Post 2004 retiring at 62 and integrated pension 'claiming jobseeker's'

I hope to have 22 years service done at 62 in the civil service. I am post 2004 so my pension is integrated with social welfare. I know that the civil service will only pay supplementary pension if I can prove I have claimed all funds to which I am entitled from social welfare.

Do I try and claim jobseekers from social welfare at 62? I won't be technically seeking a job, having retired. I know that if I pretended to be seeking a job then I could get 9 months jobseekers payment out of my 'stamps' as I have worked all my life. I am sure they would wonder why I retired from a permanent job and signing on as unemployed.I do not want to go for a means test as I have some savings. Ideally I would tell social welfare that I have retired, not undergo means test and claim supplementary pension from Civil Service. I know that I would have to pay a few hundred a year to keep my prsi active between 62 and 68.

I would be concerned that if I retired before the 67 rising to 68, and did not undergo means test with social welfare, claim jobseekers etc, then the Civil Service may refuse to give me a supplementary pension. Because the pension is integrated, I would only get a few thousand a year from the Civil Service directly, not enough to live on. If I had already retired and this happened, then my lump sum would be spent on living expenses between 62 and 68. I have visions of going between Social Welfare and Civil Service between 62 and 68, trying to 'prove' myself in order to get the supplementary pension.

It seems like the Civil Service are almost 'forcing' people to work til 67 or 68, as the integrated scheme means claiming the initial 12k of a pension and having to 'prove' you are not eligible for social welfare payments makes it complicated.

Was there ever a case where Civil Service did not pay a supplementary pension and a person was left with a few thousand a year to live on? Do social welfare understand that civil service retirees have to 'sign on' and are not genuinely seeking work?

buzybee said:

Do I try and claim jobseekers from social welfare at 62? I won't be technically seeking a job, having retired.

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There is a condition that you can't get jobseekers if you have voluntarily left a job. This is usually ignored by DSP, but they know that civil servants are very secure so it might not be so simple.

buzybee said:

It seems like the Civil Service are almost 'forcing' people to work til 67 or 68, as the integrated scheme means claiming the initial 12k of a pension and having to 'prove' you are not eligible for social welfare payments makes it complicated.

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AFAIK for a post-2004, pre-2013 retiree the situation is follows. From 65 until you reach 66 (or whenever state retirement age is by then) the public service pension will "supplement" your pension as if you had qualified for a contributory state pension on your 65th birthday. An example. Suppose your "integrated" pension is €300 a week, of which €248.50 is contributory state pension and €51.50 is the public service part. Between your 65th and 66th birthday the public service will give you the normal €51.50 and a "supplementary" pension of €248.50. In this example I am assuming you qualify for a full contributory state pension, in reality you might not, but you get the principle.

It might help if you tell us:

1. Did you join PS before 2013?
2. What is your year of birth?
3. Will you have 40 years PRSI contributions at 62?

Thank you for your answers.

Yes, I joined the PS i e. Civil Service in 2007.

My year of birth was 1971.

I take some unpaid leave, shorter working year, so I probably would have 22 years service when I am 62, but I would have been in the Civil Service for 26 years.

I should have the 40 years contributions at 62 as I worked fulltime from 20 until 42. Even now I work about 90% fulltime and take 2 to 4 weeks unpaid in the summer. I am aware that I could make prsi contibutions for the 2 to 4 weeks that I am out of work in the summers.

So at 65 you should get 22/80 your final salary as pension. That'll include a full contributory state pension at 66, and a "supplementary" pension of the same amount the year before that. You'll also get your lump sum at 65.

So basically you have to bridge the gap between 62 and 65. One option is a private pension fund which you can access at 60. You will get some relief on the contributions between now and then. There is some risk with this of course.

This is kind of a money makeover question. It's hard to give advice without knowing salary, whether you own a house, spouse's income (if any), etc.

I have a partner and we own our house. My partner is a bit older so will retire before me. I thought the Civil Service would pay supplementary to all who retire between 60 and 66 and are not working. The idea is not to put post 2004 at a disadvantage to pre 2004.

Currently, if Civil Service don't pay the supplementary pension, then I would have about 8k a year paid directly from Civil Service. I am considering buying back a few years which would bring this amount to 9 or 10k. With this and using 7k savings a year towards living, it may be manageable.

buzybee said:

I thought the Civil Service would pay supplementary to all who retire between 60 and 66 and are not working.

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Only if you have 40 years service before 65. Not too many people will be in this category.

You could look at an actuarially reduced pension. Look at Bullet 13 here. If you retire at 62 it will pay 84% of your 8k for life. You would also get 94% of your lump sum straight away which would bridge the gap until 65.

