Help with a pension?

flipflophead22

So I am almost 40 and only now starting up a pension, I have recently started a new role and I have the option to pay into the work pension here, I pay 3% and the company will match. Its with Irish Life and I just wondered is this a good option or are there alternatives out there where I can do one outside of work and get decent benefits from it? Sorry its all new so just wanted to ask opinions here.

Thanks

eldamo

i'm 36 and have only recently started paying any attention to the pension which has been silently accruing for the past 12 years.
I used this online calculator to get an idea about it.
https://www.pensionsauthority.ie/en/LifeCycle/Useful-Resources/Pension-Calculator/

I don't know your current position or your intentions but 3% + 3% sounds a bit low to me. You get tax benefits for contributing up to 20% of your salary until you are 40, thereafter it raises to 25% and onwards and upwards.
https://www.cwps.ie/increase_your_pension/IncreaseYouPension/AVCsandTaxrelief/default.aspx

What is your companies position on this, is 3% the max they will contribute, or will they match you up to a certain percentage, because that could be quite valuable to you.

That said, you can only contribute today what you can afford to contribute, I have only just last week filled in the forms to top up what my employer gives (which is pretty generous) to the max I will get relief from, even then, we will have to see how it goes from here on out. The earlier you start the less painful it is.

Anyway, hopefully the calculator gives you an idea of what you are likely to get back from what you put in.

coylemj

flipflophead22 wrote: »

.... I have the option to pay into the work pension here, I pay 3% and the company will match.

That's a very low (total) contribution, especially when you've only just started and you're 40. If you contribute more, will the company match that to a ceiling higher than 3%?

Either way, you need to significantly increase your contribution. And doubly so if the company will match some or all of the increase. The company's increased contribution will be free money and you will get up to 40% tax relief on the extra you pay into the pension. Meaning that (for example), if you increase your contribution by €100 p.m. and the company matches it, you will be getting €200 p.m. paid into your pension at a potential net cost to you of just €60.

flipflophead22 wrote: »

.... I just wondered is this a good option or are there alternatives out there where I can do one outside of work and get decent benefits from it?

Whatever else you might decide to do to supplement the existing scheme, you cannot pass up the company scheme as they are contributing to it. If you go elsewhere, you will lose their contribution. Before you look at outside options like an AVC, make sure that you are getting the maximum contribution from your employer.

flipflophead22

https://imgur.com/a/8PbxFex

Does this change anything?

coylemj

flipflophead22 wrote: »

https://imgur.com/a/8PbxFex

Does this change anything?

I get this message when I click your link....

This page may contain erotic or adult imagery. You'll need to sign in if you still want to view it. :eek:

I really don't fancy reading a scanned image of your company scheme, if that's what you've posted. Can we confine the discussion to text please? Links to images are very rare in this forum.

Squall Leonhart

It's just a link to an image of the table showing

If you are under 30 Up to 15% of your earnings
If you are 30-39....

flipflophead22

haha sorry about that, let me post text.

What is My Maximum Contribution?

Please note you may contribute more than the maximum contribution the Company will place in your pension fund, provided the total contributions, however you will not receive tax relief on contributions, including company contributions, that exceed the limits set by the Government. These are as follows:
If you are under 30 Up to 15% of your earnings
If you are 30 to 39 Up to 20% of your earnings
If you are 40 to 39 Up to 25% of your earnings
If you are 50 to 54 Up to 30% of your earnings
If you are 55 to 59 Up to 35% of your earnings
If you are 60 or over Up to 40% of your earnings


Variations To Contributions

You may vary or suspend your contributions in response to changes in your circumstances or earnings. This provides you with the flexibility to increase your contributions in line with pay increases and one-off pay awards.
The Company will reserve ultimate discretion as to when and how you may vary your contributions in order to reduce the administrative burden that would otherwise prevail should the regularity of contribution amendments prove excessive.

coylemj

OP, if you're only paying in 3% then all that data is irrelevant, you're miles below the tax-free limit. Anyone here who contrbutes to threads about pensions knows all that stuff, it's on Revenue, Pensions Authority and every life company website.

