Explaining my payslip

fade out

Just looking to clarify some deductions I see every week on my payslip. Paye,prsi and USC is fine.

Can some explain what is the pension levy and what rates it operates at? Similarly for superannuation 1 and 5 as well as the widows and orphans thing.

Also how does the public service pension actually work? I am a NQT. How many years service do I have to give? Is one of the above deductions paying into that pension? Can I start a private one or is the much point?

Thanks in advance.

rainbowtrout

Superannuation 1 and 5 is your pension payment. It's compulsory and if you are an NQT you have to give 40 years service and you get a fraction of that as your final pension. 1/80 of your average career earnings for each year worked for a maximum of 40 years, i.e. you can work beyond 40 years but won't get anything extra in the pension at the end of it. so 40 years = 40/80 = 1/2 your career average wage on retirement.

You also get a lump sum at retirement on the same basis but it's paid at 3/80s of wage for every year worked. Essentially it works out as a lump sum 1.5 times your annual pension.

Widows and orphans: you pay into this (compulsory) that in the event if you die in service your widow/orphans get a payout on your pension.

Off the top of my head I can't remember the pension levy deductions:


Taken from: http://www.finance.gov.ie/documents/guidelines/faqprdjul09.pdf

First €15,000 of earnings exempt
Between €15,000 and €20,000 5%
Between €20,000 and €60,000 10%
Above €60,000 10.5%

This is done on a pro-rata basis as you are probably paid fortnightly.



As for setting up a private pension: well there are pros and cons to it. A lot will depend on your age, likelihood of staying in teaching (being able to stay in teaching if you secure a job), if you've been paying into a pension previously etc.


Very simplified pension calculations:

If you worked the first 20 years of your career earning 40K per year, and the second 20 earning 60K per year, then your average earnings for the 40 years would be 50k per year.

If you work the full 40 years, getting 1/80 of career average as pension then you would get : 40 years * 1/80 * 50K = 25000 pension per year on retirement. This includes the standard contributory pension of approx 12k per year and is not extra on top of it.

Aslo the once off lump sum would be 40 years * 3/80 * 50K = 75K.


The problem for NQTs is holding down a stable job and getting full hours in the early part of their career. That, I would imagine will bring down the career average considerably for new teachers way down the line. Obviously if you work less than 40 years, you would substitute that number into the equation and the pension will reduce accordingly.

chippers

rainbowtrout wrote: »

Superannuation 1 and 5 is your pension payment. It's compulsory and if you are an NQT you have to give 40 years service and you get a fraction of that as your final pension. 1/80 of your average career earnings for each year worked for a maximum of 40 years, i.e. you can work beyond 40 years but won't get anything extra in the pension at the end of it. so 40 years = 40/80 = 1/2 your career average wage on retirement.

I came into teaching late so i won't be able to make up the fourty years. Do you know what impact this has?

rainbowtrout

chippers wrote: »

I came into teaching late so i won't be able to make up the fourty years. Do you know what impact this has?

You work as many years as you can and get a pension on a pro-rata basis. You have the option of buying back years through the VEC/Dept to add onto your pension which can work out expensive or you can start an AVC which is essentially a private pension which serves as a top up if you won't have the full years done on retirement.

It also depends on when you started teaching as much as how many years you have done.

A person starting prior to 2004 can retire before 65 and get their pension (whether they have full years done or a fraction of it) a person post 2004 cannot.

Disclaimer: I am not a pension expert, just another regular teacher.

derb12

chippers wrote: »

I came into teaching late so i won't be able to make up the fourty years. Do you know what impact this has?

Write to your the pensions section in the dept of ed and ask for a quote for purchase of notional service. They do not acknowledge letters (at least they didn't acknowledge mine) but will reply with a quote about 6 weeks before your next birthday. Then they make deductions from your fortnightly salary to bring you to the equivalent of 40 years on retirement.

solerina

rainbowtrout wrote: »

.

Widows and orphans: you pay into this (compulsory) that in the event if you die in service your widow/orphans get a payout on your pension.
QUOTE]

Sorry to take this off the point but is there any way we can investigate this ? Its going to work out as a serious amount of money over a teaching career....and its basically an insurance policy we have no choice over ??? It makes my blood boil when ever I think of it
Its a bit like the ppi situation in my opinion

fade out

rainbowtrout wrote: »

Superannuation 1 and 5 is your pension payment. It's compulsory and if you are an NQT you have to give 40 years service and you get a fraction of that as your final pension. 1/80 of your average career earnings for each year worked for a maximum of 40 years, i.e. you can work beyond 40 years but won't get anything extra in the pension at the end of it. so 40 years = 40/80 = 1/2 your career average wage on retirement.

