New entrant - Civil service pension

jleavy046

Hi folks,
I hope someone can give me a little general advice on the pension that I'm entitled to with the civil service.

I'm 36, just started as a HEO in a state authority in Dublin. On joining just 2 months ago I've joined the superannuation scheme.

I'm aware there's a pension calculator online and some information but to be honest it's not really making sense to me.

If I stay (at worst) in my current HEO pay scale what is my expected pension going to be? I think it's based on years of service and average salary at retirement age, but what, in English, does that mean?

I think I just need to get my head around what figures I should be putting in to the online calculator.

I would like to think that I would be able to progress to a higher pay scale during my career, however I just need to get a base line as to where I stand currently so that I can decide if I want to start an AVC or transfer my private pension pot into this scheme.

I've asked my payroll /HR the questions a few weeks ago and have not got any response yet.

Hope that this makes sense to you.

J

caviardreams

Basically for each year service you get 1/80th of you career average salary (which is basically what you earn each year added together and divided by the number of years you have worked) in your pension, so based on a full 40 years service when you retire, you would get 40/80ths (i.e. half) of your average salary in your annual pension. This is inclusive of the state contributory pension.

So if you retired at 66 with 30 years service, you would have built up your annual pension level to 30/80ths (37.5%) of your career average salary (salary year 1 + salary in year 2 + salary in year 3... etc. divided by 30)

Hope that helps!

jleavy046

caviardreams wrote: »

Basically for each year service you get 1/80th of you career average salary (which is basically what you earn each year added together and divided by the number of years you have worked) in your pension, so based on a full 40 years service when you retire, you would get 40/80ths (i.e. half) of your average salary in your annual pension. This is inclusive of the state contributory pension.

So if you retired at 66 with 30 years service, you would have built up your annual pension level to 30/80ths (37.5%) of your career average salary (salary year 1 + salary in year 2 + salary in year 3... etc. divided by 30)

Hope that helps!

Thanks a million, that's very clear and concise so thanks.

If I go with an avc, do I get to choose what funds it goes into and/or level or risk?

Thanks

caviardreams

Can't help you on the AVC I'm afraid but you can also buy extra years (notional service) if you will be short the full 40 - that may work out better for you. Check the options with HR

jleavy046

caviardreams wrote: »

Can't help you on the AVC I'm afraid but you can also buy extra years (notional service) if you will be short the full 40 - that may work out better for you. Check the options with HR

Thanks. Awaiting their response.

Cheers

Geuze

jleavy046 wrote: »

If I go with an avc, do I get to choose what funds it goes into and/or level or risk?

Thanks

Yes.

Geuze

jleavy046 wrote: »

or transfer my private pension pot into this scheme.

Not possible, as there is no PS pension fund.

It's unfunded.

jleavy046

Geuze wrote: »

Yes.

Cheers

Glenbhoy

jleavy046 wrote: »

Cheers

A query on this, a relative has joined ps, she already has a prsa from private sector and has PRSI contribs for approx 17 yrs.
The career avg makes sense, but given that she already has 17 yrs PRSI contribs, should she not be entitled to say 17/40ths of state pension on top of her 23/40ths ps pension (assuming 40 yrs working life etc)?

burkemg

Hi I'm a new entrant (temp clerical officer contract) and I noticed that they're taking superannuation from my pay each week but I already have a private pension fund invested from my previous employment. Is it compulsory for me to pay this superannuation? I doubt very much if I would ever be able to draw any pension from a temp contract as it could end up with short notice.

rainbowtrout

burkemg wrote: »

Hi I'm a new entrant (temp clerical officer contract) and I noticed that they're taking superannuation from my pay each week but I already have a private pension fund invested from my previous employment. Is it compulsory for me to pay this superannuation? I doubt very much if I would ever be able to draw any pension from a temp contract as it could end up with short notice.

It is compulsory to pay pension contributions in the public sector regardless of your contract.

Addle

rainbowtrout wrote: »

It is compulsory to pay pension contributions in the public sector regardless of your contract.

You may be able re-claim when you leave. Contact payroll.

Geuze

Glenbhoy wrote: »

A query on this, a relative has joined ps, she already has a prsa from private sector and has PRSI contribs for approx 17 yrs.
The career avg makes sense, but given that she already has 17 yrs PRSI contribs, should she not be entitled to say 17/40ths of state pension on top of her 23/40ths ps pension (assuming 40 yrs working life etc)?

The value of the 17 yrs PRSI conts are not lost, they will lead to a bigger State Pension.

It's too complex for me to explain now, but be reassured that those 17yrs conts are not wasted.

Wheety

Glenbhoy wrote: »

A query on this, a relative has joined ps, she already has a prsa from private sector and has PRSI contribs for approx 17 yrs.
The career avg makes sense, but given that she already has 17 yrs PRSI contribs, should she not be entitled to say 17/40ths of state pension on top of her 23/40ths ps pension (assuming 40 yrs working life etc)?

She will continue paying PRSI in the Public Service. This will cover the state part of the PS pension.

What a lot of people fail to point out, when bashing PS pensions, is that although staff are paying PRSI and into their pension, they are not entitled to 2 pensions. It's all rolled into one to make up the 50% pension.

4ensic15

Wheety wrote: »

She will continue paying PRSI in the Public Service. This will cover the state part of the PS pension.

