Can I retire at 57 and defer a teacher pension until 60 and drawdown an AVC and other pension?

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sidzer

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Hi all,

I am planning on retiring in 4 years time at age 57.75 I am a pre 2004 and post 2005 teacher with a retirement age of 60.

I will have approx. 35.5 years service which includes @ 8 years Notional Service Purchase.

I am currently paying into an AVC and aiming for the fund to reach approx. €50K by my retirement age at 57. I also have a DB pension from my first employment which will be approx. €9k PA.

This would give me a pretax pension of approx. €575 / week from 57 - 60. My AVC would be used up by 60 and a that stage I could start collecting my teaching pension.

My Question:

Can I retire from my teaching job and defer my teaching pension until I am 60 - and use the AVC fund plus my DB pension to keep me going from retirement at 57 until I am 60?

The reason is that I would get the full value of my teaching pension from 60 instead of actuarial reductions from 57/

Thanks - Sidzer
 
No. Assuming the AVC related to the teaching job, it can only be taken at the same time as the main scheme. It's also unlikely (but not impossible) that the DB scheme would allow early drawdown.
 
No. If your AVC is associated with your Public Service teaching pension, you must access both at the same time. So if you retire at 57.75 but don’t drawdown your teaching pension until age 60, you must leave the AVC fund as is until age 60.
 
To jump on this, if the avc were ceased/paid up now and Sidzer began a seperate Avc not associated with her Public Service Pension could she transfer the now paid up funds in the existing AVC (I believe she would need to obtain a statement of comparability, I think it's called) to the new AVC and then do what she is contemplating above?
 
1eyeonthefuture said:
To jump on this, if the avc were ceased/paid up now and Sidzer began a seperate Avc not associated with her Public Service Pension could she transfer the now paid up funds in the existing AVC (I believe she would need to obtain a statement of comparability, I think it's called) to the new AVC and then do what she is contemplating above?
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No
 
Would you recheck your €9K per annum calculation of your DB pension again. You were 30 roughly you started teaching and so were working in a pensionable job for max 9 years (allowing 3 years for teacher training).

If you are entitled to 1/80th per year you were earning approx €93K when you left that job? Or if you get 1/60th per year you were earning €73K when you left that job. Would that have been your salary back in 1991? Also most DB schemes penalise for early drawdown so check your scheme details to determine what the penalty is.
 
Clamball said:
Would you recheck your €9K per annum calculation of your DB pension again. You were 30 roughly you started teaching and so were working in a pensionable job for max 9 years (allowing 3 years for teacher training).

If you are entitled to 1/80th per year you were earning approx €93K when you left that job? Or if you get 1/60th per year you were earning €73K when you left that job. Would that have been your salary back in 1991? Also most DB schemes penalise for early drawdown so check your scheme details to determine what the penalty is.
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I have been in contact with the pension administrator. I think the pension was1/60 - it is a guinness pension.

I left in 1994 after 6.5 years work - and was on approx. £25k at the time. My retirement age is 65 so there is a sliding scale alright but the 9K is roughly what I will get age 57 - according to the figures I got from the pension administrator.

They have just appointed a new administrator and I will recheck the figures with them.

Thanks - Sidzer
 
The figures do seem high. 6.5/60 x €25,000 = €2,700. But remember that deferred pensions are indexed at CPI from the date of leaving. Even still, your figures look excessive. Are you sure the €9,000 is not from age 65? If 65 is the Normal Retirement Age, then retiring at age 57 would reduce that figure significantly.
 
2700 @4% compound interest x 30 years is €8946, which would bring it to 2024, which is more in the ballpark. However no allowance is made for pensionable salary versus actual salary. Pensionable salary is normally salary-old age pension. And there is usually a step back of about 3% per year for each year you retire before 65. Each pension scheme has very specific rules so you are better off checking these very carefully. Do you get advised each year on your deferred pension? There may be information in those statements.

I really do hope you get the €9K per year at 57, but it seems amazing to have left a job earning €25K in 1994 after working there for 6.5 years and receive a pension of €9K from the age of 57 from it.
 
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Clamball said:
2700 @4% compound interest x 30 years is €8946, which would bring it to 2024, which is more in the ballpark. However no allowance is made for pensionable salary versus actual salary. Pensionable salary is normally salary-old age pension. And there is usually a step back of about 3% per year for each year you retire before 65. Each pension scheme has very specific rules so you are better off checking these very carefully. Do you get advised each year on your deferred pension? There may be information in those statements.

I really do hope you get the €9K per year at 57, but it seems amazing to have left a job earning €25K in 1994 after working there for 6.5 years and receive a pension of €9K from the age of 57 from it.
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But the indexation is CPI subject to a max of 4%. For long periods over the last 30 years, CPI was less than 4%.
 
I agree Conan, I was thinking the same. So Guinness either have an amazing pension scheme, and I am very jealous or there is something missing in the projections.
 
Also worth checking into your 8 years Notional Service Purchase.

If you are paying for these in your fortnightly payslip, the amount charged is likely based off an age 60 retirement. If you went at 57 you may have underpaid for these 8 years so any balance owing would probably be taken from your lump sum.
 
Conan said:
The figures do seem high. 6.5/60 x €25,000 = €2,700. But remember that deferred pensions are indexed at CPI from the date of leaving. Even still, your figures look excessive. Are you sure the €9,000 is not from age 65? If 65 is the Normal Retirement Age, then retiring at age 57 would reduce that figure significantly.
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There is a new pension administrator and I am going to get it clarified. It is worth approx 12k pa at age 65 and the 9k is a CNER rate.
 
TheJackal said:
Also worth checking into your 8 years Notional Service Purchase.

If you are paying for these in your fortnightly payslip, the amount charged is likely based off an age 60 retirement. If you went at 57 you may have underpaid for these 8 years so any balance owing would probably be taken from your lump sum.
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I started paying these at age 50 (4 yrs ago) at age 57.75 I will have 8 yrs purchased. I am approx 10 yrs short and If I worked until I am 60 then I would have a full pension - but by leaving at age 57.75 I will have appox 35.5 years
 
Clamball said:
2700 @4% compound interest x 30 years is €8946, which would bring it to 2024, which is more in the ballpark. However no allowance is made for pensionable salary versus actual salary. Pensionable salary is normally salary-old age pension. And there is usually a step back of about 3% per year for each year you retire before 65. Each pension scheme has very specific rules so you are better off checking these very carefully. Do you get advised each year on your deferred pension? There may be information in those statements.

I really do hope you get the €9K per year at 57, but it seems amazing to have left a job earning €25K in 1994 after working there for 6.5 years and receive a pension of €9K from the age of 57 from it.
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I got this from the new pension administrators web portal. The old one had a CNER calculator. I will ring them to get more figures for early retirement at 57.

Thanks
 
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