The second part is pretty standard company pension stuff, it doesn't really help us answer any of your questions.

I'll ask you again....... will the company match higher (than 3%) contributions? Their will be a limit - is it 3% or higher?

flipflophead22

coylemj wrote: »

OP, if you're only paying in 3% then all that data is irrelevant, you're miles below the tax-free limit. Anyone here who contrbutes to threads about pensions knows all that stuff, it's on Revenue, Pensions Authority and every life company website.

The second part is pretty standard company pension stuff, it doesn't really help us answer any of your questions.

I'll ask you again....... will the company match higher (than 3%) contributions? Their will be a limit - is it 3% or higher?

No the max they will contribute is 3% they told me, I can contribute more but they will only go 3%

Eathrin

flipflophead22 wrote: »

No the max they will contribute is 3% they told me, I can contribute more but they will only go 3%

It's not amazing but it's better than what you'll get by going to a Personal Retirement account. Given your age, it would probably be wise to contribute a bit more than 3% even if it's not matched. Some employers will contribute a higher % depending on your age or length of service.

coylemj

flipflophead22 wrote: »

No the max they will contribute is 3% they told me, I can contribute more but they will only go 3%

If you're almost 40 then you need a lot more than 6% if you want anything like a decent lump sum when you reach retirement age. It's difficult to say how much you should be contributing but at age (almost) 40, you need to consider 15% (incl. employer contribution) as the absolute minimum starting point.

flipflophead22

Ok maybe I should start on 15% then, I don't mind tbh as having a decent sum at the end would be my priority. Current salary is 80k

seannash

flipflophead22 wrote: »

Ok maybe I should start on 15% then, I don't mind tbh as having a decent sum at the end would be my priority. Current salary is 80k

Just for context, my company matches up to 5%. I contribute the max I'm allowed to contribute for my age bracket (20%). If you can do that I'd suggest you do the same.
Also if you get a comapny bonus ask the company can you contribute them to your pension.

flipflophead22

Thanks folks, I will give irish life a call tomm and have a chat with them. One more quick one, is 500k the average projected amount that someone can expect to receive at retirement age?

Padre_Pio

All good advice.

Your first step should be to work out how much you want to retire on, then base your contributions on that. You've 26 years of work left so what can you save in that time.

Ideally you should max out your contributions to take advantage of the tax savings. Open to correction, but I believe your employers contribution counts towards your %, so you contribute 22%, your employer 3% which is your total 25 tax exempt.

Best time to start a pension was 20 years ago, second best time is now.

flipflophead22

Padre_Pio wrote: »

All good advice.

Your first step should be to work out how much you want to retire on, then base your contributions on that. You've 26 years of work left so what can you save in that time.

Ideally you should max out your contributions to take advantage of the tax savings. Open to correction, but I believe your employers contribution counts towards your %, so you contribute 22%, your employer 3% which is your total 25 tax exempt.

Best time to start a pension was 20 years ago, second best time is now.

I know tell me about it haha, better late than never I guess. Im thinking my aim is 500k on retirement.

Padre_Pio

flipflophead22 wrote: »

I know tell me about it haha, better late than never I guess. Im thinking my aim is 500k on retirement.

Ok, just remember that's 500k in 2045 money, which may be a lot less than now, and may have to last you 30 years, or 16.5k a year plus state pension (whatever that turns out to be)

Talk to an advisor or two, get expert advice.

Squall Leonhart

500K of a pot being built in 26 years means a lot of money every month for a long time!

Gross over simplification, 950/month @ 5% growth per annum for 26 years will give you a pot of €544K for an investment of €285K.

Present value calculator is like a reverse compound interest calculator.

https://www.calculator.net/present-value-calculator.html

There are all sorts of caveats with the figures above, but it's getting your head into a space to see what is required.

Padre_Pio

Squall Leonhart wrote: »

500K of a pot being built in 26 years means a lot of money every month for a long time!

