Increase in pension age will not proceed

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KOW said:
A member of the gardai pension would cost 1.8million for a private sector worker.
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Excuse my ignorance, but I'm always a bit perplexed as to how these figures are arrived at?
I doubt if most Gardaí coming to retirement age would have even earned €1.8m throughout a 30yr career, let alone accumulated a pension worth as much.

KOW said:
A super in the gardai who might have salary of around 110k would have a pension of 55k and take home a tax free lump of 165k at age 60. There are well over 300k state employees now. The real ticking timebomb.
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Aha, I see what you did there!

There are 40-50 Garda Superintendents throughout whole country, but why not infer that their pension entitlements are comparable to the other 295,950 public servants? Clever ;)
 
WolfeTone said:
Excuse my ignorance, but I'm always a bit perplexed as to how these figures are arrived at?
I doubt if most Gardaí coming to retirement age would have even earned €1.8m throughout a 30yr career, let alone accumulated a pension worth as much.
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See here, or more detail [broken link removed]. 30 years service entitles them to 50% of final pensionable salary plus gratuity of 1.5 times final pensionable salary. How much they earned along the way has no bearing on this.
 
Leo said:
See here, or more detail [broken link removed]. 30 years service entitles them to 50% of final pensionable salary plus gratuity of 1.5 times final pensionable salary. How much they earned along the way has no bearing on this.
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Yeh, I get all that. But where did the €1.8m figure come from earlier?
If a Garda retires on €60000 salary, they get €30k pa plus one-off lump sum of €90000.
How is €1.8m calculated from that?
 
Leo said:
See here, or more detail [broken link removed]. 30 years service entitles them to 50% of final pensionable salary plus gratuity of 1.5 times final pensionable salary. How much they earned along the way has no bearing on this.
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Just to note - if the Garda is post 1995 the 50% of salary is inclusive of State Pension. Also, as a uniformed, fast-accrual grade, a garda pension is an outlier.
 
WolfeTone said:
Yeh, I get all that. But where did the €1.8m figure come from earlier?
If a Garda retires on €60000 salary, they get €30k pa plus one-off lump sum of €90000.
How is €1.8m calculated from that?
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I posted the 1.8 figure. Totally wrong. If I had a pot of say 800k and I am private sector worker. I take 200k tax free and am left with 600k say @4% giving me a pension of 24k PA. So in reality lower grade Garda has a pension pot worth somewhere in the region of 800-1m if that makes sense. Remember a lot of public workers can then take up work and build up stamps to claim partial state pension. This is not having a go at public service.
My wife retires after 40yrs next year a clerical officer. I would think that this grade is most common in public service. She will get a lump sum 38kX1.5=57k. Pension of 19k pa. I certainly dont think this is a huge pension especially when there is no OAP. Somebody who never bothered to work will get 12k pa and medical card.
Any changes and there has to be changes needs to encourage and reward work.
 
KOW said:
My wife retires after 40yrs next year a clerical officer. I would think that this grade is most common in public service. She will get a lump sum 38kX1.5=57k. Pension of 19k pa.
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And a post-1995 equivalent of your wife would get an occupational pension of €6k, plus entitlement to the State pension.
 
@Sarenco

But a public sector worker has no discretion over how to invest this notional "pot", can't bequeath it to his children, and is at risk of having a levy placed on his pension in payment if the government falls on hard times.

None of this applies to a private sector worker with an ARF.

These notional value comparisons just aren't valid.


Assume an annuity multiple of 30 and you are aged 65. Which is more valuable:
1) €50k pa for life
2) €1.5m and the option to do with it whatever you please.


Clearly 2) is more valuable as it gives you much more flexibility.
 
Sarenco said:
That's what an annuity that provides an equivalent pension benefit would cost a private sector worker.
www.irishtimes.com

Public-sector pensions worth millions, new figures show

Enda Kenny’s pension pot would cost a private sector worker €5.2 million
www.irishtimes.com www.irishtimes.com
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Thanks, but I have always shied away from pension discussions because I also got lost in lexicon.
I've never heard anyone explain these things in Ladybird language.

From what I'm understanding, in order to have a pension like Endas of €325,000 pa, it will cost me €5.2m?
Is that correct or what am I missing?

Perhaps I need to head to the Pensions section on this site? :oops:
 
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NoRegretsCoyote said:
But a public sector worker has no discretion over how to invest this notional "pot", can't bequeath it to his children, and is at risk of having a levy placed on his pension in payment if the government falls on hard times.
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Well, you can't bequeath annuity benefits either.

And I think we know from the last recession that private pensions are not immune from Government confiscation.
NoRegretsCoyote said:
€50k pa for life
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Is that €50k index linked, with a 50% benefit going to my (materially younger) spouse on my demise?

If so, I would bite your hand off for that deal for €1.5m.

If only I had €1.5m...
:(
 
Sarenco said:
Yes, an annuity bought from a life company that provides a comparable benefit would cost something of that order.
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Ok thanks, I have to say Im still baffled.
Why would anyone fork out €5.2m only to get a pension of €325,000pa?
Where is the benefit?
It will take 16yrs to draw down this fund - could be dead in 10!
And at the ripe age of say 80, maybe some faculties on the wane, or deteriorated altogether, what would I do with all this money that I couldn't have put to better use during my working life, or early retirement years?
 
WolfeTone said:
It will take 16yrs to draw down this fund - could be dead in 10!
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You could. Or you could live to 107.

Or your spouse (who is entitled to 50% of the pension when you die) could live for a further 30 years after you pass away.

Of inflation could take off again...
 
Sarenco said:
You could. Or you could live to 107.

Or your spouse (who is entitled to 50% of the pension when you die) could live for a further 30 years after you pass away.

Of inflation could take off again...
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Yes of course, any number of things could happen.
 
Public Sector pensions are unsustainable under the current funding model. That's been well publicised for years.
My point is that the State Pension liability for all pensions, paid to both public and private sector employees, are unsustainable under the current funding model. That is based on the fact that the number of retirees per head of population will double, at least, over the next 30 years.
 
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