Public sector pension if retiring early without full PRSI stamps

T

TheJackal

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I'm Post 2003, half final salary for pension if 40 years service. Normal retirement age 65, hoping to go early at 60.

My current pension after actuarial reduction for going early is looking like €38K, of which €14K (I've rounded all figures) from State Pension Contributory (SPC) and €24K balance from Dept. This matches exactly the online calculator National Shares Services provide.

However, by going at 60 I wouldn't have the full 2,080 PRSI contrubutions (40 years x 52 weeks) for the full €14K SPC. I reckon it'll come to €10K pro rata per annum.

So my question is would my pension be
Age 60-65: 28K total, of which €0 from SPC and €28K balance from Dept
Age 66+: 38K total, of which €10K from SPC and €28K balance from Dept
 
Your calculations seems right to me.

Beteeen 60’and 66 you can work part time to get a SPC which could increase your contribution numbers. Part time could be as little as a few hours a week.

Plus the pro-rata of the contributions won’t be fully implemented for 10years, so you may benefit a bit more than your calculations. The process is listed in other topics. I just cant put in a link right now.
 
If you contribute AVCs you can boost your tax-free lump sum at retirement, but you can also put the rest into an ARF at 60 and draw enough income from it each year to generate Class S PRSI contributions between 60 and 66.
 
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Depending on the scheme and your minimum retirement age, you may be eligible for a supplementary pension to make up the shortfall from the job seekers benefit / contributory state pension.

The other key point is any actuarial reduction on taking the pension at 60. Key to this is the minimum retirement age. If you go after the minimum retirement age, there will be no reduction. This varies by scheme and date of joining.
 
DingDing said:
Depending on the scheme and your minimum retirement age, you may be eligible for a supplementary pension to make up the shortfall from the job seekers benefit / contributory state pension.

The other key point is any actuarial reduction on taking the pension at 60. Key to this is the minimum retirement age. If you go after the minimum retirement age, there will be no reduction. This varies by scheme and date of joining.
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Regarding the actuarial reduction - I was wondering what happens if someone has an AVC to top up TFLS sum but then retires before normal retirement age. Can they still top up their TFLS to 150% final salary even if, for example, the actuarially reduced TFLS is reduced to 90%. Lets say someone retires on a salary of 80K after 30 years service. They should be entitled to 90k TFLS that they can top up to 120k with an AVC. If they decided to take CNER after 25 years and their TFLS was reduced to 90% (81k), can they still use AVC to top up to 120k or could they only top up to 90% of 120k (108k)?
 
I was wondering what happens if someone has an AVC to top up TFLS sum but then retires before normal retirement age.
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@poorrelative

I believe that if retiring before normal retirement age, the Revenue guidance for the maximum lump sum in this situation is the greater of:

(a) 3/80ths of final remuneration for each year of actual service, or

(b) N/NS x LS

Where:

N = number of actual years of service
LS = the maximum lump sum receivable had the employee served until NRA less retained benefits
NS = number of years of total potential service to NRA had service continued until then.

In your example:

(a) equals: 3/80 x 25 x €80,000 = €75,000

(b) equals: 25/30 x (1.50 x €80,000) = €100,000

If the scheme pays out €81k under CNER, then there is room for a €19k top up via AVC.
 
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Interesting, I'm always assumed it would be 1.5 times your max lump sum if you had 40 years, so 120K above.

I've been paying into an AVC with that goal in mind
 
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