Are civil service pensions funded?

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phoenix53

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"In general, only schemes for commercial State bodies have a dedicated fund to meet pension liabilities. Schemes in the non-commercial public sector, such as the civil service, local government, education, Gardaí, prison services and health services are financed on a 'pay as you go' basis."

HI. the above was a topic of discussion recently and there was a difference of opinion in the source of civil service pensions already in payment.

One said, they assumed there was a pension fund and the civil servants pensions in payment came from that.

Another said No, that each year, civil servants pensions in payment had the first call on the budget for the year and that it came from the government funds in the same way all other expenditure does.

I have no idea what the correct answer is. Out of curiosity only, can anyone tell me how it works? The scenario being, I'm a retired civil servant who worked in administrative role in the Dept of Transport (just an eg), where does my pension payment come from?

Thank you
 
Dr Strangelove said:
It comes out of general taxation.

There is no fund.
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Does the additional monies (millions) deducted from all public and civil servants Salaries re the “Temporary Pensions Levy” and the Additional Superannuation Contribution deducted since 2009 go towards civil servants pensions.
 
november16 said:
Does the additional monies (millions) deducted from all public and civil servants Salaries re the “Temporary Pensions Levy” and the Additional Superannuation Contribution deducted since 2009 go towards civil servants pensions.
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Millions?! Thousands of millions!

-PRD Yield
YearAmount
2009€837,419,000
2010€948,605,000
2011€960,224,000
2012€934,739,000
2013€925,986,000
2014€877,800,000
2015€875,985,000
2016€705,998,000
2017€478,617,000
2018€522,499,000

-ASC Yield
YearAmount
2019€439,440,000
2020€412,243,000

The years 2009 to 2016 do not include Local Government PRD yields. The years 2017 and 2018 do not include the HSE PRD yield. 2019 and 2020 Figures do not include the HSE ASC yield.

www.oireachtas.ie

Public Sector Pensions

Public Sector Pensions Dáil Éireann Debate, Thursday - 3 June 2021
www.oireachtas.ie
 
ASC jumps from 3.5% to 10.5% when you hit €60,000 - a figure that hasn’t been adjusted since 2020.

With pay rises past and expected I could imagine a good 20% of public servants will be pulled into this top bracket by 2025.
 
A public servant retiring now on a salary of €70,000 with full service will get a pension for life of €35,000 per year, with increases in the pension, spouse's pension if they die first and a lump sum of €105,000. A private sector employee would need to accumulate over €1 million to get the same benefits. Public servant was only paying the PRD and ASC since 2009.
 
phoenix53 said:
"In general, only schemes for commercial State bodies have a dedicated fund to meet pension liabilities. Schemes in the non-commercial public sector, such as the civil service, local government, education, Gardaí, prison services and health services are financed on a 'pay as you go' basis."

HI. the above was a topic of discussion recently and there was a difference of opinion in the source of civil service pensions already in payment.

One said, they assumed there was a pension fund and the civil servants pensions in payment came from that.

Another said No, that each year, civil servants pensions in payment had the first call on the budget for the year and that it came from the government funds in the same way all other expenditure does.

I have no idea what the correct answer is. Out of curiosity only, can anyone tell me how it works? The scenario being, I'm a retired civil servant who worked in administrative role in the Dept of Transport (just an eg), where does my pension payment come from?

Thank you
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It worries me somewhat that some civil servants, who are by definition in charge of public administration, think that there exists a public service pension fund.

If it did exist, there would be commentary and debate about its size, asset allocation and annual performance.

There is no such discussion, as it doesn't exist, and yet some staff think it exists??
 
Protocol said:
It worries me somewhat that some civil servants, who are by definition in charge of public administration, think that there exists a public service pension fund.

If it did exist, there would be commentary and debate about its size, asset allocation and annual performance.

There is no such discussion, as it doesn't exist, and yet some staff think it exists??
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The civil servant involved in the discussion said there was no such fund.
 
I'm in the HSE, no special budget. Pensions, lump sums are just paid out of allocation from DOH.
 
jpd said:
Nor is there a fund for the State pension, whether contributory or non- contributory

I think a lot of people think their PRSI goes to a fund to pay their future pensions
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There is a Social Insurance Fund (SIF), into which all SI conts are paid.

The fund pays out all SI benefits.

However, yes, it is not a fund in the same way as a typical pension fund.
 
LDFerguson said:
A public servant retiring now on a salary of €70,000 with full service will get a pension for life of €35,000 per year, with increases in the pension, spouse's pension if they die first and a lump sum of €105,000. A private sector employee would need to accumulate over €1 million to get the same benefits. Public servant was only paying the PRD and ASC since 2009.
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What's the capital value of the state pension retiring now, Liam?
 
If it is a co-ordinated pension, which would apply to all civil and public servants since mid 90's. In the example above, The Public Servant if coordinated would get a state pension of aprox 14K

If the Public Servant had full service, they would get a pension of 50% thats 35K. Of that 14K would be paid from the contributory state pension, the remainder 21K would be funded from PRD and ASC.
 
DingDing said:
If it is a co-ordinated pension, which would apply to all civil and public servants since mid 90's. In the example above, The Public Servant if coordinated would get a state pension of aprox 14K

If the Public Servant had full service, they would get a pension of 50% thats 35K. Of that 14K would be paid from the contributory state pension, the remainder 21K would be funded from PRD and ASC.
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Most Public Servants retiring now with full service would have to be in the pre-1995 scheme, which is not co-ordinated with the State Contributory Pension. And their salary would have been lower in previous years, rising with increments over the years. So the contributions they would have made would not have been a percentage of their final salary but the pension is calculated on their final salary. The PRD and ASC were only introduced in 2009. A modest contribution towards a pension package worth over a million.
 
Itchy said:
What's the capital value of the state pension retiring now, Liam?
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Based on the current State Pensio n (c€14k) , the capitalised value would be €350k (assuming a modest level of indexation).
If you added in the increased payment for a qualified adult dependant (total c€27k currently), then the capital value would be c€675k.
Not insignificant
 
LDFerguson said:
A private sector employee would need to accumulate over €1 million to get the same benefits.
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Come on @LDFerguson - no sensible 65 year old with a one million pension pot uses it all to purchase an index-linked annuity! They might use some of it to do so but would keep the rest in equities to take advantage of superior returns over time. Likewise an ARF passes in full tax free to a spouse while a PS survivor’s pension is reduced by 50%, an ARF can be bequeathed to a child less 30% tax too. Added to this zero flexibility about when and how much to draw down for a PS pensioner - lump sum and pension start the day you retire and no later.

Also contrary to widespread belief pre-2013 PS pensions are not legally linked to salaries and can be reduced in payment ( indeed were 2009-2015).

So putting a capital value on a PS pension is a specious exercise and really should be avoided.
 
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