Can someone explain this story

Monotype wrote: »

At present, you'd be looking at €16,733.85 under the new scheme for 40 years work (plus state contributory).

Would I be right in assuming that your final pension is also index/inflation linked?


And what age would you start drawing down that 16.7k? That makes a big difference too.


I know a teacher that retired early a few years ago because if he didn't retire then, he'd have been worse off. There was either some package or rules were getting changed so he retired early......kind of another example of the ones there already pulling up the lsdder!

Well is it not a common refrain when pointing out about pensions that retired teachers pay is paid out of current expenditure? Rather than an actual pension pot being set aside to cover the pensions? Because a friend of mine used to try and argue that it couldn't be valued as a pension because it wasn't a pension. It was just going to be his salary. In other words, if I tried to argue that a public sector pension of X per years was equivalent to a pension pot of Y on retirement, then teachers say "it's not, because it's paid as a current expense"

evolving_doors wrote: »

Are you proposing a pension reserve fund?

I'm pointing out that, as I understand it, current and retired teachers salaries come out of the same pot. Is this understanding correct?




When it comes to national budget and allocation, education will rightfully fight its turf to increase its own resources and allocation. So what they did was allow those older teachers to retire early on better conditions than younger ones. Is that not correct? In essence they said "Here you go. You can have this option that will give you a larger slice of the pot compared to new people for the rest of your days".

So there is less remaining in the pot for younger people in order to pay for that. Ladder is pulled up. No? I'm open to correction.

evolving_doors wrote: »

How many full-time permanent posts do you see on educationposts.ie ?

I have no idea. I'd say not too many though. People already on the gravy train probably want to stay on it!

evolving_doors wrote: »

Anyhow, retiring teachers early saves an absolute fortune to the exchequer. So you let someone go who's at the top of the scale and then when the Pupil Teacher Ratio is cut there's a saving of 60K right there.

Can you explain your workings for me. Because I was under the impression that when they are retired, they still have income? The only way to save 60k would be if their income post retirement was zero!

Or suppose Mr. Murphy was on 60k a year. He gets early retirement and then Mr. Ryan gets taken on at increment 1 and also has a HDip = 36318 + 1236 = 37554. There is only a saving (in the short term) if Mr. Murphy's pension is on less than 22,446 a year. Am I reading the pay scales incorrectly? I could be.


Are there any other benefits upon retirement? As in health care etc?

evolving_doors wrote: »

People on the gravy train?

Ok I'm done.

"Genuine question" me #####

Ignore.

Never answered my points about pensions being paid out of same pot as salary. Seemed happy to answer until figures were asked or questioned. :cool:

Sir123 wrote: »

A quick Google will give you the answer and the standard superannuation costs we pay as well as the additional superannuation charge we pay in addtion to the above. They both come out of our salary. Regardless of whether pensions are paid from current expenditure, we do make a contribution generally for 40 plus years and we also expect our employer to contribute as is the norm elsewhere.

Look that's fine. But is my point not valid that because some people were allowed to cash out early at higher pension, that it leaves less in the pot for younger workers?


Imagine if a business worked like that - paying salary to it's retired staff out of current income. Then trying to explain to new staff that they can't get a raise because Jimmy who retired early a few years ago needs to be be given better conditions than those that are still working.





I googled and this is what I see: https://www.asti.ie/pay-and-conditions/retirement-pensions/superannuation-pension-scheme/




You make a 5% contribution of your current salary. When you retire, that 5% of your current salary returns a lump sum of 3.75% of your final salary plus 1.25% of your final salary each year for as long as you live. That's incredible to be fair.



Here is an example of a typical annuity https://www.irishlifecorporatebusiness.ie/annuities-0
At 65, to purchase a payment of 4,500 a year for life will cost you 75k. The multiple is 16.67. So suppose you are on 40k now. And suppose that by the time you retire you are on equivalent of 60k. (Additionally it is actually also effectively inflation linked which is extremely valuable). So that single payment of 2k that you pay now will return back a value of 14.75k (in today's money) to you.



That's the figures. Yes, in private sector employers make contributions, but the difference in value is big.



That's considering even an early career teacher. Suppose you are 1 year to retirement and your salary is 60k. In that last year you pay 3k. At the end of the year you get a lump sum of 2.25k back immediately and get recurring payments which would be valued at 12.5k (at that point in time) back. 14.75k is an almost 400% return on your contribution for that year. (that's not even considering the fact that you pay it evenly over the year....which would actually inflate the actual annualised return rate far higher if we wanted to be pedantic!)

Nice if you can get it! .



Your non-teacher neighbour who puts 10% of their 60k salary into their pot, matched by their employer 1-for-1, will have about 12.1k value added to their pension value.


Or to compare a different way, if they also take back 2.25k immediately, they can have a retirement income of 49.25 per month from the total self-contributed 10% + employers 10% matched. You will have 62.50 a month from your 5% contribution.....you're getting a rate of 2.5 times better off.....which is why people tend to focus on your pensions!

Monotype wrote: »

Don’t forget pension related deduction and spouses and children deduction.

Ok. But, I am assuming from the name that that allows for your pension to be extended past your own life to cover for dependents? So it is in effect an extra insurance (which would increase the 16.67 multiplier from the Irish life link for an annuity)