Pensions in private v public sector.

[world201812]

Mid-30’s, mulling over a possible move to the public sector from private.

Earning 45k approx, and new role potentially slightly more.

I understand that with pension deductions and levies in the public sector, my take home, even on a higher gross salary will be in and around what I am on.

I’ve also been alerted to the Single Scheme public sector calculator and I am shocked.

Shocked by the lump sum figure upon retirement, and the annual pension income, especially given higher contributions.

I put in 50k salary, and approx 21k is pensionable income plus lump sum of 53k. Both are not as high as I expected in light of what I’ve seen from family members who retired over the years.

I understand the new public servant terms and conditions are not as good as before.

Contrast of that is I am in private sector job, pension is DC not DB, and the salesperson from private pension firm who presented to us didn’t seem convincing when it came to question ‘how secure is it’, 30 years from now.

Have I really just missed the boat on pensions having not joined the public sector 10 years ago? Am I better off pension sticking where I am.

What do I do with a pension pot from my private sector life?

This can be drawn down from 50 years of age I understand, but can I transfer this into my new public sector scheme if I join, and boost my pension when I retire?

Any advice or tips would be greatly appreciated.

Has anyone else made a similar move, have any better insight?

I am a financially conservative person, and my current pension provision appears risky/far from guaranteed, whereas the certainty of the public sector pension looks like a less risky option.

Is there any chance with the economy improving that the contributions for public servants will be reduced/or benefits might be improved if unions apply pressure etc?

 

[Slim]

Your numbers are about correct. If you earn 48k and work for 30 years. Under present PS scheme, you would be entitled at 65, after 30 years service, of (48x.5)x.75, cos 40 yrs is max service, giving you a pension of 18k plus lump sum of (48x1.5)x.75 giving you a lump sum of 54k. The pension will include 12.7k state pension. It's not great but it's not full service either. If you were retiring now, you could use your PRSA or private pension to purchase notional service. I'm not sure that you can do this under the new Single Scheme.

I wouldn't bet on better conditions for public servants in the future, worse if anything. You can keep your private pension, I think, and add to it to make up for short service and maximise your tax allowances.

 

[Early Riser]

This can be drawn down from 50 years of age I understand, but can I transfer this into my new public sector scheme if I join, and boost my pension when I retire?

This option is currently not available in the Single Scheme. From the booklet:

Can I transfer benefits from prior private sector employments?
The option for a member of the Single Scheme to transfer in benefits from private sector pension
schemes or affiliated arrangements is not available at present but may be subject to the making of regulations in the future by the Minister for Public Expenditure and Reform.

Can I pay extra contributions?
The option to purchase additional retirement benefits within the Single Scheme is not available at the moment. However, depending on your circumstances, you may be able to make additional voluntary contributions to separate Revenue-approved pension arrangements (e.g. an AVC Personal Retirement Savings Account or a trade union-affiliated AVC Scheme) if you wish to independently increase your retirement benefit outside of the Single Scheme. As your employer cannot provide you with
financial advice, you should seek financial advice independently.

https://singlepensionscheme.gov.ie/wp-content/uploads/2017/12/Scheme-Booklet.pdf

 

[cremeegg]

Mid-30’s, mulling over a possible move to the public sector from private.

There are many more important issues involved than a possible difference in pension income.

Where would you like to spend the next 30 years for a start.