94 civil servants. There endeth the history lesson for today.
Yes, or 15.5% in some PS employments.Okay, so they are contributing 10.5%....
Very true. I've seen actuarial assessments that put the true cost at anything from about 30% to 50% of salary. Higher for those with lower retirement ages and faster accrual, eg guards, prison officers, army officers. In fairness, the actuarial cost is artificially inflated because funded DB schemes are forced to adopt VERY conservative assumptions and investment strategy. I've no idea really what a "fair" comparative cost would be for an unfunded scheme, intuitively I'd guess around 25%. But I could be WAY wrong!...towards a 50% DB pension with the 150% tax free lump-sum on retirement. That means they are coming nowhere close to funding their own pension.
Indeed. Although, the higher you're paid and the more your contributions are real rather than credited, the closer you will come. That's why it would be totally wrong to means test the contributory OAP.That said most people come nowhere close to funding their State pension through PRSI either.
A fair assessment.Yes, or 15.5% in some PS employments.
Very true. I've seen actuarial assessments that put the true cost at anything from about 30% to 50% of salary. Higher for those with lower retirement ages and faster accrual, eg guards, prison officers, army officers. In fairness, the actuarial cost is artificially inflated because funded DB schemes are forced to adopt VERY conservative assumptions and investment strategy. I've no idea really what a "fair" comparative cost would be for an unfunded scheme, intuitively I'd guess around 25%. But I could be WAY wrong!
Until the PRSI ceiling was removed nobody funded their State pension so those who are now retired contributed even less.Indeed. Although, the higher you're paid and the more your contributions are real rather than credited, the closer you will come. That's why it would be totally wrong to means test the contributory OAP.
Yeah, I'd forgotten about that. Although, I'd find it hard to begrudge those who paid astronomical tax rates in the 70s and early 80s. I was briefly exposed to the 65% rate myself for a while and there was levies and PRSI on top of that too. VAT and excise was higher too. Remember excise duty on TVs and video recorders?!Until the PRSI ceiling was removed nobody funded their State pension so those who are now retired contributed even less.
I missed that but I went onto the highest tax band as a 3rd year apprentice and paid income tax and PRSI on the first pound I earned. I think that it should still be so in the latter case but people on average incomes shouldn't pay anything at the highest rate.Yeah, I'd forgotten about that. Although, I'd find it hard to begrudge those who paid astronomical tax rates in the 70s and early 80s. I was briefly exposed to the 65% rate myself for a while and there was levies and PRSI on top of that too. VAT and excise was higher too. Remember excise duty on TVs and video recorders?!
Same with HSE workers. The 2 different scales only applied in the Civil Service.Note that teachers payscales are the exact same pre-and post-1995.
Is that all HSE employees or just the workers?Same with HSE workers. The 2 different scales only applied in the Civil Service.
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