You also get a lump sum at retirement on the same basis but it's paid at 3/80s of wage for every year worked. Essentially it works out as a lump sum 1.5 times your annual pension.

Widows and orphans: you pay into this (compulsory) that in the event if you die in service your widow/orphans get a payout on your pension.

Off the top of my head I can't remember the pension levy deductions:


Taken from: http://www.finance.gov.ie/documents/guidelines/faqprdjul09.pdf

First €15,000 of earnings exempt
Between €15,000 and €20,000 5%
Between €20,000 and €60,000 10%
Above €60,000 10.5%

This is done on a pro-rata basis as you are probably paid fortnightly.



As for setting up a private pension: well there are pros and cons to it. A lot will depend on your age, likelihood of staying in teaching (being able to stay in teaching if you secure a job), if you've been paying into a pension previously etc.


Very simplified pension calculations:

If you worked the first 20 years of your career earning 40K per year, and the second 20 earning 60K per year, then your average earnings for the 40 years would be 50k per year.

If you work the full 40 years, getting 1/80 of career average as pension then you would get : 40 years * 1/80 * 50K = 25000 pension per year on retirement. This includes the standard contributory pension of approx 12k per year and is not extra on top of it.

Aslo the once off lump sum would be 40 years * 3/80 * 50K = 75K.


The problem for NQTs is holding down a stable job and getting full hours in the early part of their career. That, I would imagine will bring down the career average considerably for new teachers way down the line. Obviously if you work less than 40 years, you would substitute that number into the equation and the pension will reduce accordingly.

Thanks for that rainbowtrout. So superannuation is my pension payment and the pension levy is just another form of tax then? Also was there a cut off for getting career average pension instead pension based on your retiring salary? I am NQT this year but working paying in school since 2010.

rainbowtrout

fade out wrote: »

Thanks for that rainbowtrout. So superannuation is my pension payment and the pension levy is just another form of tax then? Also was there a cut off for getting career average pension instead pension based on your retiring salary? I am NQT this year but working paying in school since 2010.

In a nutshell yes. Pension levy means extra being paid in, but pension on retirement remains the same, so yes a tax.

To be honest I don't know which budget the career average was brought in on. I'm pre 2004 so it doesn't affect me, it's 2009,2010 or 2011.

EDIT: just found it, it was signed into law in July 2012 and took effect for anyone joining PS/CS from Jan 1, 2013.

http://www.merrionstreet.ie/index.php/2013/01/public-service-pensions-single-scheme-commencement-order/

thefasteriwalk

rainbowtrout wrote: »

In a nutshell yes. Pension levy means extra being paid in, but pension on retirement remains the same, so yes a tax.

To be honest I don't know which budget the career average was brought in on. I'm pre 2004 so it doesn't affect me, it's 2009,2010 or 2011.

EDIT: just found it, it was signed into law in July 2012 and took effect for anyone joining PS/CS from Jan 1, 2013.

http://www.merrionstreet.ie/index.php/2013/01/public-service-pensions-single-scheme-commencement-order/

Rainbowtrout, does this mean if I started teaching in 2011 that my pension will not be based on a career average? Sorry - I'm equally clueless when it comes to such things.

rainbowtrout

thefasteriwalk wrote: »

Rainbowtrout, does this mean if I started teaching in 2011 that my pension will not be based on a career average? Sorry - I'm equally clueless when it comes to such things.

Yes I would assume so if it only took effect in January. It would mean you will get your pension based on your final wage when you retire.... in 2051 :eek:

thefasteriwalk

rainbowtrout wrote: »

Yes I would assume so if it only took effect in January. It would mean you will get your pension based on your final wage when you retire.... in 2051 :eek:

ahaha. With the way things are going, I'll be lucky if I have a CID by 2051!

fade out

rainbowtrout wrote: »

In a nutshell yes. Pension levy means extra being paid in, but pension on retirement remains the same, so yes a tax.

To be honest I don't know which budget the career average was brought in on. I'm pre 2004 so it doesn't affect me, it's 2009,2010 or 2011.

