Re: Public sector pension - Option to buy back service with periodic contributions
Rainy,
I'm amazed how long it's taking the Dept. of Finance to increase the regular contribution rates in line with the lump sum rate increase - it would appear that exactly the same actuarial considerations must apply in either case.
I hurriedly took out a notional service contract last year when I discovered the rate rise was on its way. The mere fact that something is about to rise in price does not make it a good deal in itself, of course. However, I was struck that the monthly contribution I ended up paying was less than I had been paying into an AVC scheme originally designed to deliver exactly the same benefits.
The downside of notional service is that, unlike an AVC scheme, you're not building up capital and, apart from the spouse's pension, you've nothing to hand on to the next generation.