Moving to Teaching from Private Sector
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torblednam
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If they're paying A class PRSI contributions they'll qualify for their contributory state pension regardless of what sector they're employed in.
The amount they receive from their occupational pension will take account of their length of service i.e. 20/80ths, and (as an A class contributor) their receipt of a state pension.
The amount they receive from their occupational pension will take account of their length of service i.e. 20/80ths, and (as an A class contributor) their receipt of a state pension.
Thanks torblednam. To clarify, if they never worked previously to becoming a teacher and then put in 20 years they will end up with 20/80ths. What extra pension will they get for the 20 years they were in the private sector and paying PRSI?
The 20 years PRSI contributions is added to your overall PRSI record which entitles you to a state contributory pension if you have enough years service.
Here is more information about how you qualify.
http://www.citizensinformation.ie/e...etired_people/state_pension_contributory.html
Here is more information about how you qualify.
http://www.citizensinformation.ie/e...etired_people/state_pension_contributory.html
torblednam
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I have to confess that I have done something that I am annoyed by when I see other people doing it: I am posting on a topic that I don't really have the expertise for.
My understanding of how the occupational schemes work is that you get whatever state pension your contributions entitle you to, and if the 20/80ths exceeds this then you get the additional amount.
(But I could be well off the mark.)
My understanding of how the occupational schemes work is that you get whatever state pension your contributions entitle you to, and if the 20/80ths exceeds this then you get the additional amount.
(But I could be well off the mark.)
Thanks, that's what I'm trying to clarify. It seem unfair if that's the case as if so the 20 years worth of PRSI was wasted.I have to confess that I have done something that I am annoyed by when I see other people doing it: I am posting on a topic that I don't really have the expertise for.
My understanding of how the occupational schemes work is that you get whatever state pension your contributions entitle you to, and if the 20/80ths exceeds this then you get the additional amount.
(But I could be well off the mark.)
Thanks huskerdu, I read torblednam's reply first.
From our link;
If you meet all these requirements, you may qualify for a pension proportionate to the number of contributions that you have at the full rate. To take a very simple example, if you worked for 40 years up to age 66 and 10 of those were in the private sector, you would get one-quarter of the normal pension.
Therefore someone who works for 20 years in the private sector and 20 years as a teacher gets half the State pension as half the teachers pension.
OK, that seems fair.
Am I correct?
No, you are misunderstanding.
No, this is incorrect. When you retire you may be entitles to private and state pensions. This is a simplified explanation
All workers pay PRSI. Your PRSI contributions entitle you to a state contributory pension, based on how many years that you contribute .
Completely separate to this, your pension contributions, and your employers contributions are invested in a fund to provide a pension for you, based on those contributions.
I am not going to explain all the rules about all the different scenarios which can occur . There are different types of pension and rules abut tax releave and the maximum pension you can get, but mainly if you work and contribute to a pension and pay PRSI, you will get a company pension and a state pension.
I have to confess that I have done something that I am annoyed by when I see other people doing it: I am posting on a topic that I don't really have the expertise for.
My understanding of how the occupational schemes work is that you get whatever state pension your contributions entitle you to, and if the 20/80ths exceeds this then you get the additional amount.
(But I could be well off the mark.)
No, this is incorrect. When you retire you may be entitles to private and state pensions. This is a simplified explanation
All workers pay PRSI. Your PRSI contributions entitle you to a state contributory pension, based on how many years that you contribute .
Completely separate to this, your pension contributions, and your employers contributions are invested in a fund to provide a pension for you, based on those contributions.
I am not going to explain all the rules about all the different scenarios which can occur . There are different types of pension and rules abut tax releave and the maximum pension you can get, but mainly if you work and contribute to a pension and pay PRSI, you will get a company pension and a state pension.
OK, I'm back to square one. If someone works in the private sector for 20 years and accumulates a contributory state pension entitlement over that period and then becomes a teacher for the next 20 years what are the entitled to? They will get 20/80ths of their teachers salary but what will they get for the 20 years worth of PRSI contributions they made while in the private sector?
This has nothing to do with a company pension! I am asking only about what happens to the State pension entitlement which accrued while working in the private sector.
torblednam
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I understand all that but this thread is specifically about public sector DB schemes.
The only such one I'm remotely familiar with is the one I'm in for the civil service as an A class contributor.
I know for a fact I won't be getting a state contributory pension on top of my occupational pension of X/80ths of final salary, and that my contributory pension will be subsumed into my DB pension. (And that's fine with me, lest anyone looking to PS-bash might try to infer otherwise!)
I plan on serving (or otherwise attaining) my full 40 years service so I've never considered whether or what my first dozen years of PRSI might entitle me to... you have me wondering now too Purple...
The only such one I'm remotely familiar with is the one I'm in for the civil service as an A class contributor.
