Pension Top Up

redwood park

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Hi.Can somebody please help. I have to retire (from Co.Council) at age 65 on 20-08-2010. Between Civil Service and Co. Council I will have 14.46 years service. I Job share with salary of 19,778 Euros per annum. I did inquire from HR about buying years but was told because I am too near retirement I would not qualify. I Pay tax at 20%. Is there any point buying AVCs. I could afford to pay in maximum amount allowed this year and next year. If I have to pay 20% on sum when I retire what is the advantage. Advice appreciated. Many Thanks
 
Redwood,
I am presuming you are a clerical officer i.e. an indoor staff member. One option (if possible) to top up your pension would be to return to full-time hours. This would increase your service and aid your superannuation entitlements.
In answer to your question your HR Dept. are correct in stating you cannot purchase years periodically i.e. weekly/fortnightly etc until retirement, payments would have to have commenced at the latest at 63. They are incorrect if they have advised that you cannot purchase service by lump sum i.e. one off payment, at any time prior to retirement. Purchasing notional service is expensive, to buy one year for pension purposes would cost approximately 25% (depending on your age at payment and your PRSI class) of your gross fulltime salary i.e. €39,556. You would get tax relief on the payment.
AVCs are outside the Local Government Superannuation Scheme, therefore you need to see a financial advisor to discuss. Ask about a "last minute AVC", which if I understand correctly basically means you put in a lump sum into an AVC prior to retirement receive the tax relief on it and then can get lump sum back after retirement. However it is more beneficial to those on the higher rate of tax.

A few questions that you would want to make sure you have checked out before retirement:
1. has all your service with all public sector/ semi state bodies been taken into account.
2. If you received a marriage gratuity (if female) in the past have you examined paying it back to get the benefit of service prior to gratuity.
3. You have CS and LA service were they in different PRSI classes i.e. D class or A class. If for example you worked with the CS from 1983 to 1992 you would have 9 years at D class, this would be one pension calculation. If you left the public sector and returned in 1999 job sharing with local authority you would have a separate pension calculation at A class.

Hope the above is of some help,
E
 
Thank you for all information.Just to clarify I am a clerical officer grade. I worked in CSfor 7.76 years from Nov 1963 to August 1971 when I married. I was paid gratuity of 760 Euros which I repaid 1n 2002 with compound interest of 6% (total 4883E). I later got tax relief on interest paid. I started work in LA in March 2001 and hope to continue until August 2010. I got forecast of pension from HR. I will get 18,400E lump sum and 2790E per annum.I will have 14.46 years service between CS and LA. Can I take it buying years is too expensive and AVCs are not an option if I only pay tax at 20% ? Many thanks for your help and time.Much appreciated.
 
Buying years is expensive, but it is your choice. AVCs I really don't know enough about to advise however there would be no harm to seek advice from an AVC advisor.
Best of luck with your retirement, you won't feel the next year going.
 
Buying years is expensive, but it is your choice. AVCs I really don't know enough about to advise however there would be no harm to seek advice from an AVC advisor.
Best of luck with your retirement, you won't feel the next year going.
There are very few AVC advisors out there. Lots of salespersons, but few advisors. Don't mix up the two.
 
Thanks Tentman. Looked on welfare.ie. Who makes up the rules to qualify? I will apply anyway when time comes. Thanks again to all who replied.
 
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