Pension after resigning from Local Authority and joining Uisce Eireann

[Richard45]

I may be resigning from a local authority and taking up a position with Uisce Eireann/Irish Water. I got this job through an open competition, not by transferring from the LA. Uisce Eireann HR have stated, verbally, that I'll retain my LA pension T&Cs and will be in a defined benefit scheme. UE also has a different, defined contribution scheme.

As anyone familiar with public service pensions know, they are a minefield and not all defined benefit schemes are the same.

The impression I get from reading online is that the UE defined benefit scheme is the same as the LA single pension scheme for those who joined the LA post 2013.

In my case, I commenced employment with the LA before 2004 so my minimum retirement age from the LA is 60 and it is a final salary based scheme. Quite different to, and better than, the single scheme.

Does anyone know if I take up a position with Uisce Eireann:

a) Will my existing pension service be somehow combined with the UE pension with me continuing to accrue service under the exact T&Cs, as if I had never left the LA. Presumably, for my accrued service to be subsumed in his manner, the T&Cs would have to be the same?

b) If not subsumed, presumably, I'd get a preserved LA pension plus a separate pension from UE?

c) If the UE defined benefit pension is separate, has anyone any information on T&Cs. Are there different defined benefit schemes depending on factors like whether someone transferred from a LA or resigned from a LA and got a job via open competition?

On point a) above, my starting salary with UE is slightly lower than my salary with the LA, I'd expect my UE salary to increase over time but as of now, if the pensions were combined and I retired at age 60 with pension based on final salary, my pension would be approx 500 euro less per year.

Thanks

 

[Ruffian]

I don't have any direct knowledge of this but my reading of this Act is that (a) above would apply. It is a separate scheme but you should keep the terms and conditions of your existing scheme as regards "normal retirement age", pensionable service, pensionable salary and eligibility for Supplementary Pension (if conditions for same are met).

You may have to arrange to transfer your LA service to Uisce Eireann under the PS Transfer Network but this should be straightforward enough if you do it at the outset (don't wait until imminent retirement). The HR department in Uisce Eireann should advise on how to proceed on this. I don't know how your pensionable salary would be determined if it is lower with IW than it was in the Local Authority.

PS. This assumes that you are moving directly from your current LA position to Uisce Eireann - or a break not longer than 26 weeks.

 

[Richard45]

Thank you, that is very useful information. It looks like Schedule 1 applies and there is no legal basis for treating LA employees differently based on whether they transferred to UE or were employed via open competition (assuming that there isn't a break of more than 26 weeks which there isn't in my case)

 

[Richard45]

I was thinking again about Uisce Eireann and their pension options. If a LA employee on a final salary pension took a job with Uisce Eireann that paid considerably less than their LA job, it would seem sensible to preserve the LA pension and join the the UE PS Single Scheme or Defined Contribution Scheme. Assuming that these options were available.

Say a salary of 50k and working for 10 years in Uisce Eireann.

Single Scheme: Thanks to the great Key Post on this site, I can see that the pension contribution would be 1647 per year and at age 66, the pension payable would be 2900 per year, uprated in line with inflation.

Defined Contribution: from what I have seen, the UE scheme allows employee contribution of up to 12% with an employer contribution of up to 20%. So based on a crude calculation, not taking account of pension rules or reliefs or growth/decline, after 10 years the pot would be 10 x 50,000 x 0.32 = 160,000?

Would anybody have any views on Single Scheme vs Defined Contribution?

 

[Ruffian]

I don't know how much difference it would make to the comparable values but there is also the lump sum with the Single Scheme. Top of the head guess of about 18-19k on above numbers.

 

[Redzer]

I got this job through an open competition, not by transferring from the LA. Uisce Eireann HR have stated, verbally, that I'll retain my LA pension T&Cs and will be in a defined benefit scheme. UE also has a different, defined contribution scheme.

Might be worth trying pensions@water.ie to try to get specific advice. The fact that you're not transferring and joining via open competition might mean that your LA pension is preserved but you'd be moving onto the DC scheme? You'd have resigned from the LA but you could maybe query the above referenced 26 week issue with the UE pensions team.

my starting salary with UE is slightly lower than my salary with the LA, I'd expect my UE salary to increase over time

I presume this is why you're joining via open competition rather than transferring? Another element to consider is the Performance Management system which does typically add to the base salary and, while not part of the matching contribution calculation, does allow you to add more AVCs.

Defined Contribution: from what I have seen, the UE scheme allows employee contribution of up to 12% with an employer contribution of up to 20%

The UÉ DC scheme has a matching contribution system where members contributions from 5%-> 8% are 'matched' by a company contribution of 7%->12%. So if a member contributed 8% the company would contribute 12% bringing the total contribution up to 20%. You'd still have the option of AVCs beyond that up to your age limits.

 

[Richard45]

Might be worth trying pensions@water.ie to try to get specific advice. The fact that you're not transferring and joining via open competition might mean that your LA pension is preserved but you'd be moving onto the DC scheme? You'd have resigned from the LA but you could maybe query the above referenced 26 week issue with the UE pensions team.

Thank you, after reading Ruffian's link, I am confident that I would have at least the option of maintaining my current pension T&Cs. The point is moot for the moment though as I have turned down the job I was offered but hope to get a different one.

I am applying via open competition due to being on a career break from the LA which resulted in me being removed from the UE SLA headcount.

When I was offered a UE job, I received details on the DC contribution scheme, I thought it said 5-12% employee plus 7-20% employer contributions but I may be mistaken and can no longer check as once I turned down the job, could no longer view the pension information on the recruitment portal.

 

[CharlieMac]

So if a member contributed 8% the company would contribute 12% bringing the total contribution up to 20%. You'd still have the option of AVCs beyond that up to your age limits.

I think it might be better than this. The company's contributions no longer count against your own age-related contribution limit. Say your limit is currently 30% then under those terms you could contribute up to 30% +12% = 42% of your gross salary.