Single Scheme Pension - Do I need 47 years service to get full pension?

[Fields]

Age:25
Salary: €50,000 approx
Joined service in 2016 age 21.

Just some background, I joined the civil service in 2016 and I'm now in a middle management role 4 years later. Over the last week or so I've been looking into the Single Public Service Pension Scheme (introduced in 2013).

It would appear my 'normal retirement age' is 68, this would be after a full 47 years service! If I were to retire at 61 (after the standard 40 years) I would come under 'cost neutral voluntary early retirement' doing so would result in a 23% reduction of my pension and a 2% reduction of my lump sum.

I was quite surprised to read this. I was aware of the new scheme being based on a percentage of career average as opposed to final 3 years etc..But I didn't know that 40 years service is no longer being counted as full service.

My question is, what is the best approach to make up this 23% shortfall in my pension if I retire age 61. Is it an AVC, possibly through Cornmarket? I believe an AVC would also be reduced by an actuarial amount should I retire early. Is there any other product for me?

I'm also aware it might be a cause for some of you to have a small laugh about a 25 year old being this concerned about a retirement event that is 35+ years away. But just 47 years seems a crazy length of time, and going after 40 under "voluntary" retirement might be more appetising! And I'd prefer to make use of some marginal tax relief on contributions now this early in my career, than regret not doing it when I'm 60 and thinking of retirement then.

I haven't been able to find much info online outside of cornmarket guides.. This could possibly be because it's an issue that hasn't arisen yet as everyone under the single scheme who will have 40 years service by retirement are probably all about my age and early in their career!

Really appreciate any help!

 

[Itchy]

You’re young, do you have all your personal finance bases covered? Debt paid off, house deposit saved (or a plan to) etc.?
A big consideration in making AVCs will be fees. Cornmarket would probably not feature in a Best Buy list.

 

[NoRegretsCoyote]

You will stop accruing entitlements after 40 years but will only be able to retire after 47 indeed.

TBH it is far too early in your life to be worrying about this. If you have a family (or even if you don't) you will probably take some combination of term time, reduced working hours, career break, etc, some time between now and 2063. All of this reduces your pensionable contributions!

 

[Early Riser]

You will stop accruing entitlements after 40 years but will only be able to retire after 47 indeed.

I am not too familiar with the Single Scheme but I have not come across anything in the documentation to indicate that accrual ceases after 40 years. I suspect that it is does not as the pension is based on career average earnings. Have you any reference for the 40 year cut-off?

My question is, what is the best approach to make up this 23% shortfall in my pension if I retire age 61. Is it an AVC, possibly through Cornmarket? I believe an AVC would also be reduced by an actuarial amount should I retire early. Is there any other product for me?

I agree with the others that retirement seems an awfully long way away for you, and you may have more immediate priorities than enhanced pension provision.
However, just to not a few things. If you are determined to add to your pension so as to have an early retirement option then an AVC would be the way to go. You have two choices - a straightforward AVC via Cornmarket with direct salary deduction or a PRSA-AVC via an independent provider. Setting this up is a little more cumbersome but several posters have indicated that they have done better as regards fees and charges by going this route. These add up significantly in the long term.
An AVC fund is not actuarially reduced in the case of early retirement. However, the total tax free lump sum limit allowed by Revenue is reduced somewhat depending on how early the retirement is. However, these are all current rules and a lot could change in 37 years!