Gross over simplification, 950/month @ 5% growth per annum for 26 years will give you a pot of €544K for an investment of €285K.

Present value calculator is like a reverse compound interest calculator.

https://www.calculator.net/present-value-calculator.html

There are all sorts of caveats with the figures above, but it's getting your head into a space to see what is required.

Yep, the 5% growth is very optimistic, especially towards the end of a pension.

thebourke

correct my if i am wrong but dont you also pay tax when you come to retirement age!!

seannash

Got a bit of a stupid idea but would the op be better off maxing out his pension contributions to avail of the 40% tax relief on contributions and then take out a loan to make up the balance in his paycheque? Would the tax relief on the pension be more valuable than the interest on the loan?
Gotta be honest I haven't thought this through so there could be an obvious flaw in this

Padre_Pio

seannash wrote: »

Got a bit of a stupid idea but would the op be better off maxing out his pension contributions to avail of the 40% tax relief on contributions and then take out a loan to make up the balance in his paycheque? Would the tax relief on the pension be more valuable than the interest on the loan?
Gotta be honest I haven't thought this through so there could be an obvious flaw in this

The loan has to be paid back. If you're taking out a loan to live day to day, then how do you pay it back?
Unless you can defer payment for 25 years and draw down a lump sum to settle the loan plus accrued interest, but no one is going to give you that.

Again, I might be mistaken too.

If the OP was thinking about using savings as a AVC to kick start the fund, then I'd say it would be better to max contributions from salary and use savings to make up the shortfall.

Again, this assumes the OP has no significant outlays in the years ahead.

Professional advice is the best way forward. I'm just a miser and do my best to avoid PAYE as much as possible.

seannash

Padre_Pio wrote: »

The loan has to be paid back. If you're taking out a loan to live day to day, then how do you pay it back?
Unless you can defer payment for 25 years and draw down a lump sum to settle the loan plus accrued interest, but no one is going to give you that.

Again, I might be mistaken too.

If the OP was thinking about using savings as a AVC to kick start the fund, then I'd say it would be better to max contributions from salary and use savings to make up the shortfall.

Again, this assumes the OP has no significant outlays in the years ahead.

Professional advice is the best way forward. I'm just a miser and do my best to avoid PAYE as much as possible.

No i get that it has to be paid back but would compound interest on the pension and the pretax benefit on the monthly contribution not out perform the interest on loan over the years?

pwurple

seannash wrote: »

No i get that it has to be paid back but would compound interest on the pension and the pretax benefit on the monthly contribution not out perform the interest on loan over the years?

Too risky to borrow to fund speculation. This is not advisable...

What if your pension tanks due to the markets? Or the govt bring in a levy on it?

seannash

pwurple wrote: »

Too risky to borrow to fund speculation. This is not advisable...

What if your pension tanks due to the markets? Or the govt bring in a levy on it?

I get you. I guess pensions are a gamble either way right. I'm just trying to think of a way to maximize the contribution while still maintaining your income at the same level.
Perhaps a small loan (20K) to top up the take home pay reduction. Still a risk but its slightly less than the 100k option.
You could keep doing that whenever the loan is paid back.
For someone who hasn't put aside anything up til now a 25% reduction in their wages might be unmanageable but a loan repayment might work out better for them to make u the difference

Squall Leonhart

OP, I'd advise against borrowing money to fund a pension, or to enable you to fund a pension.

eldamo

seannash wrote: »

I get you. I guess pensions are a gamble either way right. I'm just trying to think of a way to maximize the contribution while still maintaining your income at the same level.
Perhaps a small loan (20K) to top up the take home pay reduction. Still a risk but its slightly less than the 100k option.
You could keep doing that whenever the loan is paid back.
For someone who hasn't put aside anything up til now a 25% reduction in their wages might be unmanageable but a loan repayment might work out better for them to make u the difference

I don't think you would find a financial adviser under the sun who would suggest doing something like this.
Maximising the tax benefits is a great goal, but only if you can afford it, your salary should hopefully increase over your time in work, you are doing well to put in now what you can.
If you don't like the look of what your pension calculator is forecasting, maybe it is time to take a look at your overall budget and see if savings can be made elsewhere, a loan with nothing physical to show for it is a personal phobia of mine.

