New Entrant Teacher - Preserved Benefit Pension

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furrym

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I started teaching in 2008, my pension scheme is new entrant; I'm on salary scale 17 and I have a primary degree allowance of €5875 which I have since I started working.

I have about 10 years to go to retirement and I am considering resigning my FT job. I have some savings and am considering not taking CNER but leaving my pension until 2034 and taking it then.

When retirement dates comes around then I’m wondering what my pensionable salary calculations would be based on.
It would be salary scale 17? Would it include my allowance or would that be gone because I resigned?
I’m going through various DES pension docs and I will talk to the INTO / DES but just thought someone out there might have an idea.

Thank you.
 
furrym said:
I'm on salary scale 17 and I have a primary degree allowance of €5875 which I have since I started working.
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Your preserved pension would be calculated on this, ie, the figure at your normal retirement for point 17 on the scale and the figure at that time for this degree allowance. Plus any pensionable allowances you may have had over the past 10 years - but you would need to have held them for a minimum of 3 years to get the full benefit.

Complicating factors might include any restructuring of the salary scale or allowances in the meantime. But basically your pension would be calculated on the above but as uprated to the equivalent rate at your normal retirement age.
 
furrym said:
I have some savings and am considering not taking CNER but leaving my pension until 2034 and taking it then.
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Make sure to keep your PRSI contributions up to make sure you qualify for state pension.

This can be done via voluntary contribution, other employment or drawdown from an ARF if you have one.
 
Thank you both for taking the time to reply. I was really hoping you'd say something along those lines.
I'm lucky enough to have been working since 1988 so my PRSI contributions are up above 1700 so that's "banked" I guess and make me ok for the OAP @ 66?

I've another 2 questions. If I was to resign June 2025 and then do casual subbing (intermittently, up to the 40 days) I would be on a casual sub qualified rate.
I believe my pensionable service would increment (if I managed to stay on the same new entrant scheme (work within each 6 month period))?
Would my "preserved pension" @ 65 / due in 2034 still use my degree allowance and as you say any pensionable allowances (or proportion of) that I had in the last 10 years?

Again, thank you.
 
furrym said:
my PRSI contributions are up above 1700 so that's "banked" I guess and make me ok for the OAP @ 66?
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Not for a full pension. You need another 380 contributions (2080 in total), which can be paid or credited. Might you have had any home caring periods that could be included?

furrym said:
If I was to resign June 2025 and then do casual subbing (intermittently, up to the 40 days) I would be on a casual sub qualified rate.
I believe my pensionable service would increment (if I managed to stay on the same new entrant scheme (work within each 6 month period))?
Would my "preserved pension" @ 65 / due in 2034 still use my degree allowance and as you say any pensionable allowances (or proportion of) that I had in the last 10 years?
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The service should count towards your pension but I don't know how it works. If in any doubt you could leave it more than 6 months before any subbing.
 
furrym said:
I have some savings
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It would be useful if you could elaborate on how much you have.

You might get a better return (albeit with some risk) by making an AVC. I’m not the expert but purchase of notional service might be an option too.
 
This is me in numbers.

I job-share and earn about 2200 net monthly.

Run a house/car/usual stuff – no mortgage or college fees.

I have access to about 25k savings currently.

In 2026, I’ll get money out of a An Post solidarity bond c. 70k

In 2032, I’ll get 377 net monthly (estimated) from a prior job pension.

In 2033, I’ll get 325 net monthly (estimated) from a prior job pension.

In 2034, I’ll get the DES new entrant pension

In 2035 I’ll hopefully get the bulk of a state pension.

I'm risk adverse & no I don’t have an AVC, I also applied to the DES last week to see what notional service would cost me.

Thank you both again…I’m a small bit of a numpty as regards all these but there’s nothing like some decisions to be made to get me focused. I hadn’t researched the max OAP contributions yet so will need to try and get 380 more (as you say paid or credited).
 
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Have a read through this thread

Key Post - PRSI and planning retirement

This Key Post is in the form of a FAQ where I don't know many of the answers. I will update the post as I get answers. 1. PRSI payable on reaching state pension age Answer: 0 (Class M) 1a. Does this relate to the start of the tax year in which you become 66? Or to after your birthday? Answer...
www.askaboutmoney.com
This will give you a better idea of the possibilities for gaining extra Prsi after you cease employment.

Aim to keep claiming Jobseekers credits up to the end of the calender year of your 63rd birthday. This will keep your options open to possibly qualify for Benefit Payment 65.
 