I know for a fact I won't be getting a state contributory pension on top of my occupational pension of X/80ths of final salary, and that my contributory pension will be subsumed into my DB pension. (And that's fine with me, lest anyone looking to PS-bash might try to infer otherwise!)
I plan on serving (or otherwise attaining) my full 40 years service so I've never considered whether or what my first dozen years of PRSI might entitle me to... you have me wondering now too Purple...
torbeldnam - if you work 40 years in the public service, paying A class contributions - you will finish up with a total pension equivalent to half (40/80) your salary. But there are 2 components to this pension, the contributory pension and the public sector pension for which you pay superannuation. The superannuation part will be 40/80 of your salary, minus the maximum contributory pension.
If the OP has paid 40 years A class stamps, (20 while in the private sector and 20 in the public sector), then he'll have the full contributory pension. But the other superannuation part will be smaller. It'll be 20/80 minus the maximum contributory pension. However I think there is an alternative method of calculation, if this isn't favourable.
I'm not an expert on this subject, I just know about the information that applies to me! The rules are a bit different for newer entrants to the PS.
If the OP has paid 40 years A class stamps, (20 while in the private sector and 20 in the public sector), then he'll have the full contributory pension. But the other superannuation part will be smaller. It'll be 20/80 minus the maximum contributory pension. However I think there is an alternative method of calculation, if this isn't favourable.
I'm not an expert on this subject, I just know about the information that applies to me! The rules are a bit different for newer entrants to the PS.
Purple,
the first 20 years paying PRSI is accruing CSP benefits, as will the next 20 years spent paying PRSI.
No PRSI is "wasted", although it's true that somebody with 39 years paid may get the same CSP as somebody with 40 years paid PRSI.
At the moment, you need an average contribution of 48 wks for each year you paid PRSI, so the years spent paying PRSI after the first 20 are all helping to meet the 48 target.
the first 20 years paying PRSI is accruing CSP benefits, as will the next 20 years spent paying PRSI.
No PRSI is "wasted", although it's true that somebody with 39 years paid may get the same CSP as somebody with 40 years paid PRSI.
At the moment, you need an average contribution of 48 wks for each year you paid PRSI, so the years spent paying PRSI after the first 20 are all helping to meet the 48 target.
Early Riser
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If this person retires at 65 after 20 years teaching and never was a PRSI contributor previously he/she will probably get the same total pension as the colleague with the same service and 20 previous years in the private sector. This is because of the strange eligibility criteria for the State Contributory Pension, rather than anything to do with the public versus private sector per se. Look at it this way - If the first person works from 45 to 65 in the private sector and never was a PRSI contributor previously, he/she would probably get the same State Pension as a colleague working for 40 years.(I say "probably" because of my limited understanding of the State Pension calculations).
However, I suspect it would be unusual for a person to become a pensionable teacher at 45 and have never been subject to PRSI previously. If, for example, he/she paid PRSI for a few months in their 20's it would change the calculations
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Early Riser
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In my opinion,it all comes down to this - Was this hypothetical person ever subject to PRSI before taking up the teaching job ? If no, then there would no difference in the State Pension and, therefore no difference in the overall pension (assuming they both retire at 65 with no gap in PRSI record after taking retirement). It all comes down to the "Averaging Rule" for the State Pension - see here :http://www.citizensinformation.ie/e...etired_people/state_pension_contributory.html .
If the person had been subject to PRSI, even for the briefest of periods earlier in life, then the lifetime average PRSI contribution record would change resulting in a State Pension change.
The amount of occupational pension paid directly from the Dept of Ed would be exactly the same, if they both had the same pensionable salary and 20 years service.
Also to note that that changes to the eligibility criteria for the State Pension have been mooted from time to time. The current averaging rule may not always apply.
Can you give me the Ladybird version of that please?
I've read the link relating to the Averaging Rule but I don't understand it.
Lets say they worked for 20 years in the private sector and paid PRSI for 20 years and then went into teaching, retiring after 20 years in a salary of €50'000. What pension would they get?
Early Riser
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Frustratingly there is not a straightforward answer as it depends on a number of things- when the person took up the teaching post (and which scheme he is in), when he first paid PRSI, etc. However, here is an example :
John D.O.B 1/5/1952
First Employment in private sector (first PRSI) 1/5/77
Teaching Job 1/5/1997
Retirement 1/5 2017
Pensionable Salary €50000
Occupational Pension (Dept of Ed) €6412
State Pension (at 66) €12391 (full rate)*
*As the State Pension is not payable until 66 John would have to sign for Jobseeker's in the meantime - or apply for a supplementary pension but let's avoid this complicating factor.
If John is only taking up teaching now he would be joining a different scheme with different calculations.
Do you know what that calculation would be?