I am a pre '95 PS worker due to retire in August this year with majority D rate contributions throughout my career. I was surprised to see in my pension estimate that I have one year A rate PRSI and that I will be entitled to a very small supplementary pension in addition to my teachers pension. I have an additional couple of months A rate PRSI from other temporary office employment. I was wondering if perhaps I would be better not to apply for the supplementary pension but rather set up an ARF using my lump sum and draw down €5,000 per year to build up additional years at S rate PRSI and then claim a partial state pension. Is this possible to do this and would it be a better plan than claiming a supplementary pension worth €400 per year? Any advice/insight would be appreciated!
Pre 95 public sector workers and Prsi until age 70.
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When you say 'supplementary pension' are you referring to a 'pro rata pension'
To get this you would need a minimum of 260 full rate paid contributions (class A or S)
If this is what you mean, then it is possible to defer this beyond age 66 up to age 70, and get extra class S contributions from an ARF.
If you manage to reach 520 reckonable paid contributions, it is most likely that this will be beneficial to you.
Put your current Prsi and possible deferred Prsi contributions into the examples in these posts.
To get this you would need a minimum of 260 full rate paid contributions (class A or S)
If this is what you mean, then it is possible to defer this beyond age 66 up to age 70, and get extra class S contributions from an ARF.
If you manage to reach 520 reckonable paid contributions, it is most likely that this will be beneficial to you.
Put your current Prsi and possible deferred Prsi contributions into the examples in these posts.
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%...
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Withdrawal from ARF before reaching 61.
If he works for 13 weeks during the Calendar Year of his 62nd Birthday, should he sign on for Credits also ? The important thing is to have a minimum of 39 contributions during the calendar year of his 63rd birthday. These can be either full rate paid class A, or Jobseekers credits.. So he...
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It is referred to as a "supplementary pension" in the information sent out from the department of education and it is quoted on the basis of 1 year PRSI A rated substitute service and retiring at age 60. It would stop at age 66 were I to be entitled to the state pension, but will continue if I am not.
Supplementary pension is related to post 95 public sector pensions.
I don't know how the deal you are offered works.
(It might be that you will have a small post 95 pension alongside your pre 95 pension).
But if you are retiring at age 60, you have an opportunity to get extra class S Prsi to add to your current 52+ class A up to age 70
You can reach 520 full rate paid contributions and get approximately 25% of the COAP at ~ age 69.
You might be able to add to this possible COAP if you get 1 or more class A Prsi contributions after you cease your class D employment. This allows you to get change of status credits.
The supplementary pension will not prevent you from gaining extra Reckonable paid contributions after you retire. You are only barred from gaining extra Prsi contributions when you have started to claim the COAP.
So you should be able to get the extra €400 per year and class S from your ARF.
I don't know how the deal you are offered works.
(It might be that you will have a small post 95 pension alongside your pre 95 pension).
But if you are retiring at age 60, you have an opportunity to get extra class S Prsi to add to your current 52+ class A up to age 70
You can reach 520 full rate paid contributions and get approximately 25% of the COAP at ~ age 69.
You might be able to add to this possible COAP if you get 1 or more class A Prsi contributions after you cease your class D employment. This allows you to get change of status credits.
The supplementary pension will not prevent you from gaining extra Reckonable paid contributions after you retire. You are only barred from gaining extra Prsi contributions when you have started to claim the COAP.
So you should be able to get the extra €400 per year and class S from your ARF.
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Thanks for taking the time to apply. It seems that the supplementary pension can also be paid in addition to the pre 95 pension if you have undertaken substitute teaching work during your career which has always been at class A. I was really surprised to see this in my pension estimate statement.
Fionclaire
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This is classed now as the OSP (Occupational Supplementary Pension) since 1st August 2024. (Circular 12/2024)
As you have one year of full service @ A1 stamp, your OSP amount, if retiring this year, would equate to €390.44 (€299.30x52.18x2.5%)
It might be a good idea to obtain a contribution statement from mywelfare, to see exactly how many contributions you currently have in A1.
I always presumed PRE1995 PS Pensions had no entitlement to the OSP, but every day is a school day.
As you have one year of full service @ A1 stamp, your OSP amount, if retiring this year, would equate to €390.44 (€299.30x52.18x2.5%)
It might be a good idea to obtain a contribution statement from mywelfare, to see exactly how many contributions you currently have in A1.
I always presumed PRE1995 PS Pensions had no entitlement to the OSP, but every day is a school day.
Yes definitely get your Prsi statement.
You are fully entitled to a portion of the COAP alongside your public sector pensions.
More information here.
You are fully entitled to a portion of the COAP alongside your public sector pensions.
More information here.
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...
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Yes, this is the exact amount I was quoted. I am hoping I could build on it which is why I have just ordered my PRSI statement. Thanks for your help.
This is really useful information. Thank you!
Because you have changed from class D to class A, you might already be entitled to change of status credits. You should check this out with DSP.
So I might not need to work one day A class after I retire? Would it matter that this change of status happened over 15 years ago and that I reverted to class D for the rest of my career?
Possibly not.
The change of status rule is, if you change from paying modified class Prsi B,C or D to class A or H, your modified contributions for the year of the change and the previous year are given change of status.
You have already done this so you probably should be entitled to change of status credits. But you should get confirmation from DSP just in case there is any unknown extra rules about this.