Hi,
I'm a primary teacher & I've filled in the relevant form for the Dept of Ed re a quote for notional service. They won't quote me until 6 weeks off my birthday.
I'd like to get a rough idea now of how much it would cost me.
Would any of you know if the Establish Civil Servants (new entrants) modeller @ https://www.publicservicepensions.gov.ie/en/publications/civil-servants/ would give me a rough idea?
I'm v. familar with their teacher pension modeller available @ https://penmod.education.ie/ but I don't see a "teachery" one available to give me a notional service quote.
Thank you.
 
You need to do your sums on whether it you'll get more from taking Cost Neutral Early Retirement (CNER) at 56 rather than deferring it to 65.

Below I have attempted to work it out. You'd want an expert to double check it.

I've taken your age as 56 on retirement, point 18 of scale (same € as point 17), using latest pay scales as of the Aug 2025 pay rise.

From my rough calculations you'd only break-even on your pension if you deferred it to 65 at age 82! So seems a no brainer to take the reduction at 56 and draw down.

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@TheJackal Ive only just seen your response now....i really appreciate what youve thrun out there for me to look at as regards preserved Vs CNER. Once I'm back on my laptop I'll go through it carefully.
Thank you.
 
@TheJackal thanks again for crunching those figures for me. I’m here re-creating your excel sheet &I’m good with working out that CNER reduced figure of €6049 for age 56-64. It’s been more than helpful having your spreadsheet as a template when I’m looking at the depts pension documents/calculations.

This is going to probably cause a lot of you to shriek in horror – I actually thought (!) that as a new entrant (post 2004) that when I get to OAP age – Class A/contributing mostly since 1988 - that I would continue to get a Dept of Ed. pension and an additional OAP based on my contributions. But looking at that spreadsheet from age 66 it looks as if it’s contributory OAP only once I hit 66. That’s correct?

And thank you again for taking the time (& interest) to reply.
 
In your case above, you teachers pension for 18 years with reduction is less than OAP annually, so you'd just get OAP I think.

If you teachers pension was say 5K higher than OAP, you'd get OAP + 5K from Dept of Education.

Again worth getting an expert to run through it but glad it has helped
 
TheJackal said:
In your case above, you teachers pension for 18 years with reduction is less than OAP annually, so you'd just get OAP I think.

If you teachers pension was say 5K higher than OAP, you'd get OAP + 5K from Dept of Education.
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I don't think @TheJackal is correct. The OP @furrym is Class A PRSI not Class D - so the COAP is payable in addition to the occupational pension. The pension is 'integrated' which is why it does not all accrue at 1/80th, some only accrues at 1/200th which to allow for the entitlement to COAP. By contrast the 'old' pension that was received by people paying Class D all accrued at 1/80th and no COAP was payable.
 
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TheJackal said:
you'd only break-even on your pension if you deferred it to 65 at age 82! So seems a no brainer to take the reduction at 56 and draw down.
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@TheJackal - a couple of observations that I'd welcome your thoughts on.

@furrym is a New Entrant and entitled to an Occupational Pension (based on salary & service) and a State Pension (based on PRSI history).

To advise such an individual whether to take an actuarially reduced pension from age 56 (CNER) or to resign but defer drawdown of the pension at normal retirement age, I'm not sure the above is accurate, but I'm not an expert in this area.

The 'Pension' column (for a New Entrant) should be called 'Occupational Pension' and should not mix in the State Pension for the purposes of this analysis (as in both situations the State Pension will come due from age 66).

What is important is to strictly compare the occupational pension (and lump sum) in the two scenarios (also allowing for the Supplementary), to see how an individual would fare out over time and to arrive at a break-even age.

In the actuarially reduced scenario, the €6,049 pension will be in receipt until age 65; then there will be an increase of the Supplementary Pension for 1 year, but the Occupational Pension should presumably (?) reduce back down from age 66 (as from that age the individual will be in receipt of the State Pension).

Similarly, from age 66 in the Drawdown @ 65 scenario, the Occupational Pension figure should drop back down to the €9.9k figure (as the State Pension will be in receipt from age 66 and the Supplementary Pension should end the day before one turns 66).

In practice, the €6,049 will be incrementally increasing (for salary growth at the former grade) in the actuarially reduced situation. In addition, the preserved pension and lump sum will be higher at drawdown (as it will have increased for salary growth at the former grade).

For these reasons, I think the non-CNER situation catches up with the CNER situation a lot quicker than age 82 and there is a danger here of @furrym locking into a lower lifestyle beyond the mid-70s. That's not to say that there aren't good reasons to retire early, but one needs to be careful with electing for CNER.

Again, I'm not an expert on public sector pensions, so feedback welcome on the above.
 
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