When I asked the banks about a private pension, they were talking about buying an annuity and not being able to access til 75. This defeats the whole purpose as I would like to do something which means I don't have to keep working until I am exactly 67 or 68. They said that I can only deal with Civil Service approved firms for avcs. The charges for avcs put me off and you are not guaranteed X amount. If markets went down at your retirement date, you would have to encash these exactly on retirement no matter what. I know people move the funds to less risky markets approaching retirement.

I have been paying tax at the lower rate until recently so making extra pension contibutions would not have been a great tax saving until now.

I am considering buying back a few years using peroidic contibution as at least I can access these directly when I retire, even if at 62.

I save something with a funds index, no tax relief, but I could access these anytime, even in late 50s if I wanted to go part time on a 3 day week. I save 1.5k a year with these and have done 8 years now.

Would there be anything else I could look into?

buzybee said:

I save something with a funds index, no tax relief, but I could access these anytime, even in late 50s if I wanted to go part time on a 3 day week.

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I'm not the expert but I would say it's better to put it in a pension product with tax relief at higher rate that you can access at 60.

If you are very risk averse and don't like charges you can just put spare cash into state savings.

NoRegretsCoyote said:

There is a condition that you can't get jobseekers if you have voluntarily left a job.

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I don't think that's correct. It's that "You may be disqualified from getting a jobseeker’s payment for up to 9 weeks".

Am I correct in saying that you are now aged 50, and you are worrying if you have to claim jobseekers when you are 62 when you hope to retire, i.e. in 12 years time?

To me, this is worrying about something too far into the future. Anything can, and will, happen in the intervening 12 years, both to you and the pension/social welfare.

If it were me, I'd be concentrating more on what I can start doing now, e.g. AVCs to bring up my pension so that I will be in a better position to retire at 60/62/65 or whenever. Starting to pay AVCs for which you will get 40% tax relief now (as you said you have recently risen to the higher tax band), will be far more beneficial to you.

I'd suggest you do a money makeover, and see what (invariably good) advice you get here.

If you start your AVCs before the end of October, you can also put in a lump sum for last year to bring you to the max (assuming you have the money of course).

Thank you for the advice. I already pay 65 euro a week pension contribution. This is not voluntary and all civil servants have to pay this. I am already arranging to buy back a few years using periodic contribution. I know this will cost another 60 euros a week on top of the 65. It is a bit disappointing to be paying so much and still have to supplement living costs with savings if I retire in advance of 67 or 68. I know that if I do avcs I could very well be paying up to 200 euros a week and still no guarantee of avcs performing adequately to fund retirement.

All the literature say you should think ahead, and I am trying to think ahead and make adequate provision for myself. At least now I know that making any kind of provision will cost a considerable amount.

I am not an expert on this, but there are two ways of increasing your pension contribution, ie. your €65 per week.

1. Buy notional years, i.e. pay to add years to your pension, as if you worked them. This is only available to public servants, and may or may not be good value for money. You may have to live for quite a long time to get back what you paid. I know it use to be cheaper to do so, but the rules changed. Someone with more knowledge on this option may pipe in.

2. Pay into an AVC fund which is essentially paying into an investment fund that gets tax relief but can only be accessed when you retire. The advantage is that you get tax relief now, and that you can use it to increase your tax free lump sum when you retire (up to the maximum). The amount you put into AVCs is up to you, there is a maximum but no minimum.

Regarding your comment that AVCs may not perform adequately, You could also die the day after you retire, and all the years you bought back will be gone. At least with AVCs you have a fund that will be transferred as part of your inheritance.

I'm not trying to suggest one over the other. I have no idea of your circumstances, that is why I suggested doing the money makeover. It does sound like you are arranging to buy back years, but I don't know if you have looked at all the options, and costs of same.

I benefited from buying back years, starting about 15 years ago, up to about 5 years ago. I've been advised by two separate pension advisors, both experts in public sector pensions, that the rates currently charged for buying back years are not competitive, and I'd be better off putting any spare funds into an AVC rather than starting a new contract to buy back more years.

What firms would deal with avcs? I know Cornmarket do, but people say their charges are high.

I think your AVCs have to go through your existing pension plan/provider, you can't just chose anybody yourself. it is tied into your existing contributions.

My advice is to do the money makeover. Don't think about specifics like cost of charges for a specific company on a AVC fund that you don't have. In my opinion, you need to look at the big picture first. For all we know you could have a mortgage that you are paying 6%, or an outstanding credit card charging 12%. Or a car on PCP that is costing more.

It is impossible to give suggestions without knowing your circumstances.

buzybee said:

What firms would deal with avcs? I know Cornmarket do, but people say their charges are high.

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IPS Financial Advice do an initial free consultation, and have good knowledge of public sector pensions in my experience. They can set up AVCs after the consultation as required.

Money makeover done, thanks to all