Paying extra into my pension - questions

C

colly

Registered User
Messages
184
Hey Guys,

I'm 27 and work for a large multinational software company. It is now time to do our benefits for next year, and I have some questions around my pension. The normal is that I pay 2% and they pay 8% into my pension but I have the option of adding more in myself. I was thinking of putting in an extra €200 a month - cause really after tax it only costs me an exta €120 or so. My dad is always on at me to make sure to put as much into my pension as possble - I'll be glad I did later.

However, some people in work say that there is no point in extra contributions unless I plan to stay in the company for many years. Somehting about it not being worth it if I have to transfer the pension elsewhere.

Can anyone tell me how this works?
 
colly said:
I was thinking of putting in an extra €200 a month - cause really after tax it only costs me an exta €120 or so.
Click to expand...
If you get full high rate tax (41%), PRSI (4%) and health contribution (2%) relief on this then it will only "cost" you €106.
My dad is always on at me to make sure to put as much into my pension as possble - I'll be glad I did later.
Click to expand...
Perhaps - are you saving towards a house or anything like that in the meantime?
However, some people in work say that there is no point in extra contributions unless I plan to stay in the company for many years. Somehting about it not being worth it if I have to transfer the pension elsewhere.
Click to expand...
Doesn't sound right to me. You can normally (always?) retain the benefits of your own personal and AVC contributions. You can retain the benefits of your employer's contributions after 2 years membership of the scheme.
Can anyone tell me how this works?
Click to expand...
Check the rules/policy booklet of your specific scheme.
 
ClubMan said:
You can retain the benefits of your employer's contributions after 2 years membership of the scheme
Click to expand...
Yes I think that's what they meant... It's with Mercer. I've been in the company and in the scheme for about 16 months. I'm sure I'll be here for another 8 which will bring me up to 2 years. So as long as I'm in it for two years it's ok. Or is that 2 years from now?
 
The 2 year vesting period on employer contributions has no bearing on your own personal and AVC contributions. You retain the benefits of the latter even if you don't serve 2 years in the scheme. You only retain the benefits of the employer contributions if you serve the 2 year vesting period (unless the scheme rules have a shorter vesting period).
 
You must log in or register to reply here.
Back
Top