Notional service or AVCs for post-95 civil servant

D

Dr Strangelove

Registered User
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What’s the best option for a civil servant wanting to top up pension entitlements?

Some details below:


Age: 46
Entry: post-95, pre-2004 civil servant
Years of service: 15 to date, a lot of career breaks and parental leave
Salary: €96k gross but on half-time pattern likely to remain so for 3-4 years. Top of salary scale €105k which will be reached. One further promotion possible but not currently desired.
State pension: likely to have 2080 contributions by 63 or 64
Private pension fund from previous employment €80k can be ARF’d any age from 50
Overall wealth: mortgage €300k on €1m house owned with husband, on track to be paid off by 65.

It would be nice to have the option to retire at 60, although not essential to have the 40/80ths needed for full pension. ARF could be created at age 60 point so that PRSI is paid to get full 4080 credits.

My question is which is better value for her: notional service purchase or AVCs? If notional service should it be done before she’s on top of salary scale?

There is a key post on this from 2007 and am wondering if anything has changed since then.
 
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From my experience of post 1995 pension past 2yrs myself, Definitely AVC,S , once you have 20 full yrs of service you can drawdown equilavent of 1.5 times salary, in this case 20yrs from work and the other 20 from AVC,s
Plus i bought notional service but now Garda Pensions are saying the supplementary part of my pension circa 33% stays at the same amount until you reach 66 oap age so a no brainer - AVC,S
 
stoves1 said:
once you have 20 full yrs of service you can drawdown equilavent of 1.5 times salary, in this case 20yrs from work and the other 20 from AVC,s
Click to expand...

Just to add to this....

When using the 'uplifted scale' as described above (and not the straight 3/80ths for each year of service), retained benefits have to be factored in I believe (Ref 1).

If someone with 20 (or more) years' service wished to augment the benefits receivable from the public sector scheme with AVCs (for lump sum funding purposes) up to 1.5x, then the lump sum from the pension relating to the previous employment (from the €80k private pension described above) will need to be factored in.

Ref 1: See part 7.2 here
 
S class said:
This is easily achievable. Two separate employments over a 40 year working span.

104 multiplied by 40 = 4160
Click to expand...

Yep. I learned multiplication in primary school too!

However, the information supplied by the OP suggests that he hasn't ever had two separate employments at the same time!
 
Calculate the cost of the certainty of NSP using this

Use the contribution arrived at above to estimate (using a growt rate of your choosing adjusted for charges) the might-be-more / might-be-less total fund at selected retirememt age.

You can then weigh up the advantages/disadvantages of going down either route and what kind of flexibility (if any) you need.

Nothing to stop you doing a bit of both, either.

Gerard

www.prsa.ie
 
Could anyone point me in the direction of where I could get some more information on something I heard about public sector pensions that sounds a lot like a post above

namely, if you attain twenty years service, you are entitled to fund to 2/3s of final salary...it seems to be similar (but not the same) to the post above in that it says with 20 years you can fund to 1.5times final salary with AVCS

Does that apply to post 2004 pre 2011 entrants, does it mean you could get twenty years service, go do another job but continue to contribute to an avc related to that ps role (with the twenty years built up) to fund a pension worth 2/3 of whatever your final salary on the scale you were on would be which you could then drawdown at that roles normal retirement age? Or am I getting it all wrong?
 
As far as I am aware you cannot contribute to the AVC linked to a PS employment when you leave that employment
 
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