BrokenArrows

OP there is only one way to look at this.

1. You are 40 so are nearly 15 years of contributions behind someone starting work after college. Someone in their early 20's can get away with the 3% minimum as they have a whole working career to accumulate a pension. You do not have that much time.

2. You need to contribute as much into your pension as you can reasonably afford. You mentioned you want 500k in a pension for when you retire.

If you want a 500k pension fund then and assume you will retire at 70 then you will need to deposit €500 per month into your pension for 30 years. Thats assumed you earn 8% on average for the first 20 years and 4% on average for the remaining 10 years.

If you want to retire at 60 then you would need to put in about €1000 a month for 20 years. Thats assumed you earn 8% on average for 15 years and 4% on average for the final 5 years.

BrokenArrows

eldamo wrote: »

I don't think you would find a financial adviser under the sun who would suggest doing something like this.
Maximising the tax benefits is a great goal, but only if you can afford it, your salary should hopefully increase over your time in work, you are doing well to put in now what you can.
If you don't like the look of what your pension calculator is forecasting, maybe it is time to take a look at your overall budget and see if savings can be made elsewhere, a loan with nothing physical to show for it is a personal phobia of mine.

No a financial adviser would never advise such a thing. But that doesn't mean its not a viable option.

But whether its a good option or not completely depends on the OP's financial situation and the interest rate on such a loan.

Say a personal loan at 6% was taken out for 25k over 5 years (about €460 a month) and deposited in a single go and the person stopped making pension contributions for 5 years and uses that money to pay off the loan, thus reducing the risk.
A 25k deposit + tax relief + expected return of 8% should in theory out perform due to the compounding nature.

However its still a risk and the OP could just get unlucky with the fund they choose or the market in general.

eldamo

BrokenArrows wrote: »

No a financial adviser would never advise such a thing. But that doesn't mean its not a viable option.

But whether its a good option or not completely depends on the OP's financial situation and the interest rate on such a loan.

Say a personal loan at 6% was taken out for 25k over 5 years (about €460 a month) and deposited in a single go and the person stopped making pension contributions for 5 years and uses that money to pay off the loan, thus reducing the risk.
A 25k deposit + tax relief + expected return of 8% should in theory out perform due to the compounding nature.

However its still a risk and the OP could just get unlucky with the fund they choose or the market in general.

God the expected benefit would be so marginal as not to be worth the messing around.


I started looking at tax calculators over a one year horizon vs a 20k I year loan (25% of his 80k) and then I remembered that I have a job.....


Yeah, maybe you could make it work, but dear god why?

seannash

eldamo wrote: »

God the expected benefit would be so marginal as not to be worth the messing around.


I started looking at tax calculators over a one year horizon vs a 20k I year loan (25% of his 80k) and then I remembered that I have a job.....


Yeah, maybe you could make it work, but dear god why?

Okay so some quick and dirty figures


OP earns 80k so his take home pay is 51k roughly
OP maxes out his pension contributions so his yearly salary would go do to 41k


10k difference per year but contributing 20k toward his pension per year.


Might the OP be better seeing how much he needs to top up his 41k per year in order to facilitate this level on contributions


Lets say for talk sake he says I need to maintain my full take home pay. If he takes out a 50k loan in the Credit union over 5 years he will have paid out roughly 60k to cover that loan but put 100k into his pension.


Yes I know their is risk and no financiall adviser would recommend but if the OP could facilitate he would have contributed 100k at a cost of 60k before any growth in the pension fund

eldamo

Ok, unfollowing this thread before it goes to silly town.

Pensions are supposed to be slow, conservative build ups of savings to cushion you into retirement.

They should get more conservative the closer to retirement you get.

So, if you are young and have an extra 5k lying around, invest it in bit coins for all I care, but leave a pension be a pension, slow and steady wins the race, why are we getting into the world of tax based arbitrage? just register yourself as an offshore entity in the caymans and be done with it.

