Notional service and the supplementary pension.

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acequion

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I am confused about something. I am hoping to retire at the end of this school year from my job as a secondary teacher. I will be 65 in August. I was out of the country for many of my younger years, so came late to permanent employment. I have 28 years worked full time and am buying back 10 years in the notional service scheme which will expire on my 65th birthday. I pay class AI PRSI. I got my service record from the Department of Education and with the buy back, my years total 38. However I also got my PRSI contribution statement which only lists the PRSI for the years worked, not the 10 years notional. My total contributions are around 1600, not 2080 which I read somewhere is what is needed to get the the maximum state pension. The service record from the DES sates my department pension and the gross supplementary "if applicable." It goes on to say that a teacher who pays class A1 PRSI "may" be entitled to this pension.

The "if applicable" and "may be entitled" worry me somewhat. My question is this: Is the purchase of notional years both for the DES and supplementary pension? And with 38 years service, both actual and notional, will I be entitled to the maximum supplementary pension once I reach 66?

Huge thanks in advance to anyone who can answer this question.
 
acequion said:
I am confused about something. I am hoping to retire at the end of this school year from my job as a secondary teacher. I will be 65 in August. I was out of the country for many of my younger years, so came late to permanent employment. I have 28 years worked full time and am buying back 10 years in the notional service scheme which will expire on my 65th birthday. I pay class AI PRSI. I got my service record from the Department of Education and with the buy back, my years total 38. However I also got my PRSI contribution statement which only lists the PRSI for the years worked, not the 10 years notional. My total contributions are around 1600, not 2080 which I read somewhere is what is needed to get the the maximum state pension. The service record from the DES sates my department pension and the gross supplementary "if applicable." It goes on to say that a teacher who pays class A1 PRSI "may" be entitled to this pension.

The "if applicable" and "may be entitled" worry me somewhat. My question is this: Is the purchase of notional years both for the DES and supplementary pension? And with 38 years service, both actual and notional, will I be entitled to the maximum supplementary pension once I reach 66?

Huge thanks in advance to anyone who can answer this question.
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Have you considered asking the ASTI? They should be able to advise.
 
Thanks for your reply but I was hoping somebody here might know the answer. As buying back 10 years for the last 12 has been really expensive, I'd be fairly peed off if that investment didn't purchase full entitlement to credit for those 10 years. As I think it would if class D PRSI. So hopefully class A is not subject to discrimination there. Can find nothing to cast light on this question via google.
 
When a person buys back years, isn't that for the occupational pension only? I'm not aware of being able to "buy back" prsi contributions.
 
If you're right does that not discriminate against the class A PRSI contributor? Because the class D contributor receives the entire pension from the DES.
 
From my experience retired 2yrs as a Class A Prsi public servant, this whole Supplementary Pension part of the pension is a complete mess.
Looking at your situation you will have 95% of a full pension which is the occupational+supplementary part of your pension. when you retire having completed 28yrs plus purchased 10yrs = 38 total.
You havent purchased PRSI with this 10yrs so in effect you would be better off staying on the Occupational + Supplementary when you retire.
You need to find out if this can be done, if not in effect your pension will be less with Occupational + OAP.
You really need to get onto your representative association while you are still employed
 
@stoves1 ,thanks for your feedback. How can it be possible to stay on the supplementary pension past age 66 and if possible, who can enlighten me? It really does not seem acceptable that I'd get less past age 66. I read somewhere that class A pensions should not be lower than class D. I have taken the day off today to try to get on top of this minefield but nobody seems to be able to give me a definitive answer. Whenever I consulted pensions experts before this they calculated my total pension entitlements with all my years, actual and notional as maximum, never a mention that I'd be down due to PRSI. Very disheartening if they were wrong.
 
Hi acequion, i & one other post 1995 retiree have been highlighting this with Garda pensionsfor past 2 yrs, and after many communications they told me yesterday " are reviewing not only DPER guidelines but also looking at how pensions are calculated and processed at payroll, Essentially a full review of post 1995 pension processes"
Yes you are correct when stating that A pension should be no lower than Class A PRSI, the post entitled below would be well worth reading it is located on same page of public servive pensions.
The pension experts you are talking to are experts in AVC,S, etc but not this, i would advise you to start communicating with your Union and keep everythin in writing.


Post 1995 Supplementary pension query
 
Thanks again Stoves1. I had actually read that thread and it is very interesting indeed.

My pensions experts would be the PSRA people in Maynooth, so supposedly experts in all this. I have a consultation scheduled before I actually apply to retire so hopefully they'll be able to put me right. On the yearly average calculation for the OAP I get into the second bracket which is about €5.50 less per week than the max. That's not the end of the world if it works out like that, however I've been financially planning on the basis of the maximum rate, so it is a slap in the face to discover that I may not be entitled to it. The whole thing really is ridiculously complicated.
 
