TCA and full state pension for public servants

[poorrelative]

Me and Mrs PR are both public servants since 2000. I think are both eligible to retire at 60 (currently 54 and 55). I understand that we can claim the supplementary pension from 60-66 until the state pension kicks in. I assumed that since the state pension is an integral part of our public sector pension that we would both be eligible for the full state pension but after reading the new TCA rules (if they are implemented) I am starting to doubt this. Lets assume that from 60-66 we still pay PRSI contributions by drawing from an ARF and we have about 27 years of PRSI contribitions does that mean we are entitled to 27/40ths of the full state pension? Also, my wife worked part-time for many years, does this reduce PRSI contributions?

 

[Early Riser]

I assumed that since the state pension is an integral part of our public sector pension that we would both be eligible for the full state pension

The Public Service pension is coordinated with the State Pension (rather than "an integral part"). That will not change with an exclusive TCA approach (whenever that may occur). The level of State Pension you will receive will depend on your PRSI record at State Pension age and the eligibility criteria at the time (whether TCA, Averaging, or a combination). However, you should always get at least the equivalent of what a PS on an uncoordinated PS scheme would have received, eg, for 27 years service it would be 27/80 of pensionable emoluments, or 20/80 for 20 years service, etc. It is possible you will get more than this if your total PRSI record qualifies you for more.

Also, my wife worked part-time for many years, does this reduce PRSI contributions?

Possibly yes and possibly no - her work pattern is relevant. Her best bet is to request a copy of her contribution record, either by writing to DSP in Buncrana or applying online (https://services.mywelfare.ie/en/topics/statements-refunds-and-calculators/contribution-statement/)

If you meet the criteria you can apply for a Supplementary Pension between "normal retirement age" (60 for you?) and State Pension Age. (In some cases a partial Supplemenary may be payable after State Pension Age - in the unusual event that the combined State Pension and coordinated PS pension comes in lower than an equivalent uncoordinated pension entitlement).

 

[poorrelative]

The Public Service pension is coordinated with the State Pension (rather than "an integral part"). That will not change with an exclusive TCA approach (whenever that may occur). The level of State Pension you will receive will depend on your PRSI record at State Pension age and the eligibility criteria at the time (whether TCA, Averaging, or a combination). However, you should always get at least the equivalent of what a PS on an uncoordinated PS scheme would have received, eg, for 27 years service it would be 27/80 of pensionable emoluments, or 20/80 for 20 years service, etc. It is possible you will get more than this if your total PRSI record qualifies you for more.


Possibly yes and possibly no - her work pattern is relevant. Her best bet is to request a copy of her contribution record, either by writing to DSP in Buncrana or applying online (https://services.mywelfare.ie/en/topics/statements-refunds-and-calculators/contribution-statement/)

If you meet the criteria you can apply for a Supplementary Pension between "normal retirement age" (60 for you?) and State Pension Age. (In some cases a partial Supplemenary may be payable after State Pension Age - in the unusual event that the combined State Pension and coordinated PS pension comes in lower than an equivalent uncoordinated pension entitlement).

Thanks a million ER, I have just requested our contribution records.

 

[poorrelative]

The Public Service pension is coordinated with the State Pension (rather than "an integral part"). That will not change with an exclusive TCA approach (whenever that may occur). The level of State Pension you will receive will depend on your PRSI record at State Pension age and the eligibility criteria at the time (whether TCA, Averaging, or a combination). However, you should always get at least the equivalent of what a PS on an uncoordinated PS scheme would have received, eg, for 27 years service it would be 27/80 of pensionable emoluments, or 20/80 for 20 years service, etc. It is possible you will get more than this if your total PRSI record qualifies you for more.


Possibly yes and possibly no - her work pattern is relevant. Her best bet is to request a copy of her contribution record, either by writing to DSP in Buncrana or applying online (https://services.mywelfare.ie/en/topics/statements-refunds-and-calculators/contribution-statement/)

If you meet the criteria you can apply for a Supplementary Pension between "normal retirement age" (60 for you?) and State Pension Age. (In some cases a partial Supplemenary may be payable after State Pension Age - in the unusual event that the combined State Pension and coordinated PS pension comes in lower than an equivalent uncoordinated pension entitlement).

Just re-reading this after trying to work out how this coordinated scheme works - in particular your statement that 'It is possible you will get more than this if your total PRSI record qualifies you for more'. At first glance this seems unfair since someone with 40 years can never have more than 40/80th final salary whereas someone on 30 years could be entitled to more than 30/80ths? I assume that someone who has worked for 30 years in the public sector and has only paid 30 years of PRSI (because no previous employment in the state) will receive 30/80 of final salary? However, if the same person had worked for 10 years prior to joining PS and therefore has 40 years of PRSI then their final pension will be more than 30/80 final PS salary?

 

[poorrelative]

This just arrived...I assume there are no added advantages for those years in which more than 52 were paid (2020, 2021) since they aren't reckonable?

 

[Early Riser]

Public Servants who pay Class A PRSI will be eligible to receive two pensions - a PS Occupational Pension and a State Pension. They are separate. For PS servants they are "coordinated" - one effect being that if you work for 30 years (say) then between the two pensions you will get 30/80 of pensionable salary. But they are separate. The State Pension is paid by the Dept of Social Welfare who also set the eligibility criteria. If someone fulfils the criteria for a full pension based on their total PRSI record then they will, of course, get a full State Pension. So someone who works for 30 years in the PS and 10 years in the private sector should qualify for a full State Pension. It is not unusual for people to have worked in both the public and private sectors.
Credited contributions can also count - provided they are in the correct PRSI class. Someone who works 30 years in the PS may also have some credited contributions - and so would qualify for more than the 3/4 State Pension under the TCA.

 

[Early Riser]

This just arrived...I assume there are no added advantages for those years in which more than 52 were paid (2020, 2021) since they aren't reckonable?

It looks like you (or Mrs PR) has 23 +17/52 years contributions up until the end of 2021 (only 52 reckonable pa) . If you have another 5 years until retirement you should have close to 30 years worth of PRSI (including 2022). You may be able to acquire more contributions after 60 - paid or credited. Those would also be included in your State Pension calculation. For example, before being eligible for the Supplementary you would be required to sign for Jobseekers Benefit. People on JB get PRSI credits. You might be eligible to continue to sign for credits after your JB ends also. Voluntary PRSI contributions are possible. PRSI contributions from part-time work would also count but you can't do this and also claim the Supplementary.

Just so you are prepared - the Supplementary is calculated as the difference between the Occupational Pension you are actually awarded, and what you would have received with an uncorrdinated pension (30/80 of pensionable salary, if you have 30 years service).

 

[poorrelative]

Thanks ER for taking the time to provide a detailed response. This PRSI statement is for me, still waiting on Mrs PR's. My normal retirement benefit at age 65 (31 years in PS) is currently calculated as 20k pa plus whatever state pension and 13k pa if I retire at 60 with 26 years in PS. If I retire at 60 I should have close to 30 PRSI years as you suggested and then hopefully another 6 years from 60-66 by making either voluntary or ARF or JB PRSI contributions. Whether I retire at 60 or 65 I should hopefully have enough PRSI for 35/40ths of the state pension when I am 66 approx 12k.