Most people will have a little give in their budget if they sit down with a pen and paper and put down all of their incomings and outgoings and would be better served maximising that than getting a loan and hoping their managed fund outperforms the interest rate on an unsecured loan.

seannash

eldamo wrote: »

Most people will have a little give in their budget if they sit down with a pen and paper and put down all of their incomings and outgoings and would be better served maximising that than getting a loan and hoping their managed fund outperforms the interest rate on an unsecured loan.

But in my example its not about outperforming. Its about contributing more and paying out less.
I agree pensions should be slow but the OP is late to the game (Not incredibly late)
If they can take the 10k hit I totally agree go the full contribution route without the loan

Spleerbun

flipflophead22 wrote: »

haha sorry about that, let me post text.

What is My Maximum Contribution?

Please note you may contribute more than the maximum contribution the Company will place in your pension fund, provided the total contributions, however you will not receive tax relief on contributions, including company contributions, that exceed the limits set by the Government. These are as follows:
If you are under 30 Up to 15% of your earnings
If you are 30 to 39 Up to 20% of your earnings
If you are 40 to 39 Up to 25% of your earnings
If you are 50 to 54 Up to 30% of your earnings
If you are 55 to 59 Up to 35% of your earnings
If you are 60 or over Up to 40% of your earnings


Variations To Contributions

You may vary or suspend your contributions in response to changes in your circumstances or earnings. This provides you with the flexibility to increase your contributions in line with pay increases and one-off pay awards.
The Company will reserve ultimate discretion as to when and how you may vary your contributions in order to reduce the administrative burden that would otherwise prevail should the regularity of contribution amendments prove excessive.

So just to confirm, the company contribution is counted as part of your limit is that right?

So say I'm under 30, my company pays in 10% of salary and I pay in 5%...there would be no point in increasing my 5% because there'd be no tax relief on the additional?

Squall Leonhart

Spleerbun wrote: »

So just to confirm, the company contribution is counted as part of your limit is that right?

So say I'm under 30, my company pays in 10% of salary and I pay in 5%...there would be no point in increasing my 5% because there'd be no tax relief on the additional?

For a standard PRSA, yes that is my understanding.

eldamo

Spleerbun wrote: »

So just to confirm, the company contribution is counted as part of your limit is that right?

So say I'm under 30, my company pays in 10% of salary and I pay in 5%...there would be no point in increasing my 5% because there'd be no tax relief on the additional?

Don't presume, ask hr, they should be able to point you in the right direction.

gwalk

Spleerbun wrote: »

So just to confirm, the company contribution is counted as part of your limit is that right?

So say I'm under 30, my company pays in 10% of salary and I pay in 5%...there would be no point in increasing my 5% because there'd be no tax relief on the additional?

No,

its based on your Employee Contribution and any AVCs you make

if in doubt speak to whoever looks after the employee benefits in your organisation

Coillte_Bhoy

Im 52, working for An Post and have a defined benefits pensions that ive been in for 9 years. Wasnt really in a position before now to start putting more money away for my retirement but am a bit bewildered by all the options. Ive been advised against buying 'years of service' and AVC's have been suggested, or should i look at taking out a private pension too? Any avdice would be appreciated. I'm looking at about €200 a month that i could afford

unhappyBB

Coillte_Bhoy wrote: »

Im 52, working for An Post and have a defined benefits pensions that ive been in for 9 years. Wasnt really in a position before now to start putting more money away for my retirement but am a bit bewildered by all the options. Ive been advised against buying 'years of service' and AVC's have been suggested, or should i look at taking out a private pension too? Any avdice would be appreciated. I'm looking at about €200 a month that i could afford

Here is my understanding of the An Post pension setup, to be taken with a pinch of salt.

You contribute 1.5% of gross pay + 3.5% of net pensionable remuneration.
Your pension is 1/80 x net pensionable remuneration x full time years of service.
Your lump sum is 3/80 x pensionable remuneration x full time years of service.