Sorry to be negative but the PRSA people in Maynooth are a private company, with the intention to sell AVC,s, PRSA,s etc .
You really do need to get onto your Employer/Union Now to ensure that when you retire that your occupational pension plus your Supplementary pension is no less than your Occupational pension plus your OAP Pension, if it is you need to have the option to get the higher pension combined.
Believe me this is coming down the track for a lot of public servants and pressure needs to be put on Politicians, Public service Employers and Unions to ensure that a post 1995 retiree recieves no less than a pre 1995 retiree, again apologies for negativity but this is reality and needs to be addressed,
 
@stoves1, I agree with you that there are a lot of issues coming down the track as post 1995 people start to retire. There are a lot of anomalies. However today I eventually read through the entirety of the DES retirement pack and I found it stated in black and white that teachers who do not have enough PRSI contributions for the OAP could apply for the supplementary pension to make up the shortfall and to ensure parity with pre 1995 retirees. Several examples were given of supplementary payments. I'm too tired now [after a day of trawling through figures] to attach it here but its there and I imagine it's the same principle for all public servants. I will talk to the ASTI pensions person tomorrow, but reading that did put my mind at rest. I served many years on ASTI CEC so believe me, I know how to push an issue.

Thanks everyone who took the time to post answers to this query.
 
acequion said:
My question is this: Is the purchase of notional years both for the DES and supplementary pension? And with 38 years service, both actual and notional, will I be entitled to the maximum supplementary pension once I reach 66?
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At 66 you should be eligible for total pension payments equivalent to teacher retiring on a Class D uncoordinated pension and 38 years service. If not, you are eligible to apply for a Supplementary Pension to bring you up to this amount.

Lets say you are awarded a Dept of Ed pension of €34k and a Class D pensioner would have been eligible for €48k. Also say, based on your incomplete PRSI record at 66, you qualify for a State Pension of €12k. Then your Supplementary Pension would be 2k - payable on application to Dept of Ed. You would not be eligible for a Supplementary if engaged in any insurable employment.

The same principle applies between 65 and 66 if you are retired and not working. You apply to Social Welfare for the over 65 payment and if this still leaves you with a shortfall compared to an equivalent Class D then you are eligible to receive a Supplementary for the relevent shortfall.
 
Thanks Ruffian, not getting the supplementary pension if you are in insurable employment is a limitation of the supplementary pension scheme, when compared with the previous scheme.
 
@dingdong. That is very true and discriminates against the post 1995 cohort as pre 1995 are not affected by this. Unions need to fight this as soon the majority retiring will be post 1995.
 
Hi Acequion,

You may need to take further advice on this from your union or pension administrator, as DPER has previously confirmed that notional service is not taken into account when determining a supplementary benefit. This is backed up by guides to both pre and post primary teachers' superannuation schemes (available on the government website) that clearly states that "Notional Service is excluded in the calculation of a supplementary pension".

The Dept of Education's own guide on supplementary pensions (again on the government website) states that only the following service is taken into consideration:-

  1. Full rate PRSI (Class A) contributions while in pensionable service and/or
  2. Purchased service, for example: part time, substitute, unqualified service, or whole-time service before becoming a member of the occupational pension scheme
In effect, this seems to suggest that for the purposes of calculating a supplementary pension only, both the co-ordinated pension and the pre 1995 equivalent would be based on your 28 years of actual service only. Although there would still be a differential, it would reduce pro rata as a result of being based on 28 years rather than 38, and could be less than your State Pension entitlement (in which case no 'net' supplementary pension would be payable).
 
I saw it written in black and white in the DES pensions information, just as in the above posts, that where a teacher does not have the maximum PRSI contributions he/she would be awarded the supplementary pension to make up the shortfall and to bring them to the exact same level as pre 1995 people. It is not number of years that count for the OAP pension, it's number of contributions. According to the information I've been getting, post 1995 retirees are not being penalised for not having the full quota of contributions.
 
Another anomaly is that someone on the A stamp can claim the state pension from age 66 if they have a decent PRSI record at class A.

The state pension can be claimed even if the person is continuing working. When you are over 66, you also pay a reduced rate of PRSI as your stamps are not contributing to your state pension. At the higher levels in the public sector, this could be a significant benefit.

There are some advantages to an A stamp. A person could work for 4 years to 70, getting the contributory OAP and the PRSI reduction as the OAP is co-ordinated with the pension and not the salary.

There are people entitles to the OAP and working and do not claim it because they don't think they are entitled to it. Came across this at a pre-retirement course recently.

www.gov.ie/pdf/?file=https://assets.gov.ie/216225/98adc7d5-8641-4e9d-8f9c-5907adecdd2a.pdf#page=null

Looking at the document over 66 are class M which does not attract any employer or employee PRSI.

Also Social Welfare pensions do not attract USC, so the pension which A class retirees pay does not attract USC.
 
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My understanding is that the Supplementary Pension is available to ensure that the combination of a post 1995 (Class A) pension and State Benefit, equals that of a pre-1995 (Class B, C or D) pension in respect of the same value of Pensionable Remuneration and actual service.

It does not ensure that an individual receives the equivalent of a full State Pension even though they may have not fully met the PRSI qualifying conditions (although this will happen if someone retires with 40 years of actual service before reaching age 66 in order to qualify for the State Pension).

This is the reason public service post 1995 superannuation schemes clearly state that notional service is excluded in the calculation of supplementary pensions.

There are examples of calculating a supplementary pension in the guides to primary and post primary teacher schemes that confirm the above. However, the example below might explain the process as well.
 

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