Mixed rate contributions

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Information on pension calculations after age 66.

If a customer decides to defer their pension, will the years worked after age 66 be counted as part of their yearly average? If a customer chooses to defer their pension, the number of extra years worked will add to the divisor for the yearly average. (e.g. if a customer has 50 years cons at...
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Hi S class re post # 2 “ October 2024
“You could pay more into your AVCs.
You are not limited to maximizing your tax free lump sum. You can make AVCs on the basis of maximizing the shortfall in your PS pension from the 25% surviving spouse pension to the revenue allowed 50% surviving spouse pension”. Does that presume that you have or will have a spouse
 
november16 said:
Does that presume that you have or will have a spouse
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I am not sure about this.
I remember reading, approximately 4 years ago, that a single person could fund based on the fact that they could marry later in life or after retirement. This was on a pension providers website.
I have tried to find this article again, but could not locate it.

At that time I helped my sister.to set up AVCs and an ARF.
She is single, pre 95 public sector.
She retired on full public sector pension.

She made last minute AVCs of about 27k. Of this 5k went towards her tax free lump sum. The remaining 22k went towards her ARF.

This amount of AVCs was far in excess of any non pensionable income for her final 2 years.

This was all accepted by the AVC provider (Zurich). There was no issue about her being single.

She got tax relief on all the AVCs.
They were up to her maximum age related amount for her final two years pay.

She had contacted Cornmarket.
Their plan only included a top up to her tax free lump sum. They didn't highlight that she had scope to make extra AVCs beyond that.

Their estimated tax free lump sum was also below what she achieved from the calculation done by Zurich.
 
Thanks S Class. I am pre 95 CS. and not married.

This possible additional scope was never mentioned to me by PRSA or IPF. Thanks very much for all your work knowledge and input to this site.

I have approx €32,000 in a PRSA AVC (New Ireland pension provider)I have approx 28.7 years, bought back temp 9 months approx last year. I have an AVC PRSA taken out the end of 2022. I did two last minute lump sums one in 2023 one in 2024 for 2023.

I was informed that I could make up the lump sum shortfall of approximately €39,000 with AVCs. this would only allow another lump sum of € 7,000 approx. Salary approx €72,000 multiplied by years eg substantive pay will be approx €48,800

HDA of € 24,000 in march, perhaps approximates to 72,000/payroll use divisor of 52.18 to calculate weekly pay, which means I am down about €6 per week. Not sure what the final salary will be in April and whether it’s net pay or gross pay figure they use in calculating the final pension, the advisors have come up with different figures to NSSO.

I am looking to do another final lump sum for 2024 maybe in April and getting different answers as to what I am allowed to re maximising lump sum.

The broker with Pension Advice company, is very transactional (hard work) doesn’t give any advice just charges when I do Lump Sum. No help ref calculating and new Ireland Pension Provider, who wouldn’t allow me to proceed with AVC last year without the calculations, nearly missed Revenue deadline due to this.

I have spoken to several advisers and they just not as knowledgeable as yourself and haven’t done their research eg I.P.F. PRSA they state that they are the experts in relation to Public sector. I also recently spoke to money maximers and they weren’t as knowledgeable as you and they advise teachers and public servants.


Further complication in my case Not all Salary is pensioned. HDA Salary will be pensioned just averaging of last 2 years no accurate figures provided by NSSO.
 
S class said:
You seem to have a shortfall of 13 paid contributions for 2021.
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re. Post #13/#18

I stopped working in Sep 2021. My annual pay was less than 18k eur that year and I got 39 AO class stamps paying 0.00 eur PRSI.
To make a voluntary contribution for the missing 13 weeks what rate is charged?
Is it 6.6% of reckonable pay for 2021 or 500 eur?
 
S class said:
It would be 500 euro for 2023 and 2024 as you have no class A earnings in 2022 or 2023.
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I checked with DSP Pension Eligibility Services - they say the Voluntary Contribution is based on all my earning for 2023/24 - i.e. my only income occupational pension (class M), which works out a lot more than 500 euro. I queried the person on this and they checked with a second person and confirmed this.
 
@BilboB

How many contributions are shown on your statement for 1978/79 ? This was when the contribution year changed and anybody who worked the full "year" should be have 66 paid contributions ? This isn't always shown correctly until the SPC application is processed.
 
1978/79 I have 66 ORD paid and they are in the the Reckonable for Pension column also.
 
Okay, I must be wrong on this. Sorry.

The guidelines state it is based on the previous years Reckonable earnings. I had assumed that this would only include earnings that had Reckonable Prsi contributions deductions.

If you apply to start your pension at age 66 you will find out how much your pro rata pension will be.

Then you will have an idea if it is worthwhile paying a larger amount for voluntary contributions to get you a YA + TC pension.

You are allowed to reject the pension provided you have not accepted any pension payments.

If you opt for payment to a bank account you need to act quickly before any pension payments arrive into your bank account.

You could opt for payment at your local post office and then not collect any payments if you wish to reject the pro rata pension.

Pro rata is 289 euro divided by your total contributions (A, D and credits) and multiplied by your total reckonable paid and credited contributions.

So roughly 289 /2295 x 483 = 60 euro per week.

When you get your pension award calculation you could post it here and then it would be possible to see if deferral and voluntary contributions are beneficial to you.
 
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