EDIT: just found it, it was signed into law in July 2012 and took effect for anyone joining PS/CS from Jan 1, 2013.

http://www.merrionstreet.ie/index.php/2013/01/public-service-pensions-single-scheme-commencement-order/

Looks like I got in by the skin of my teeth!

Chris68

Just got to stay in now. I think if you break your service by 6 months they throw you out.

thefasteriwalk

Chris68 wrote: »

Just got to stay in now. I think if you break your service by 6 months they throw you out.

So, if I can't find a teaching position in Ireland for the next academic year, and I'm forced to go to the UK, then I'll lose my place on the pre-2011 pay scale, lose my allowances and have my pension calculated based on a career average?

chippers

thefasteriwalk wrote: »

So, if I can't find a teaching position in Ireland for the next academic year, and I'm forced to go to the UK, then I'll lose my place on the pre-2011 pay scale, lose my allowances and have my pension calculated based on a career average?

Is there not some rule that they recognise contributions made in other EU countries?

Kristopherus

chippers wrote: »

Is there not some rule that they recognise contributions made in other EU countries?

Yes, there is, but that only applies to the State Contributory Pension. The PRSI contributions that you pay if working in another EU country will count towards your State Pension. Another thing to remember is that anyone employed in the Public Service after 1st April 1995 are paying Class A PRSI. The OAP age will be 67 0r 68 by 2028. That will surely have risen to 70 by 2050. The issue then will be that there will be a gap of a couple of years between a person who retires after 40 years and is some way off 70. During those gap years the retiree will only get the Occupational Pension from their Employer. The will not get the State Pension until 70.
Food for thought. And it appears that Unions have'nt really cottoned on to this issue yet.:(

Geuze

This is known about.

Retire at 60, get work pension element, get PRSI pension at 66-67.

Meanwhile, you can get a supp pension from the DES to make up what you are missing.


http://www.pna.ie/index.php?option=com_content&view=article&id=317:supplementary-pension-circular&catid=51:latest-news&Itemid=110

thefasteriwalk

So if I were to go to the UK to teach for year, I would contribute to my pension, but I'd lose my pre-2011 pay scale position and my allowances?

paddy.81

If I did some unqualified subbing at the end of 2003 but got payslips from the department would it put me on pre 2004 pension? Don't have payslips anymore. Way back then I didn't even think about these things!

highly1111

Chris68 wrote: »

Just got to stay in now. I think if you break your service by 6 months they throw you out.

Can someone please clarify this for me? Had been working pretty solidly until august 31st 2012 when a career break wasn't extended but since then I haven't been able to find work with the department - I've done some private teaching at 3rd level. it's now almost a full 6 months later. Does this mean when / if I get a job (or not) that I'm back to a NQT salary?? That's a drop of about €12k. I qualified in 2010. thanks.

highly1111

highly1111 wrote: »

Can someone please clarify this for me? Had been working pretty solidly until august 31st 2012 when a career break wasn't extended but since then I haven't been able to find work with the department - I've done some private teaching at 3rd level. it's now almost a full 6 months later. Does this mean when / if I get a job (or not) that I'm back to a NQT salary?? That's a drop of about €12k. I qualified in 2010. thanks.

I just checked ASTI. Anyone who has been on payroll prior to Jan 2011 for any reason is not classed as a new entrant.

Phew - now I can go to sleep. Was having a mini heart attack there.

Moody_mona

highly1111 wrote: »

I just checked ASTI. Anyone who has been on payroll prior to Jan 2011 for any reason is not classed as a new entrant.

Phew - now I can go to sleep. Was having a mini heart attack there.

It won't affect pay but will affect pension if you have had a six month break.

chippers

highly1111 wrote: »

I just checked ASTI. Anyone who has been on payroll prior to Jan 2011 for any reason is not classed as a new entrant.

Do you mean anyone in a qualified or unqualified (subbing) role? I left Ireland straight away after completing the PGDE course so my pre Jan 2011 work is either unqualified subbing during my placement or working or in a public school in another EU country post qualification.

highly1111

Sorry Chippers - I don't know the answer to this question.

My guess is that you were on payroll so you'd be covered - but I genuinely don't know.

TheDriver

Don't forget 35/55 rule either which can be 33 years service with adjusted pension if sec teacher