Pension Related Deduction

Mousewar

I work in the Public service and since the middle of 2007 contributed to the Pension scheme. Then of course the Pension Related Deduction was introduced when the economy hit the skids. Roughly my pension contribution is about 130 odd euro while the PRD is over 200 each month.

At the end of last year I switched jobs. I have remained within the Public Service but am no longer entitled to contribute to the pension scheme. This was explained to me so I was fine with it.

However, it wasn't explained to me that although I could now keep my pension contribution each month I would still be charged the PRD. This seems ridiculous as I'm not allowed contribute to the scheme but still have to pay a levy on it which is more than the contribution would have been.

I queried it with my employer who informed me that the PRD is a mandatory levy on anyone employed by the Public service who stands to benefit from a Public Service Pension. As there is a Preserved benefit waiting for me for the roughly two years worth of contributions I made in my previous post, they are continuing to levy me.

However, this preserved benefit is tiny, based as it is on only two years worth of contributions. Shoul dI stay in my current position and never contribute to the scheme again it would be dwarfed by the amount i will pay out on PRD over my career. In other words, I would lose money by being involved in the Pension scheme.

I wrote to the central office in Athlone that deals with these matters four times but they won't respond to me. I'm happy to have a job in these difficult times but still, this doesn't seem right. Anyone know more...

cautiouskate

Came across your post while searching to see if anyone else had problems with the PRD. My husband is in receipt of a Public Service Pension having completed his required service and retired at 50. He subsequently became employed as a part-time teacher by the VEC and started paying PRD in September 2009. Because his Public Service Pension was based on 40 years and this is the max which is eligible for a public service pension he is not eligible to receive a further pension from the VEC. However, as a public servant he has been liable for PRD up to time of retirement last December. The VEC have now advised that he is not entitled to refund of PRD even though it would appear he comes within the guidelines for someone who should have been exempt from paying it in the first instance. He is still disputing this at the moment but it might be advisable for you to have your position clarified before you end up paying a large sum to PRD and which you might not be able to recoup even if it turns out you are not eligible for a pension!!

Kristopherus

The PRD has nothing to do with pensions or pension entitlements. It is merely a mechanism thought up by Cowan & his cronies to extract more money from the PS. There are no exemptions and the proceeds are going into the black hole that is Anglo. Now Kenny & his cronies have no notion of giving up the income stream.
On a seperate note was your husband's pension reduced while he was employed by the VEC? If not, it should have benn reduced by the amount of remuneration from the VEC.

cautiouskate

Yes, I am fully aware that the PRD has nothing to do with pension contributions or pension entitlements and is just an extra tax on public servants. However, the Act and the Department of Finance Guidelines which introduced this deduction does state that there are exemptions if a person is not a member of a pension scheme, not entitled to benefit from a pension scheme and not in receipt of a payment in lieu of membership of such a pension scheme. My husband falls into all of these categories and no, his Public Service Pension was not abated or reduced by his remuneration from the VEC as the pensionable job he worked in did not require any such abatement. Also, it is more than 15 years since he was granted his pension and he was working for the VEC on a casual, term-time, contract. I am sure there are a number of part-time teachers in the same position as I note that Clare Daly raised this issue in the Dail with Minister for Education, Rory Quinn.

Mousewar

I got a response saying that I had raised a unique point and they'd look into it. My unique point of course is that being a member of the scheme is going to cost me many times more than I'd receive from it. It's farcical. At least with most people, they can pay the PRD every month knowing they're getting a big pension upon retirement. I'm paying every month and looking forward to getting about a fiver a year from them in pension.

cautiouskate

Have just received a response from VEC which states that if a person IS or WAS or WILL be receiving a public service pension, they are liable for PRD and will not be eligible for a refund of the payments even if they are NOT entitled to a further pension. The only good news is that the VEC have been incorrectly deducting my husband's PRD at the highest rate so at least he will get that amount refunded. So, it looks like anyone who has retired from the public service with any kind of a pension, and who goes back to work in the public service, full or part-time, will be penalised with this extra tax with no benefit to themselves pensionwise. Haven't found where it states this specifically in the Act or the Guidelines yet but you would need to be a legal person to be able to interpret some of it!! Incidentally, Clare Daly, brought up a similar query in relation to part-time teachers in the Dail and Rory Quinn replied that if she was aware of particular circumstances where individuals were not getting refunds, he would address the issue.