Working in PS after retirement.

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DingDing

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I am retiring in October (3 Months notice) and I was approached to see if I would be interested in working one day a week in retirement. I am in IT and would have implemented a lot of the systems over the years from business processes. I would be agreeable to at least consider this as it keeps a connection with the job, should give me a lot of flexibility. I am however post 95 and I will have to sign for JB for the first 9 months. I also got a promotion in 2017 which means under the abatement of pension rules, I would be entitled to having the pension abated for this work.

When I look at this there are a lot of deductions as a PS retiree which mean that there will only be limited financial benefit in doing this. Personally it would give me a period of adjustment to retirement, and if I do it it wont really be for the money.

The following is my thinking.

Jobseekers benefit.
I would lose 20% of the payment as I would be working one day per week, This would also extend the 9 months by potentially another couple of months.
As I am doing some work, I could probably get the payment paid in to my bank account, particularly if I set my working day as a Friday. This would give me more flexibility in my retirement. So some advantages there.

Abatement.

I would lose 20% of my gross pension, as one day a week I would be on my full former salary.
On the payment of one day a week, I would be paying pension contributions, adding 20% of a year for every year I would work under this system.

So at 65 I would be able to have a slight increase in pension, 20% of a year for every year I work.

To put some very broad figures on it.

Say JB is 250 per week, this would be reduced by 50 euro to 200.

Say final salary is 80K

Say with service my pension is 35K less JB = 22K 22K + 13K = 35K

So without working I would get a total gross pension and JB of 35K

With reduced JB and abatement this woudl reduce by 20% JB goes from 13K 10.4K a drop of 2.6K per year.
The pension reduced by 20% would go from 22K to 17.6K

Total pension and JB now 28K down 7K.


With a final salary of 80K, one days pay would be 16K. This 16K would also have PS pension charges on it.

So Pension and JB without working = 35K

80% Pension and JB + pay = 44K of which I would pay additional pension charges on 16K.

So I would make 9K gross, or 173 per day.

Looking the abatement document. The other option is a contract for service.

Over 3 years this would have a value of 48K which is approaching tender thresholds in my body. This would be more difficult to implement.


By comparison, if I was to work in the Private Sector one day per week for the same money.


Pension 22K, JB 10.5K and 16K = 48.5K vs 44K in the public sector.

The really disincentivise staff working on.

I would be interested to hear from anyone who has continued working in a reduced capacity post retirement.
 
DingDing said:
Jobseekers benefit.
I would lose 20% of the payment as I would be working one day per week, This would also extend the 9 months by potentially another couple of months.
As I am doing some work, I could probably get the payment paid in to my bank account, particularly if I set my working day as a Friday. This would give me more flexibility in my retirement. So some advantages there.
Click to expand...
Jobseekers benefit is paid on Wednesdays
 
Where did you get the 20% figure for abatement? Would need to get this confirmed as it could be more or less.
 
It was based on the work pattern. I took it that 1 day a week was 20% for the weeks I worked.
 
Thanks @partnership https://www.gov.ie/en/circular/98b5...ment-of-public-service-occupational-pensions/

My calculations follow the pro rata calculation on page 16.

So I will have my pension reduced by 20% for one day a week and I will get paid 20% of the salary for the job. That 20% will include pension levys etc... I will also not get the JS benefit for the day I am working either.

As I got a promotion in 2017 and it was to a PWT position my pension will be abated.

There is the option to work as a contractor, with a contract for service.
 
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DingDing said:
So I will have my pension reduced by 20% for one day a week and I will get paid 20% of the salary for the job. That 20% will include pension levys etc... I will also not get the JS benefit for the day I am working either.
Click to expand...

That seems pretty fair. You mentioned in an earlier post that your pension will increase in line with your extra service so I don't see why there should be an issue with pension deductions.
 
DingDing said:
Thanks @partnership https://www.gov.ie/en/circular/98b5...ment-of-public-service-occupational-pensions/

My calculations follow the pro rata calculation on page 16.
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I’m not sure that’s the relevant comparator.

As far as I can remember, the rule of thumb to avoid any abatement of salary is that your pension plus any post-retirement public sector salary should not exceed the pre-retirement salary on which your pension is based.

I’ve highlighted salary because as others have suggested, providing services on a company/sole trader basis removes any consideration of abatement. You are simply a paid contractor with responsibility for your own tax affairs on any additional income you receive.

As someone who’s worked in the system, I would suggest this is the better way to go. I know of one person in particular who came back one day a week and whose pension and tax affairs are now in a heap.
 
@Salvadore The issue is I paid for a pension and purchased additional service over the years and my pension is reduced because I am working. The point is that on an anual basis I would be OK but the circular looks like it pro-ratas down to a weekly unit. But when you read the text this is not fully clear either.