What a lot of people fail to point out, when bashing PS pensions, is that although staff are paying PRSI and into their pension, they are not entitled to 2 pensions. It's all rolled into one to make up the 50% pension.

There is a PRSi deduction and salaries are notionally reduced for superannuation purposes but there is no payment into a pension. There are no pension funds. The PRSI derived pension and the state service pension are paid from surrent funds.

Wheety

4ensic15 wrote: »

There is a PRSi deduction and salaries are notionally reduced for superannuation purposes but there is no payment into a pension. There are no pension funds. The PRSI derived pension and the state service pension are paid from surrent funds.

I meant there is a payment for the pension. Where it goes is not a concern for most workers.

Most pay full PRSI and certainly anyone who joins now. Staff who joined before 2004 (I think) have their salary notionally reduced. Newer staff don't and can see the pension deductions on their payslip.

4ensic15

Wheety wrote: »

I meant there is a payment for the pension. Where it goes is not a concern for most workers.

There is no payment for the pension because there is nowhere to pay the money. There is a notional deduction but no money changes hands. It is simply an accounting trick to reduce the salary.

Wheety

It's just semantics now. If someone in the private sector was paying PRSI and the same deduction, which is labelled 'Pension' in the CS, they would get 2 pensions.

Mrs OBumble

Geuze wrote: »

The value of the 17 yrs PRSI conts are not lost, they will lead to a bigger State Pension.

It's too complex for me to explain now, but be reassured that those 17yrs conts are not wasted.

How?

If her 50% of career average salary x 23/40 is less than the state contrib persion, then what would she get?

Wheety

Mrs OBumble wrote: »

How?

If her 50% of career average salary x 23/40 is less than the state contrib persion, then what would she get?

If she is entitled to the state pension she will receive that in full plus a small amount for PS pension.

The pension is worked as state pension + PS pension = 50% salary if you have the full 40 years.

Say your average is €40k.

If you have 40 years your pension would be
€12k state pension + €8k PS pension = €20k

If you only had 23 years you pension would be
€12k state pension + €4600 (23/40ths of €8k) = €16600

Numbers are rounded for ease of calculation.

4ensic15

Wheety wrote: »

It's just semantics now. If someone in the private sector was paying PRSI and the same deduction, which is labelled 'Pension' in the CS, they would get 2 pensions.

Not necessaril. They might get a Socila Welfare pension but there is no guarantee they would get any other pension.
the Social Welfare pension entirely depends on whether the person lives long enough to avail of it and whether or not the government can afford to pay it. In any event, money changes hands in the private sector. No money changes hands in the public sector.

dubrov

Anyone know if the career average is index linked and if so to what index?

I.e. 50k might be a decent salary now but in 40 years it might only buy you a bag of crisps.

august12

Wheety wrote:

If you only had 23 years you pension would be €12k state pension + €4600 (23/40ths of €8k) = €16600

If you have 23 years prsi contributions, is the state pension like less than 12,000.

Wheety

august12 wrote: »

If you have 23 years prsi contributions, is the state pension like less than 12,000.

The scenario was the person had 17 years in the private sector. And of course I was talking about if the person was entitled to the state pension. I didn't think I had to post all the rules surrounding that.



4ensic15, you keep hammering this point.

Staff in the PS have a deduction. This is labelled 'Pension'. You can call it what you want but it's an extra tax on PS workers.

I'm not sure what your point or angle is here?

mawn_g

Hi,
I am trying to weigh up pursuing a career change into hse. It will involve a significant pay cut but am trying to find out what the pension deduction would be so that I can calculate my actual take home pay. Can anyone enlighten me?
Thanks in advance

Geuze

mawn_g wrote: »

Hi,
I am trying to weigh up pursuing a career change into hse. It will involve a significant pay cut but am trying to find out what the pension deduction would be so that I can calculate my actual take home pay. Can anyone enlighten me?
Thanks in advance

It's complicated.

See section 3 here:

https://www.hse.ie/eng/staff/benefitsservices/pension-management/pre-existing-schemes/pre-existing-scheme-booklet.pdf

This may help:

pension cont = 6.5%, of which

3% of gross
3.5% of nett pay, where nett = gross - 2(OAP)

As well as the standard 6.5% contribution, you will pay the PRD, which will be known as the ASC from 2019.

Geuze

The PRD is 10% of wages above a threshold.

2017 threshold is 28,750


http://www.cspensions.gov.ie/faq5.pdf

mawn_g

Geuze wrote: »

The PRD is 10% of wages above a threshold.

2017 threshold is 28,750


http://www.cspensions.gov.ie/faq5.pdf

Thanks for that hadn't realised how much it was.

mawn_g

mawn_g wrote: »

Thanks for that hadn't realised how much it was.

people dont!

Geuze

mawn_g wrote: »

Thanks for that hadn't realised how much it was.

Yes.

The media suggest we contribute nothing towards our "gold-plated pensions".

They ignore that PS have always paid 6.5% pension cont, and since 2009 pay a further 10%.

OK, the PRD now applies only after 28,750, but it's like an extra 10% tax that PS pay on any pay increase.

dubrov

There are significant drops in PRD planned for new entrants in the next couple of years. The threshold will increase to about 35k and the rate drops to about 3.5%. Google is your friend.

Be aware as well that your pension will be based on your average salary rather than final salary