Probably yes, it would mean a reduced pension, but it all depends on the rules of your own scheme and years of service. Is it a standard public service pension, by any chance? If not, you'll probably need to check with your own pensions people.If an employee reduced hours to maybe a 3 day week for a few years before retirement does that change the final remuneration and so the max benefit calculations for a pension. Can the reduced hours be prorated or accounted for to maintain the max benefit.
Thanks. The 3 consecutive years would answer my question. Even if a few years of reduced hours now I could still use 3 previous years for "max benefit" revenue calculationThere are two issues here:
- how benefits are calculated under your scheme rules. Normally the benefits under a DB scheme are based on salary close to retirement. If it’s a D.C. scheme then the only impact might be lower contributions for those years.
- as for Revenue limits, one of the definitions of Final Salary allowed by Revenue is the average of any 3 consecutive years ending not earlier than 10 years prior to retirement. So that might suit you better if you are seeking to avail of Revenue max calculation.
A bit of both from same employment. The max benefit is calculated on final remuneration, years of service etc. My question was on calculating final remuneration and I think it is answered above.You haven't clarified what type of pension you're referring to - defined benefit or defined contribution.
I don't think anyone here can tell you the pension rules for your own scheme, when you haven't said what the scheme is. You'll either need to share details of the scheme, or consult with your own pension admin folks.A bit of both from same employment. The max benefit is calculated on final remuneration, years of service etc. My question was on calculating final remuneration and I think it is answered above.
I was asking about revenue rule on how final remuneration is calculated. Question was answeredI don't think anyone here can tell you the pension rules for your own scheme, when you haven't said what the scheme is. You'll either need to share details of the scheme, or consult with your own pension admin folks.
Got it. In my case it was the revenue calculation one I was asking about. The DB is now closed and that pension is based on salary at the time it was closed, plus indexation to drawdown. Contributions are now DC onlyThe final remuneration calculation for your DB scheme benefits is probably not as flexible as Revenue's (which is for tax relief/tax free lump sum calculation, not calculating the benefit)