I have no issue with the rate of pay for the days work. The issue is that as you mentioned, it has the potential to very quickly become a mess. If the pension isn't abated at the time, as it is a manual process ny pensions who would inform payroll of the adjustment, I could very quickly owe back a lot of pension. Providing services as a sole trader is probably the way to go as it separates the pension from the future work.

It is an administrative nightmare. If I attend an interview panel and get an honorarium then my jobseekers has to be adjusted for that day (fair enough) and the PS pension has to be abated for that day as the honorarium with pension will likely bring me over my previous pay for the day.

The PS body who I am doing the interview for also have to send forms to my pensions section for the pension adjustment and of course the supplementary pension adjustment when the time comes.

If I do any bit of work at all, there will need to be a team in payroll and HR tracking me and making all the adjustments.

I pity our pensions administrator.

Perhaps there is a mechanism where honorariums for interviews could be sent to a charity or something so someone will get a benefit from it, as to claim for it and process it through the system is an administrative nightmare.

Ironically I might be tasked with advising on the IT system to sort all this out :) :)
 
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DingDing said:
@Salvadore The issue is I paid for a pension and purchased additional service over the years and my pension is reduced because I am working.

I have no issue with the rate of pay for the days work. The issue is that as you mentioned, it has the potential to very quickly become a mess. If the pension isn't abated at the time, as it is a manual process ny pensions who would inform payroll of the adjustment, I could very quickly owe back a lot of pension. Providing services as a sole trader is probably the way to go as it seperates the pension from the future work.

It is an administrative nightmare. If I attend an interview panel and get an honorarium then my jobsseekers has to be adjusted for that day (fair enough) and the PS pension has to be abated for that day as the honorarium with pension will likely bring me over my previous pay for the day.

The PS body who I am doing the interview for also have to send forms to my pensions section for the pension adjustment and of course the suplementary pension adjustment when the time comes.

If I do any bit of work at all, there will need to be a team in payroll and HR tracking me and making all the adjustments.

I pity our pensions administrator.

Perhaps there is a mechanism where honorariums for interviews could be sent to a charity or something so someone will get a benefit from it, as to claim for it and process it through the system is an administrative nightmare
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I think you’re worrying unnecessarily a bit.

The examples you point to on the circular refer to a person who was on a four day week before they retired. The pension they subsequently received, added to the salary they received on return, brought it to an amount that required abatement. The point of this example was to clarify that it was the 4-day equivalent salary that counted for possible abatement- not the full time equivalent salary.

I really don’t see how someone coming back one day a week would put themselves in a position where abatement would be a consideration. (You would of course lose a day’s JB alright)

However I still think the self employment option is preferable on several levels.
 
I have looked at this as I could be in this situation next year. I thought that as long as my pension and earnings were not more than my old salary I would not be subject to abatement. So I thought I would work 0.5 wte, my pension is only 26 years as well so that would leave me under the full-time salary. However when I did the calculations as per the circular my pension would still be abated. Hr and superannuation cannot answer questions and it is very unclear. I would advise doing contract services if possible.
 
@partnership, I felt the same till I looked at the circular, on an annual basis I would be fine, but when you look at it as a % of a week I wouldn't. As @Salvadore mentioned, the possibility for pensions / payroll to mess it up, purely because of the delays and all the steps involved, for example, I would be paid the pension and it would have to be retrospectively abated.

The contract for service is the way to go and sort out the tax etc... separately, I could probably of set some costs against the income, such as laptops, printers, a portion of broadband costs etc.... as part of running the business.

The other way through the payroll is a bit of a nightmare for all involved. Pensions, Payroll and Supplementary Pensions etc....

The contract for service would need a bit of admin, but not too bad.

At least when the follow up discussions take place, I understand my preferred options, and can explain to my manager, the benefits for both sides in doing it this way. From their point of view, it is simpler, they just raise a P.O. for any day(s) they want me and I invoice them for that. I might need some public liability insurance and I would be happy to put this in place.
 

Circular 12/2024 Arrangements for Occupational Supplementary Pensions (OSP)

www.gov.ie www.gov.ie

This new circular recently released, states that you lose the entitlement to the supplementary pension if you are 1) Self Employed or 2) Working Full Time. It allows part time work as before with non-payment of the supplemetaty pension for the pro rata periods worked and the abatement of your pension for the days worked.

I would expect that if you were working on a contract for service, you would be deemed self employed and there would be no entitlement to supplementary pension.

In other respects, it covers a lot of the issues with the previous scheme, you do not have to apply for Unemployment Benefit, and also the Supplementary Pension increases with rises in the pension.
 
The solution is probably to work part time for a company that provides services to my organisation. This would mean that I would not be full time, and I would not be self employed, and as it was not an employment, it would not be abated.
 
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