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Purchase of Notional Service

  • 05-05-2010 9:51pm
    #1
    Yorky
    Registered Users, Registered Users 2 Posts: 1,485 ✭✭✭


    Can anyone comment on whether it is advisable to Purchase Notional Service (PNS) in a particular case?

    Having calculated the cost of PNS by periodic contribution over the 19 years left to retirement and then subtracted the increased lump-sum benefit it would provide, the pension recipient would need to claim the pension (survive) for 18 years to break even.

    This figure does not allow for tax / PRSI relief at 48% but even when it is allowed for the recipient would still need to claim for about 9.5 years. This does not allow for income tax payable on the pension so it would actually take longer to really benefit from the scheme, not to mention the loss of potential return from investing the money elsewhere.

    I know there are additional benefits for spouses and children but considering the duration before breaking even, does this represent good value? The person will not be seeking promotion and will most likely remain at the same salary point scale.

    There is also a family history of relative longevity.


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