Pating more on Pension Related Deduction than on Pension contributions... At a loss??

subscriber

Hello,

I am a public sector employee and have received a letter from the SAP system offices asking me to declare me pension contributions and also, if i am contributing to any other public sector pension from past employment in any other area of the public service.

I have rang the finance department and I have been told that they are asking this as to allow them to correctly calculate what my Pension Related Deduction should be.

Now I queered with them that, my pension related deduction has also been fluctuating on all my payslips (fortnightly basis) from anything between 65 - 130 euros per pay period depending on what i have earned for that pay period. They explained that this is because I was originally put on a system called "week 1 basis" when i first started employment with them 26 months ago. They also explained that once i declare that i am not contributing to any 2nd or 3d public service pension scheme that i will then benefit of the "new thresholds" that have been outlined since the last budget.

They explained that this would mean I will be paying a flat annual rate for my Pension Related Deduction as opposed to fluctuating amounts for every pay period. They certainly made this sound like it was in my favour to declare myself as having only one pension contribution although as always i am skeptical.

My question lies: On looking over my past payslips for the previous 5 months it appears that i am paying far more in Pension Related Deduction than I am on my Pension Contribution which surely means that I am at a loss? Both the PRD and pension contribution are a mandatory deductions for my pay so i can't dispute that but does it not seem crazy that i am paying eg- 100 euro per month pension and then 230 per month Pension Related Deduction????? The deduction is outweighing my pension so what is the point in having it?

Would this be likely to change dramatically once I declare myself as paying into only one pension with the finance dept?? Would I be likely to see a reimbursement if i have been paying a excessive amount in Pension Related Deduction over the past two years?

Anyone else paying more in Pension Related Deduction than in actual pension contributions?

Thanks

namenotavailablE

It is certainly possible to pay more in PRD than in 'regular' pension contributions- it's the same with me. This is typically because the 'regular' pension is a fixed percentage of your pay whereas the PRD is on a graduated basis- the first annual €15000 is exempt, the next €5000 is going to be at 2.5% from January (currently 5%), the next €40000 is at 10% and all income thereafter is at 10.5%.

I can't find an answer re refunds but would guess (which of course may be incorrect) that if the amount deducted from your pay is 'incorrect' that a refund should be made. However, I simply don't know the procedures in that respect.

subscriber

Just to put forward a second question also that I forgot to include in the original post. A colleague of mine mentioned in passing that Pension Related Deductions are due to end for public sector employees in December 2014. Has anyone else heard this also?

I am hesitant to believe it.

Geuze

Absolutely no mention of the PRD ending, sorry.

Geuze

On the main question, as the PRD is 10 % of much wages, with exemptions, and normal pension fonts are 6.5% of nett wages, i.e. wages less twice the State pension, then yes, it's possible that the PRD exceeds the normal pension conts.