Contributory pension

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Cookieandlexi

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I started work in the public service in 1980 as a temporary nurse and accumulated 356 class A contributions. In 1986 I became permanent and changed to class D contributions from them until 2017 when I took early retirement. My question is will I be entitled to a pro rata contributory pension when I reach 66 in two years time with the above contributions. I have €20,000 in a AVC fund which I believe would give me 52 contributions if I withdrew €5000 each year. Should I consider this option to bring me up to 520 or would I have any pension entitlement with just the 356 together with the class D contributions. I am aware that drawing down €5000 annually would incur a lot of tax on the withdrawal so would only do this if it is worthwhile for me
 
With your 356 full rate paid contributions, you will qualify for a pro rata pension.

If you managed to get to 520 full rate paid you would get a larger pension calculated using a combination of Yearly average and total contributions. You could get 52 class S for this year if you start an ARF and make a 5k drawdown. You could do the same for 2026 and 2027. This would bring you to a total of 512. You would need an extra 8 contributions in 2028 to reach your target.

You would need to deferr your COAP until early 2028.

You need to work out what level of pro rata pension you would get and compare this with the higher pension you would achieve with 520 full rate paid contributions.

You also need to take into account how much pension payments you would lose as a result of deferral.

It would very likely be advantageous for you if you reach 520 full rate paid contributions before you claim your COAP.


If income tax on ARF drawdowns is a problem you could procede as follows...

Drawdown 5k this year. Then reduce your drawdowns to a lower level. You could then pay voluntary Prsi contributions based on your class S contributions in 2026, 2027 and 2028. This would cost you 650 euro per year.
 
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The calculation formula is here

Pro-rata pensions

You may get a pro-rata pension if you have a mixed insurance record, for example, if you worked in both the public service and private sector.
www.citizensinformation.ie

There is more information on pro rata compared to a larger COAP if you achieve 520 full rate paid level here.

Pre 95 retiring with 30 years service

Am working part time for the past few years and want to keep doing so until retire at 60. Salary is currently about 32k and on lower tax bracket. When should I start paying into a lump sum AVC to bring upto the 1.5 times salary when I retire. And is the purpose of this so that I can claim 20%...
www.askaboutmoney.com
 
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I think I will follow your advice and drawdown 5K from ARF this year and then pay voluntary contributions for next 3 years.
I omitted to mention earlier that I have drawn down €860 annually from ARF for past 3 years and have paid class SO prsi. I assume this is of no benefit for pension contribution. It wasn’t included in the contribution statement I received from MyWelfare but I have requested a review of this
 
Yes, that's correct. You get no Reckonable class S contributions if you drawdown less than 5k.

You can apply for a refund of the cost of your class S deductions when you have less than 5k drawdowns. You could backdate your claim. I'm not sure how many years backdated are allowed. You could contact DSP and enquire about this.

There is more information here about Prsi contributions after age 66 and how the COAP calculation is done for Yearly average and total contributions.

Information on pension calculations after age 66.

If a customer decides to defer their pension, will the years worked after age 66 be counted as part of their yearly average? If a customer chooses to defer their pension, the number of extra years worked will add to the divisor for the yearly average. (e.g. if a customer has 50 years cons at...
www.askaboutmoney.com

In 2028 the remaining 8 contributions you need to reach 520 full rate will be counted for both YA and TC calculations. You do not need to defer until the end of 2028. The extra year in the YA calculation will not change anything. With 520 paid contributions you will still have a yearly average over 10.

You could apply to start your COAP 8 weeks into 2028. You should include in your application that you will be paying voluntary contributions for 2028.
 
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I think that she could also apply to top-up her Class S contributions in respect of the 3 years when she drew from her ARF? (This would be done by submitting a VC1 Form and she can go back for up to 5 years). That way, the top up would only cost her a max of €500 a year, rather than €650.

Probably worth a try in any case. If they say "no" she's no worse off!
 
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