rogeroleary
Registered User
- Messages
- 191
Thanks POC - responses in bold below:
- Is she paying PRSI at A or D class? - A class
- Was she paying stamps A class stamps in previous jobs? YES
- What is her retirement age? 65
- She thinks she can go at 60 but obvously she would have less service than @ 65 so less pension
Hi Roger. It is important to establish who exactly is her employer, as that will dictate if she will fall under HSE Superannuation Scheme and she can then contact HR and establish her entitlements.
Roger,
How part-time is Mrs O'Leary's work ? Has it been half-time for the past 20 years (ie, the equivalent of 10 whole-time years) or has there been some other pattern ? Nope, that has been a consistent pattern
When you say €25000 is the salary does this mean what she is actually paid annually for her part -time hours or does she get paid a portion of this corresponding to her work pattern (eg, half) ? it's €50k pro rated to €25k for part time
Assumption 1
Mrs O has worked 20 years (half- time) in a position with a salary of €50000 attached. As she has worked half-time she earned €25000 per year (or 10 years at €50000, for pension estimate purposes).
If Mrs O continues her current work pattern until 65 she will be eligible for an Occupational Pension of approximately €4100 and a tax-free lump sum of approximately €24500. As Mrs O appears to have a good PRSI record she may obtain a full or nearly full State Pension at 67. She may be eligible for a further supplementary pension from her her employer (circa €4100) if she not eligible for any Social Welfare payment in the interim.
If Mrs O retires at 60 her lump sum is approx €20000 and Occupational Pension €3350. She may be eligible for Jobseeker's for 9 months. She might continue to sign for PRSI credits afterwards to keep up her record. After the Jobseeker's ends she can apply to her Employer for a Supplementary Pension and if she meets the conditions for this it should be about €3400 pa until State Pension age.
Thanks very much ER - really appreciate thatRoger, A few further thoughts.
If Mrs O happened to have had such service 20 years ago it was likely at a lower salary point than now. - Yes I would think so
Others will know more about this, but I think the capping of contributions for tax purposes is at the same rate for AVCs and for notional years purchases. Given Mrs O's salary, her tax relief would be at the 20% rate, (right ? - I'll check that with her) ......her best way to max the pension would be to go full- time (building up her service years), work until 65, and purchase AVCs or purchase notional years while getting 40% tax relief (But I'm not trying to raise any discussions between you). eh....it would take a braver man than me to tackle that specific proposal but I do get your drift ER
I wouldn't know enough to advice between AVCs and notional years, but the benefits obtained through notional years are mostly in terms of enhancing the annual pension - Mrs O will need to stay around long term to make any gain. Also, she is probably a member of the Spouse's and Childrens component in the NHASS. If she purchases notional years she will also be obliged to fund this component notionally as well. It may, or may not be, a priority for Mrs O to make additional provision for you after her demise ! I wouldn't think so On the other hand, Mrs O should have the opportunity to enhance her tax free lump sum somewhat via the AVC route and if she puts any remaining loot in an ARF/AMRF she can control draw down of it more readily. that's definitely something we'd like to explore.
Best of luck, Roger. I am going to be off-line for for the next few days. I'll catch up with how you and Mrs O are getting on after that.
Roger,
How part-time is Mrs O'Leary's work ? Has it been half-time for the past 20 years (ie, the equivalent of 10 whole-time years) or has there been some other pattern ? Nope, that has been a consistent pattern
When you say €25000 is the salary does this mean what she is actually paid annually for her part -time hours or does she get paid a portion of this corresponding to her work pattern (eg, half) ? it's €50k pro rated to €25k for part time
Assumption 1
Mrs O has worked 20 years (half- time) in a position with a salary of €50000 attached. As she has worked half-time she earned €25000 per year (or 10 years at €50000, for pension estimate purposes).
If Mrs O continues her current work pattern until 65 she will be eligible for an Occupational Pension of approximately €4100 and a tax-free lump sum of approximately €24500. As Mrs O appears to have a good PRSI record she may obtain a full or nearly full State Pension at 67. She may be eligible for a further supplementary pension from her her employer (circa €4100) if she not eligible for any Social Welfare payment in the interim.
If Mrs O retires at 60 her lump sum is approx €20000 and Occupational Pension €3350. She may be eligible for Jobseeker's for 9 months. She might continue to sign for PRSI credits afterwards to keep up her record. After the Jobseeker's ends she can apply to her Employer for a Supplementary Pension and if she meets the conditions for this it should be about €3400 pa until State Pension age.
I'm on the same scheme as Mrs O at the moment, and I have done both.
I assumed from your first post that Mrs O has been paying Superannuation throughout her Public Sector career - so isn't eligible to purchase previous service, and you have confirmed that in later posts. (I was able to purchase 2 periods of previous service. One when I was on a temporary contract, and one when I was part time - but wasn't eligible to pay superannuation until rules changed years later). This is very interesting because she did work there for a while full time before our kids came along and left for about 10 years.
IF Mrs O is eligible to purchase previous service, she would have to do that before purchasing Notional Service.
Regarding Notional Service - I was given 2 sets of figures, depending on whether I planned to retire at 60 or 65. They looked at the shortfall of years if I retired at 60 or 65. They gave me a cost per month to purchase each year of the shortfall (shortfall is higher if I retire at 60, and cost per year purchased is higher if I retire at 60 as I have fewer years to pay). They also gave me a figure if I chose to purchase the maximum amount. Monthly purchases must start at Mrs O's birthday. Good to know as that's in Q3
Initially I didn't purchase the maximum amount, based on age 65, as it would've exceeded the threshold for maximum tax relief. Thank you, I will check that. However my circumstances changed since then and I am now paying the maximum amount based on retiring at 65.
I'm no expert on this subject and don't work in HR! But I do understand my own situation well.
I suggest Mrs O contacts her HR Dept. We'll definitely do that. They should be able to give her some basic information quickly, but it could take a while to get the paperwork in order especially if figures need to be agreed with the pensions section in Manorhamilton.
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