The guidelines don't mention anything about only getting change of status credits at the end of a career, they are awarded when a person changes to Class A or H.
The statement that they can only be granted once tends to confirm that a person could get them earlier on in their career, but then won't get them again at the end of their career.
"Change of Status Credits
Change of status credits, which are reckonable for State Pension only, are awarded when a client changes from reduced rate contributions (B, C or D) to full rate contributions (A or H) in the year they change over and for the previous contribution year. These credited contributions may be awarded on one occasion only."
Operational Guidelines: PRSI - Credited Social Insurance Contributions
Operational Guidelines: PRSI - Credited Social Insurance Contributions.
www.gov.ie
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I reread your first post.
In order to get tax relief on your AVC contributions, you must pay these before you cease your employment. I am assuming you only receive your lump sum after your retirement date. If this is true you will need other funds to make your AVCs.
You can use savings or borrow money for this purpose.
You can make AVCs for your earnings for last year and this year.
You can invest lump sums up to your allowable age related total for both years into your AVCs.
You can immediately apply for and get tax relief for last year. This tax refund can then form part of this year's pension investment. This is useful if raising funds is difficult for you.
The cheapest way to do this is to open an AVC PRSA through an execution only broker and choose a low risk fund.
Choose low risk as you don't want any short term risk of your AVCs reducing in value while withdrawing your yearly 5Ks.
More information here
AVC information for pre 95 Public Sector employees.
Can these employees make AVCs ? Yes. They can make AVCs based on non pensionable wage payments and to make up for any shortfall if they don't have the full 40 years service at retirement age. They can also make AVCs to fund for the revenue allowed 100% surviving spouses pension. The public...
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Yes, I will only receive my lumpsum after retirement. At the moment I don't have any AVCs but am planning a "last minute" one to top up my allowable lump sum. The amount in this is likely to be about €25,000 so probably not large enough to set up an ARF. I am job sharing so currently paying tax at 20%. So should I set up an additional AVC PSRA prior to retirement or is it possible to set up an ARF post retirement using the lump sum money and not availing of tax relief?
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Yes, you need to set this up asap.
You need to have all AVC payments into this before your retirement date.
You can pay all AVCs into the employer scheme or an AVC PRSA.
The employer scheme is likely to be Cornmarket. They usually have high fees for lump sum contributions. If you can manage to set up a separate AVC PRSA you will get a better deal.
Try to get the maximum age allowable AVC payments into whichever schemes you choose.
You can have both schemes.
You need to have enough in your schemes to allow you to have at least 20k remaining after topping up your Public sector tax free lump sum.
You need 4 years of 5k drawdowns to get you up to the minimum 260 full rate paid Prsi contributions required before you are allowed to make voluntary Prsi contributions.
After your ARF is exhausted you can then continue to make voluntary contributions based on your class S Prsi. These cost €650 per year.
If necessary, don't fully claim your extra public sector tax free lump sum, or make some extra non tax relieved AVCs to ensure you have approximately 22k to set up an ARF.The extra 2k will cover the yearly ARF fees so you have enough for 4 5k drawdowns.
You need to have all AVC payments into this before your retirement date.
You can pay all AVCs into the employer scheme or an AVC PRSA.
The employer scheme is likely to be Cornmarket. They usually have high fees for lump sum contributions. If you can manage to set up a separate AVC PRSA you will get a better deal.
Try to get the maximum age allowable AVC payments into whichever schemes you choose.
You can have both schemes.
You need to have enough in your schemes to allow you to have at least 20k remaining after topping up your Public sector tax free lump sum.
You need 4 years of 5k drawdowns to get you up to the minimum 260 full rate paid Prsi contributions required before you are allowed to make voluntary Prsi contributions.
After your ARF is exhausted you can then continue to make voluntary contributions based on your class S Prsi. These cost €650 per year.
If necessary, don't fully claim your extra public sector tax free lump sum, or make some extra non tax relieved AVCs to ensure you have approximately 22k to set up an ARF.The extra 2k will cover the yearly ARF fees so you have enough for 4 5k drawdowns.
There is a lot to digest here but I really appreciate you posting all this information and hope it helps others in a similar situation too. Another avenue I am exploring is that I have 25 years national insurance now credited towards my UK pension which has been at minimal cost to me. Should I try to combine this with my 1 year Irish A rate insurance and apply for the Irish state pension instead of the UK one?
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@Threadser, you may be aware of this already, but as things stand you will not qualify for any Irish State Pension. That being so, you will be eligible to retain your small Supplementary Pension for life (as long as you are not in insurable employment). If you become eligible for any Irish State Pension you will lose the Supplementary. You might need to take this into account in your calculations.
I am not knowledgeable about combining foreign pensions with the Irish one. Some other posters might respond to this.
Apart from trying to maximise your possible pensions, you also have an opportunity to qualify for Benefit payment 65.
Read through all the other threads I have linked and also this one.
Can a retired PAYE worker use class S contributions to qualify for Benefit Payment 65.
The following is based on my reading of the rules of BP65SE, so it may or may not be possible. If a PAYE worker has taken early retirement and has ARF drawdowns over 5k per year they will get 52 class S contributions per year. If this person doesn't meet the class A rules in their governing...
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As things stand, yes, but with a plan they can qualify for a portion of the Irish COAP.
They could reach approximately 13+ years of Prsi contributions at age 70. This would allow a COAP of approximately €120 per week. It would be well worthwhile losing €400 per year to gain this.
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