What is the difference between coordinated and non coordinated pensions?

[Coordinated]

Please explain the difference between coordinated and non coordinated pensions.

Is there a way my pension can be uncoordinated? I am concerned that since I'm not on a very high salary and will only have 15 years service when I retire that my contibutions may not result in any appreciable benefits.

Thanks,
Coordinated

 

[CCOVICH]

From this FAQ:

My Defined Benefit pension scheme is Integrated (or Coordinated) what does this mean?
This means the pension you receive from the company is reduced by the amount of the Old Age Pension. Typically, in a contributory scheme, your contribution is also reduced by factor related to the current OAP.

 

[ajapale]

From Oasis:

Occupational pensions and social welfare pensions

Occupational and personal pensions operate independently of the social welfare pension system (Social welfare pensions include and pensions) and there is no statutory link between the two.
However, it is common for occupational pensions to take into account the level of social welfare pension received in calculating the level of benefit.
For example, some schemes provide for a benefit, which, together with the social welfare pension, will give you a half or two-thirds of your final salary. This may be done when you start to receive your pension but your occupational pension may not be subsequently reduced because your social welfare pension is increased.
Such schemes are sometimes called integrated or co-ordinated schemes.

And from the Irish Pensions Board Occupational Pension Schemes FAQ's.

My pension scheme is integrated with the Social Welfare pension. What does that mean?

An integrated scheme is one where the pension payable, or the design of the benefit promise made, takes into account the Old Age Contributory Pension (or other similar contributory benefits) payable by the State.

In the Public sector, these schemes are usually referred to as “co-ordinated” schemes. The terms “integration” (which will be used throughout this booklet) and “co-ordination” mean basically the same thing.

An integrated scheme looks at the Old Age Contributory Pension as part of the total pension package promised to employees on retirement. One reason for this is that both employers and employees make substantial social insurance (PRSI) contributions and these, in turn, entitle scheme members to substantial Social Welfare benefits and this normally forms part of an employee’s pension.

Integration is used as a means of taking into account the benefits payable under the Social Welfare system to calculate:

• The amount of pension payable from an occupational (company) scheme, so that the combined pension from both sources (Social Welfare and occupational scheme) is at the level being aimed for in the scheme’s design;
• The level of contributions payable by the employee towards the cost of their occupational (company) pension.

The actual methods of integration used to achieve these aims can vary from scheme to scheme.

Occupational (company) pension schemes can be either defined benefit (DB)schemes or defined contribution (DC) schemes. Integration is at its most obvious when applied to defined benefit schemes, but in fact can apply to either type of scheme.

and from Comhairle [broken link removed]

Occupational pensions and social welfare pensions

Occupational and personal pensions operate independently of the social welfare pension system and there is no statutory link between the two.


Many occupational pensions take into account the level of social welfare pension received in calculating the level of benefit. This may be done when you start to receive your pension but since 1999 your occupational pension may not be subsequently reduced because your social welfare pension is increased.


If you take early retirement, your occupational pension may not be reduced until you start receiving your social welfare pension.


Such schemes are sometimes called integrated or co-ordinated or abated schemes.

 

[Summer]

"If you take early retirement, your occupational pension may not be reduced until you start receiving your social welfare pension."

What does this mean please? Does it mean you have to receive an amount inclusive of the social welfare pension until you reach age 65?

Thank you
Summer

 

[Guest126]

It does not mean much summer - other than what it says.

Whether or not you would receive extra pension until the date you receive state pension (in an integrated scheme) in the event of early retirement would depend on the Trust Deed and Rules of the occupational scheme concerned, there is no other place to look for a rule in relation to this.

 

[ajapale]

Hi Summer,

The rules of the scheme regarding Early Retirement (and also Retirement through Ill health) vary from scheme to scheme.

In the case of Early Retirement some schemes will not deduct the COAP until you reach 65. While others will deduct the COAP as of the date of your early retirement.

aj