Public and Private Pension

B

bill_cash

Registered User
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Hi guys,

Maybe this a stupid question but I've recently been offered a job in the PS and am a little confused.

I currently have a private pension and in conjunction with my employer contribute 20% per anum (the max tax free for my age).

My new job will be pensionable (I've never worked in the ps before so will be a new entrant) and I will have to pay the pension levy.

Is it possible for me to put 20% of my gross income tax free into a private pension and also pay into the public sector pension?

Thanks,
B
 
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You can contribute to the PS pension, and then possibly do AVCs.

I'm not sure about AVCs with the new Single PS pension, but they may be possible.

Look up the Single PS pension scheme.

Others here may have better answers.
 
Also, note that all public servants (except civil servants), pay regular pension conts 6.5%, and then they pay the PRD on income over 32k approx.
 
You can do AVCs if you are in the Single Scheme. What you pay towards your Single Scheme pension has to be deducted from your total age-related contribution limit. So of you are aged 30-39 the Revenue contribution limit is 20%. Once you allow for how much you are paying towards the Single Scheme pension you can do AVCs up to this limit (which increases as you get older).

They have also introduced a new arragement lately whereby you can transfer in benefits from certain private sector schemes into the Single Scheme. It seems quite complex and I am not sure if it is worth it - unless you are concerned about the future viability of the private sector pension :https://singlepensionscheme.gov.ie/...-the-Single-Public-Service-Pension-Scheme.pdf
 
Thanks Early Riser, that is good to know.

Does this look correct:
Say I earn 72K

ASC:
0-32K = 0% = €0
32k-60k = 10% = €2800
60k-72k = 10.5% = €1260

Total ASC = €4060.

So as a % of total income €4060/€72000 = 5.6% for ASC

Also protocol mentioned that public sector pay regular cont of 6.5% so that would give me a total contribution to the single scheme of 5.6% + 6.5% = 12.1%.

Would that then mean that as I am 30-39 I could put in AVCs of 20% - 12.1% = 7.9% per anum until I hit 40?

Could I still pay those AVCs to my current private pension or do they need to go into the single scheme?
I'd rather keep my private pension as I'm still relatively young and not comitted to staying in the public sector long term.

Thanks
 
bill_cash said:
Does this look correct:
Click to expand...

I am out of the loop for a while but by my amateur calculation your figures are incorrect.

Firstly, I understand that the PRD does not count towards your revenue tax free threshold of 20% - even though it gets tax relief in itself. See Q 30 & Q 31 in these FAQs :http://www.cspensions.gov.ie/faq5.pdf .

Secondly, here are my calculations on your contributions towards the Single Scheme (based on P10-12 of the Single Scheme Booklet: https://singlepensionscheme.gov.ie/wp-content/uploads/2017/12/Scheme-Booklet.pdf. Note that The State Pension is currently about €12900 so the CSP offset is now about €25800.)

Salary = €72000.
Pension contribution is approx €3777 (€72000*3% + 46200*3.5%).

Your can claim tax relief on 20% of €72000 = €14000. So after deducting your Single Scheme contribution of approx €3777 you could pay the balance towards an AVC.

Third point. You cannot pay this as an AVC into your current private pension. You would have to start an AVC specifically linked to your PS pension.. This could be one linked to your payroll for deduction purposes for which the Brokers are usually Cornmarket. This is convenient as tax relief is granted automatically at source. You set this up through the Brokers - your pay office and probably your colleagues should be able to point you in the direction. Alternatively you can set up your own PRSA AVC - this may be better as regards charges, but you do not get tax relief at source - you have to claim it seperately yourself from Revenue.

This booklet from the Pension Authority is somewhat dated and more aimed at earlier PS pension schemes (pre Single Scheme) but you may find the section on AVCs useful :[broken link removed]

And here is Cornmarket's (promotional) brochure :https://www.cornmarket.ie/uploads/13292_AVC_Scheme_Member_SQ_Booklet_08-18_REBRANDED_FA_WEB.pdf .
 
Hi all. Does anyone have confirmation that the Additional Superannuation Contribution (ASC) doesn't count toward the Revenue annual % limit for tax relief on contributions? The document below just confirms that PRD didn't. I haven't been able to find anything online about it.

Early Riser said:
Firstly, I understand that the PRD does not count towards your revenue tax free threshold of 20% - even though it gets tax relief in itself. See Q 30 & Q 31 in these FAQs :http://www.cspensions.gov.ie/faq5.pdf .
Click to expand...
 
cpt_boom said:
Hi all. Does anyone have confirmation that the Additional Superannuation Contribution (ASC) doesn't count toward the Revenue annual % limit for tax relief on contributions? The document below just confirms that PRD didn't. I haven't been able to find anything online about it.
Click to expand...

Hi,

According to this Cornmarket booklet the ASC does not count towards the Revenue tax relief limits - see Page 7 :

 
ASC replaced the PRD, so it effectively the same terms as the PRD for the purposes.

Your pension contributions are untaxed income that offsets your income tax paid i.e. an outgoing

ASC is a "contribution" (read tax) -> it travels outwards only.
 
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