pension at 65 if you didn't work at all for last 10 years?

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diyguyjoe

Guest
This may be a really stupic question but here goes...

With regards to the rule whereby you can't get take a pension for more than 2/3 of your final salary, or something like that, the final salary being the average of the 3 best years of the previous 10, what if you don't work at all from age 55 to 65?
Let's say you've worked as a PAYE worker all your life and contributed AVCs so your fund is worth 500k at age 55.
What would happen then at age 65?

thanks very much
H
 
Not sure of what exactly your concern is....

..but when you retire at 55 you are allowed take benefits up to a max which normally is a pro rata of the 2/3rds you would recieve on attaining 65. You decide not to take these benefits yet. This limit is then increased each year in line with inflation up to the date you take benefits. Hope that makes sense.
 
Re: Not sure of what exactly your concern is....

Hi Alan
thanks for that.
Sort of. I just thought that 2/3 was based on what you had earned in the previous 10 years up to age 65. That's obviously where my thinking is wrong then.

thanks
H
 
pension

I thought that you can take a pension up to a 2/3 of the max of the average of the 3 best years in the last 10

So if you were made redundant at say 55 on say 60k p/a and then worked and a lower income job for the last 10 years, say 30k p/annum then your max allowable pension is now 20k p/a .

is this wrong ?

F16
 
Re: pension

Flash,
Your forgetting,if you were made redundant from first company and deferred pension as Alan suggested this is seperate from the pension with the new job.

So the amount of money that you get paid in pension from first job will be independent on the money that you get from the pension with the second companyas the second company is most likely running a DC pension
 
Re: pension

A further point is worth making in relation to the definition of the salary at retirement. In respect of employees whose service has terminated at a date other than normal retirement date then that date can be substituted for normal retirement date in calculating final remuneration. In other words, if you don't work past age 55 then the 10 years you mention runs to 55. The resulting figure can then be increased by the Consumer Price Index.
 
l

but what happens if you were on say 100k
up to 55 and then work for 40k until retirement
so entitlement is max 2/3 of the average of your
best 3 years in the last 10

F16
 
Re: l

Yes flash, I'd be interested in that too. I would imagine doing something like that could be quite common, so-called downshifting?
 
Can be done.....

If you were to downshift I would imagine that you would work less hours. Part time rules come into play which can be a little complex to explain in full, so I won't. There are two methods of calculation (a) as if you had switched employments and (b) converts the part time service to the full service equivalent. Hope this helps somewhat.
 
Pleasant Reading.....

[broken link removed]

Have a read of this.
 
Revenue Limits

Hi Flash

Under Revenue limits, you can always receive a pension of 1/60th of final remuneration per year of service, regardless of any retained benefits from previous employment.

Let's say you leave a job at age 55 on a salary of €100,000 per annum and a preserved pension of €50,000 per annum payable from age 65 and join a new job paying €40,000 per annum. Let's assume that both your preserved pension and your salary increase by 20% in total over the next ten years.

On retiring from your new job at age 65, you can receive a pension from that employer of 10/60 * €48,000 = €8,000 per annum. You will also receive €60,000 per annum from your old employer's pension scheme.

Your total income in retirement will therefore be €68,000 per annum, which is €20,000 more than the salary you were receiving immediately before retirement.

Regards
Homer
 
I can't get information.

Alan Moore.You say that a persons pension if they retire at age 55 is increased each year with inflation. What rate of increase is used and is this set by the Pensions Board.?

In my own case I retired at age 50 and received a statement at time of retiring telling me what I would receive at age 65, (defined benefit). Since that date I have received nothing from anybody telling me that my pension has increased by x€ re inflation etc. The pension people that I deal with say that as I am now officially retired they do not have to send me an annual statement.
 
Inflation / Revaluation

There are two different issues here.

I was originally referring to revenue limits i.e. the max the revenue commissioners will allow the scheme give you. These limits increase in line with the normal increase in inflation figures as released by the CSO each month.

Preserved pensions ( i.e. the benefit not the limit )increases in a different way. Have a read of the following ( under the heading revaluation of preserved benefits )

[broken link removed]

If in any doubt, I would suggest you contact the scheme advisors. They should give you all the info you require even if they won't send an annual statement.
 
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