Can anybody help with a some advice to a worker facing a choice between a pure DC scheme and a mixed DB/DC scheme?
Pure DC
Contribution rates, employee/employer, which rise with age:
0-29 5 + 8 = 13%
30-39 5.5 +9 = 14.5%
40-49 7 + 11 = 18%
50-65 8 + 14 = 22%
With the workers service, and an estimated fund real growth rate of 2%, this would grow to a fund of €554,000.
Using current annuity rates of €22 to buy €1 of pension, that fund gives a pension of €25,185 pa.
Mixed DB / DC
Contribution rates = 5% employee + 8.75% = 13.75%
DB pension based on (1/40)(service), based on a salary cap of 48,000.
This is integrated with the OACP.
Contributions based on salary above the cap will be used to build up a DC fund.
Pure DC
Contribution rates, employee/employer, which rise with age:
0-29 5 + 8 = 13%
30-39 5.5 +9 = 14.5%
40-49 7 + 11 = 18%
50-65 8 + 14 = 22%
With the workers service, and an estimated fund real growth rate of 2%, this would grow to a fund of €554,000.
Using current annuity rates of €22 to buy €1 of pension, that fund gives a pension of €25,185 pa.
Mixed DB / DC
Contribution rates = 5% employee + 8.75% = 13.75%
DB pension based on (1/40)(service), based on a salary cap of 48,000.
This is integrated with the OACP.
Contributions based on salary above the cap will be used to build up a DC fund.
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