Pensionable remuneration is how much of your pay counts towards your pension. Your basic pay and nda used to be 100% pensionable but because of some bad union deals it's now more like 94%. Other allowances can be fully/part/not pensionable. (Check the top right of our payslip for actual %)

Net pensionable remuneration is the above minus twice the state pension.

So here are some assumptions and an example...
You retire at 68 with 25 years service. You currently earn 40k. State pension is 12k.

PR: 40k x 0.94 = 37,600
NPR: PR - (12k x 2) = 13,600

Pension: 1/80 x 13,600 x 25 = 4,250
Total pension = 4,250 + 12k (state pension) = 16,250
Lump sum: 1/80 x 37,600 x 25 = 11,750

---

Now, AVCs...
The An Post AVC scheme is like your own stand alone pension but is tied to when you retire from An Post / draw down from the main scheme.

It is run by Halligans insurance and invested in Zurich lifes PensionStar Dynamic/Performance/Balanced/SuperCAPP fund. I think it averages growth of about 6% per year and the management fee is 0.85% + €2per month. I was told this is much cheaper than going it alone and a good choice to grow a pension pot but I don't know. I'd love to hear somebody else's opinion on this.

*Just in case, this isn't advice, this is just what I found out while looking into the same thing you are.


{{{Rumour I've heard... At retirement they are thinking of offering either a 15% bump in pension payments but no further increases ever or the current setup where the pension increases along with your current grade according to very strict rules}}}

Liam D Ferguson

That's a great explanation by unhappyBB there.

You mentioned buying back years, also known as Notional Service Purchase. That's an alternative to AVCs in that you can buy extra years in the pension scheme, even when you weren't working there. The examples above assume that you had 25 years' service when you retired. If you bought an extra year, the calculations would be based on 26 years' service so you can see how that would change what you would get.

Differences between buying back years and investing in AVCs?

With an AVC you have no certainty of what you'll get back. You choose a Zurich Life fund in this case and what you get back is entirely dependent on how well that fund performs (after charges) by the time you retire. If you buy back notional years in the defined benefit scheme, you can calculate what you're going to get in return and you're not taking on any investment risk - you don't choose funds etc. BUT there's another risk - that the terms of the Defined Benefit pension scheme might be changed before you retire.

The lump sum at retirement is tax-free (up to €200,000). In the example uphappyBB gives above, the pension scheme would give you a lump sum of €11,750. Revenue would allow you to take a lump sum of up to 1.5 times' actual salary or €60,000. You can use an AVC to bridge the gap between the Revenue-allowed maximum and what the scheme will give you - in this example €60,000 less €11,750 or €48,250. So if you build up an AVC fund of €48,250 you would be allowed to withdraw it all as a tax-free lump sum at retirement, which would be very tax-efficient given that you've got tax relief on AVCs while contributing along the way. If you buy back years, you get additional lump sum and pension whether you like it or not. You can't decide that you just want to boost your lump sum.

The charges quoted for Halligans for an AVC above look good. You can bypass this and choose your own AVC PRSA from any broker or company offering PRSAs. But the charges are likely to be higher. The annual charge on a PRSA will probably be at least 1% and the charge per contribution will be anything between 0% and 5%, depending on where you go.

FastFullBack

gwalk wrote: »

No,

its based on your Employee Contribution and any AVCs you make

if in doubt speak to whoever looks after the employee benefits in your organisation

Are you sure on that? Everything I've read suggests employer contributions count towards tax credit limit. Like this link:
https://www.oneview.mercer.ie/content/mercersubdomain/global/en/oneview/plan-your-pension/retiring-soon/maximising-pension-contributions.html

Mercer wrote:

If your employer contributes to a PRSA on your behalf it is important to note that employer contributions count against your maximum total contributions.

Humour Me

If it’s a defined contribution scheme, the employer contribution does not count towards the maximum relief %.

If is a PRSA, the employer contribution does count toward the maximum relief %.

FastFullBack

Humour Me wrote: »

If it’s a defined contribution scheme, the employer contribution does not count towards the maximum relief %.

