Unfair Application of Pension Related Deduction?
- Thread starter Rocksteady
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Steven Barrett
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Your problem Rocksteady is that you are viewing it as a pension contribution. In reality, it is a pay cut, dressed up as pension contribution. They would have been better off paying you the % less and not rubbing this in your face every month.
No he is not. The Pensions Deduction has nothing to do with accrual of pension benefits. Its a cosy deduction cooked up by Brian Lenihan and his minions as a way to get public servants to contribute to filling the black hole that was Anglo
Yes that we can agree on.
What I don't really understand is that getting people to make their own provisions for retirement actually helps the government however they continue to undermine this by constantly moving the goalposts with pensions and the latest 'levy' is probably the final straw for a lot of people in either starting or continuing their own pension.
november16
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Pension levy - no pension
Hello Rocksteady did you get any resolution to the pension levy - no pension problem?
Hello Rocksteady did you get any resolution to the pension levy - no pension problem?
Rocksteady: point 17 of the DoFinance FAQ is relevant here: http://www.finance.gov.ie/documents/publications/other/2009/faqpensiondedmay09.pdf
It is quite clear that you are liable for the deduction. Your chances of amending the legislation are, in my view, nil.
However, the crux of your issue is that you are paying for something for which you believe you are receiving no benefit. Perhaps you could consider a different tack? I wonder why your current employment has no pension arrangements? Perhaps your contract terms include some attractive terms to offset this.
My view is that losing 5 years of service at this point, whether it be for a defined benefit PS or defined contribution personal pension is a significant loss. While an employer does not have to make a pension scheme available to you (set up or contribute to), they must provide you with access to at least one standard PRSA. I would pursue this avenue. This is particularly the case because after five years in this new organisation you will no longer be the same person you were when you left your parent organisation. You will have had new skills and experiences. It may be the case that after 5 years away going back in time to your old environment will not be attractive to you. Therefore, you may wish to pursue a career outside the public service. Having a pension arrangement in place that has some portability makes good sense. In addition, there is the potential to benefit from tax advantages. So, overall, I would be inclined to consider whether you will gain more by trying to change the legislation, which is treating you unfairly, or by trying to instigate a pension arrangement which will provide you with money when you are older. While I believe in campaigning against unfairness, I also believe that some tasks take more resources than are at our disposal at any one time. Good luck in your ventures!
It is quite clear that you are liable for the deduction. Your chances of amending the legislation are, in my view, nil.
However, the crux of your issue is that you are paying for something for which you believe you are receiving no benefit. Perhaps you could consider a different tack? I wonder why your current employment has no pension arrangements? Perhaps your contract terms include some attractive terms to offset this.
My view is that losing 5 years of service at this point, whether it be for a defined benefit PS or defined contribution personal pension is a significant loss. While an employer does not have to make a pension scheme available to you (set up or contribute to), they must provide you with access to at least one standard PRSA. I would pursue this avenue. This is particularly the case because after five years in this new organisation you will no longer be the same person you were when you left your parent organisation. You will have had new skills and experiences. It may be the case that after 5 years away going back in time to your old environment will not be attractive to you. Therefore, you may wish to pursue a career outside the public service. Having a pension arrangement in place that has some portability makes good sense. In addition, there is the potential to benefit from tax advantages. So, overall, I would be inclined to consider whether you will gain more by trying to change the legislation, which is treating you unfairly, or by trying to instigate a pension arrangement which will provide you with money when you are older. While I believe in campaigning against unfairness, I also believe that some tasks take more resources than are at our disposal at any one time. Good luck in your ventures!
Rocksteady
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Thanks for all the replies.
I wrote a further letter to the Dept of Public Expenditure and Reform (what a ridiculous name btw), outlining in quite some detail how I stand to lose quite a bit of money by being tied to this scheme. I even demonstrated that the value of my pension levy payments will surpass the value of the pension being held for me within my five-year contract. I had excel sheets and everything. I asked them what would happen if I get another five year contract or if I stay here for the rest of my career. The response this time was very short and amounted to very little more than 'PFO'.
Orga - thanks for the advice, I may do that. It's just that it's the money I'm paying on pension levy that i'd like to put into a private pension.
The attractive terms of my current employment over the previous pensionable one is the higher salary. But taking a hit of 260 euro a month eats into that.
I've been letter-writing for two years now. Might have to concede defeat on this one.
I wrote a further letter to the Dept of Public Expenditure and Reform (what a ridiculous name btw), outlining in quite some detail how I stand to lose quite a bit of money by being tied to this scheme. I even demonstrated that the value of my pension levy payments will surpass the value of the pension being held for me within my five-year contract. I had excel sheets and everything. I asked them what would happen if I get another five year contract or if I stay here for the rest of my career. The response this time was very short and amounted to very little more than 'PFO'.
Orga - thanks for the advice, I may do that. It's just that it's the money I'm paying on pension levy that i'd like to put into a private pension.
The attractive terms of my current employment over the previous pensionable one is the higher salary. But taking a hit of 260 euro a month eats into that.
I've been letter-writing for two years now. Might have to concede defeat on this one.
november16
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I can identify somewhat with your situation. To add insult to Injury. I am on an acting allowance for 18 years and pay "pension related deduction" on this now significant part of my salary. This will eventually form half of my salary and will continue until I retire. This Pension Related Deduction is a pay cut and is not pension related in any way. The unions wont go near this for some reason even though they know it is grossly unfair. The Pensions ombudsman would that be a route to go. If a group of people who are losing out because of this sent in P.Q's maybe more effective?