What happens if a civil servant who could retire at age 60 on full pension decides to defer his pension?

My understanding is that once you hit the 40 year mark, there is no increase in pension entitlements. You get 50% of your finishing salary as pension and 150% as a tax free lump sum. Of course, you could keep working, get promoted and increase your finishing salary. I think that applies to pre 2004 pension scheme.
 
You would still have to continue contributing though if you are in one of the schemes where you contribute a % (e.g. post-2005), even with 40 years service as far as I know
 
Yes, gravitygirl is correct. You are effectively working for half pay, minus all pension contributions, all taxed at your highest marginal rate.

It is a good argument for retirement if you have the 40 years.
 
It may be a small consolation, but, as far as I know, Revenue will allow a person in this position to take an additional 3/80 tax free per year of service in the lump sum - for up to 5 years (15/80). This would have to be funded by the person through an AVC - there is no additional main scheme pension. It has to be service after normal retirement age for the scheme, and service beyond 40 years. Again, AFAIK.
 
Thanks everyone,

Regarding Early Riser's point (note who's the early riser today?!), what is the normal retirement age for a civil servant who has now clocked up the 40 years? I know that he can retire on full pension at age 60 but is that considered "normal retirement age" in this regard?
 
elacsaplau said:
Thanks everyone,

Regarding Early Riser's point (note who's the early riser today?!), what is the normal retirement age for a civil servant who has now clocked up the 40 years? I know that he can retire on full pension at age 60 but is that considered "normal retirement age" in this regard?
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Todate the vast majority of civil/public servants retire is at 65 years of age. However, in some cases this has been 66. But, for anybody who entered the service after mid 2002 (I can't remember the exact date) the retirement date can be any age depending on health and ability to perform all relevant duties.

In some instances (depending on the policy of whatever Department) some people who were due to retire at age 65 can apply for an extension of 1 year and further on a yearly basis.
 
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It's a rare enough case any more. Since the 1990s most public service entrants have been graduates and join earliest in early 20s.

My grandfather became a permanent civil servant at the age of 17 and 4 months. Imagine that today!
 
elacsaplau said:
Regarding Early Riser's point (note who's the early riser today?!), what is the normal retirement age for a civil servant who has now clocked up the 40 years? I know that he can retire on full pension at age 60 but is that considered "normal retirement age" in this regard?
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You can take "normal retirement" once you have reached minimal retirement age for your normal pension benefits. So for pre-2004 entrants "normal retirement age" is 60. However, the ClassD/B PRSI people (most of those who joined before April 1995) can retire normally at 60 and get their full pension directly (eg, if pensionable salary is €80K and they have 40 years service the pension is €40K). They could take up other employment if they wished.

Class A retirees get a coordinated pension (retiring at 60 on €80K with 40 years he/she would get a pension of €27K and would have to apply for Supplementary to to top up the other €13K - and satisfy the Social Welfare and no-work conditions to get this).

"Normal retirement age" doesn't mean you have to retire - or that people normally retire at that age. It is just that they can take their accumulated pension benefits normally. So your "normal retirement age" is 60. (You must be a pre-2004 entrant, or else a "uniformed" member).

For "new entrants" after April 2004 "normal retirement" age is 65 (They can apply to stay beyond this). For Single Scheme people it is 67/68, depending on DOB.
 
Thanks Early Riser,

Can you validate my understanding - per example below - please?

If someone like Coyote's grandad joined, say, on his 18th birthday and retired on his 61st birthday - he'd have 43 years on the clock.

His pension would be capped at 40 years and his Rev Max Lump Sum would be based on 41 (and not 43 years) service. Is that correct?
 
elacsaplau said:
Thanks Early Riser,

Can you validate my understanding - per example below - please?

If someone like Coyote's grandad joined, say, on his 18th birthday and retired on his 61st birthday - he'd have 43 years on the clock.

His pension would be capped at 40 years and his Rev Max Lump Sum would be based on 41 (and not 43 years) service. Is that correct?
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That is my understanding of it. But have a read here and see what you think: https://www.revenue.ie/en/tax-professionals/tdm/pensions/chapter-08.pdf

The two-thirds limit is adjusted to 50% in the public sector to take account of the Survivor Benefits.
 
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