If is a PRSA, the employer contribution does count toward the maximum relief %.

Thanks.

Have another question.

My salary is made up of base salary, car allowance and bonus. My contribution and employers contribution is a % of my base salary only.

For the max tax relief %, is it a % of just my base or my total yearly pay (base, car allowance & bonus)?

I think it will be my total yearly pay as that's the figure on my P60, so that's what revenue see.

The J Stands for Jay

FastFullBack wrote: »

Thanks.

Have another question.

My salary is made up of base salary, car allowance and bonus. My contribution and employers contribution is a % of my base salary only.

For the max tax relief %, is it a % of just my base or my total yearly pay (base, car allowance & bonus)?

I think it will be my total yearly pay as that's the figure on my P60, so that's what revenue see.

It'll be on the salary for USC shown on your P60 (or the document that has replaced the P60).

Coillte_Bhoy

unhappyBB wrote: »

Here is my understanding of the An Post pension setup, to be taken with a pinch of salt.

You contribute 1.5% of gross pay + 3.5% of net pensionable remuneration.
Your pension is 1/80 x net pensionable remuneration x full time years of service.
Your lump sum is 3/80 x pensionable remuneration x full time years of service.

Pensionable remuneration is how much of your pay counts towards your pension. Your basic pay and nda used to be 100% pensionable but because of some bad union deals it's now more like 94%. Other allowances can be fully/part/not pensionable. (Check the top right of our payslip for actual %)

Net pensionable remuneration is the above minus twice the state pension.

So here are some assumptions and an example...
You retire at 68 with 25 years service. You currently earn 40k. State pension is 12k.

PR: 40k x 0.94 = 37,600
NPR: PR - (12k x 2) = 13,600

Pension: 1/80 x 13,600 x 25 = 4,250
Total pension = 4,250 + 12k (state pension) = 16,250
Lump sum: 1/80 x 37,600 x 25 = 11,750

---

{{{Rumour I've heard... At retirement they are thinking of offering either a 15% bump in pension payments but no further increases ever or the current setup where the pension increases along with your current grade according to very strict rules}}}

`
I actually came across my Members benefits statement for last year and according to that if i retire at age 68 in 2035, i will have 22.9 years service with a lump sum of €27k and a pension of just under €1.9k which vary somewhat from your figures

unhappyBB

Those figures do line up roughly with the formulas alright. The figures in the example were chosen randomly so you would have to slot in your own PR/NPR, years of service, and the correct state pension value which I think is higher. (Although you have your statement now so it's probably no longer necessary)

There was a calculation error in the example I gave actually, sorry for the confusion:

unhappyBB wrote: »

Your lump sum is 3/80 x pensionable remuneration x full time years of service.
Lump sum: 1/80 x 37,600 x 25 = 11,750
Lump sum: 3/80 x 37,600 x 25 = 35,250

Have you decided what to do regarding the AVCs?
I've decided to go with the provided scheme but haven't actually made the first payment yet.

I'd still love to hear an opinion from somebody more knowledgeable of pensions. No sooner had I made up my mind to go with the company AVCs at ~6% return, I started seeing threads from people showing off their 13% pension growth :pac:

Coillte_Bhoy

unhappyBB wrote: »

Those figures do line up roughly with the formulas alright. The figures in the example were chosen randomly so you would have to slot in your own PR/NPR, years of service, and the correct state pension value which I think is higher. (Although you have your statement now so it's probably no longer necessary)

There was a calculation error in the example I gave actually, sorry for the confusion:


Have you decided what to do regarding the AVCs?
I've decided to go with the provided scheme but haven't actually made the first payment yet.

I'd still love to hear an opinion from somebody more knowledgeable of pensions. No sooner had I made up my mind to go with the company AVCs at ~6% return, I started seeing threads from people showing off their 13% pension growth :pac:

not yet, im going to do a bit more research, im finding it all a bit confusing tbh, i should have done this years ago but wsa having too good a a time.Anyway, better late than never i suppose