Pro rata pension? Private sector 23 years joined civil service 2019 & worked in UK!

Jano

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Would appreciate info re planning for our pensions. A lot being asked I know but any light that anyone can shine will be hugely appreciated!
My husband and I are both 50.

Husband has 10 years of NI contributions in the UK straight from school in Ireland, followed by 23 years paying full rate A class PRSI in the private sector in Ireland. He began a new job last year in the civil service, still paying A rate PRSI. Assuming he retires at 67, he will have 17 years of civil service pension contributions. Single pension scheme includes State Contributory OAP in this pension payment? As he meets the conditions for a full State COAP already, how will this work for him? Will he get 23/40 of a state pension for his private sector employment and the other 17/40 included in his civil service pension? The info below from Citizen's Information refers to mixed insurance rates which is not his case and so has us confused:

If you meet all these conditions, you may qualify for a pension proportionate to the number of contributions that you paid at the full rate. For example, if you worked for 40 years and 10 of those years were in the private sector, you would get one-quarter of the full pension.

I am a public servant for the past 24 years in Ireland and have 8 years of NI contributions in the UK, only 2 years of PRSI in the private sector in Ireland. We are trying to decide if we should pay for gaps in our NI from 2006-2016 which is allowed until April 2023 but at current rates. Approx cost for 10 years is GBP 7000 each at Class 3 rates. Normally one can only go back 6 years, this is a once-off concession due to changes in their pension rules. We are trying to establish if we have to pay Class 3 or if we might be entitled to pay Class 2 which is a total of approx GBP 1800.

Husband has €47000 sitting in a private pension fund administered by a previous employer and has to decide how to proceed with that now as he never completed his Leaving Service Options form 12 years ago!! I have AVC's worth €34000 as I might buy notional service as I started late.

Maybe we need a financial advisor! Thanks so much for any insights anyone may have.
 
Husband has 10 years of NI contributions in the UK straight from school in Ireland, followed by 23 years paying full rate A class PRSI in the private sector in Ireland. He began a new job last year in the civil service, still paying A rate PRSI. Assuming he retires at 67, he will have 17 years of civil service pension contributions. Single pension scheme includes State Contributory OAP in this pension payment? As he meets the conditions for a full State COAP already, how will this work for him? Will he get 23/40 of a state pension for his private sector employment and the other 17/40 included in his civil service pension? The info below from Citizen's Information refers to mixed insurance rates which is not his case and so has us confused:

It would seem that your husband can expect to have 40 years of Class A PRSI at retirement. Based on the expected new eligibility criteria, he can expect to qualify for a full rate State Pension at retirement. Even by the old criteria he should still qualify for the full rate, based on the above. It is irrelevant whether those contributions relate to public sector employment or the private sector. (By the way, if he is 50 now I think his normal retirement age in the Single Scheme is 68).
Your husband's occupational pension from the Single Scheme will be calculated seperately based on his career-average earnings in the civil service. I have never used the Single Scheme Estimator Tool but maybe he may find it useful : https://singlepensionscheme.gov.ie/for-members/scheme-information/single-scheme-estimator-tool/

As you suggest in your post, the info relating to a mixed insurance record is irrelevent to your husband's circumstances - and to yours, if all your PRSI is at Class A. If you expect to have 40 years at full rate PRSI (some of which may be credited) you can expect to qualify for a full Irish State Pension under the proposed criteria. Under the old criteria, it might make if a difference if your two years in the private sector were immidiately before you public sector post or came before your NI post. (I am taking it that your public service post is post-1995 and at Class A PRSI?)

In addition to the above, you both may have some UK eligibility but I don't know anything about this.
 
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I am a public servant for the past 24 years in Ireland
My husband and I are both 50.

If you are Class A PRSI public servant then your Occupational Pension is also coordinated, like your husband's. So lets say for simplicity that your pensionable salary is €80,000 and you continue working until you have 40 years service. Then your Occ Pension is roughly (€80,000 * 40/80) - State Pension = €40,000 - €13,000 = €27,000. So at State pension age you would be eligible for two pensions, the Occ Pension from your former employer (€27,000) and your State Pension from DEASP.

Now lets say that someone on the same salary had only 18 years public sector service but, like you and your husband, at retirement had 40 years of Class A PRSI contributions. The Occ Pension rough estimate would be (€80,000 * 18/80) - (State Pension * 18/40) = €18,000 - €5850 = €12,150. So at State Pension Age this person would receive an Occ Pension from their fromer employer of €12,150. They would also be eligible for the full State Pension of €13K. The State Pension is based on their total PRSI history, public and private sector.

It sounds like your husband is likely to be in a similar situation to this second example - only that it is harder to work out his pension entitlement because he is in the Single Scheme and it is based on career average earnings rather than final salary, as in these examples.
 
If you are Class A PRSI public servant then your Occupational Pension is also coordinated, like your husband's. So lets say for simplicity that your pensionable salary is €80,000 and you continue working until you have 40 years service. Then your Occ Pension is roughly (€80,000 * 40/80) - State Pension = €40,000 - €13,000 = €27,000. So at State pension age you would be eligible for two pensions, the Occ Pension from your former employer (€27,000) and your State Pension from DEASP.

Now lets say that someone on the same salary had only 18 years public sector service but, like you and your husband, at retirement had 40 years of Class A PRSI contributions. The Occ Pension rough estimate would be (€80,000 * 18/80) - (State Pension * 18/40) = €18,000 - €5850 = €12,150. So at State Pension Age this person would receive an Occ Pension from their fromer employer of €12,150. They would also be eligible for the full State Pension of €13K. The State Pension is based on their total PRSI history, public and private sector.

It sounds like your husband is likely to be in a similar situation to this second example - only that it is harder to work out his pension entitlement because he is in the Single Scheme and it is based on career average earnings rather than final salary, as in these examples.
Thanks Earlyriser, it is that pro-rata element of the state pension I was unsure of for my husband's Occ pension. The Single Scheme calculator suggests they would but I figure it is for a typical employee and not one with so many private sector contributions. It makes sense that the deduction from Occ Pension for state pension would be pro rata as you outline.
 
Thanks Earlyriser, it is that pro-rata element of the state pension I was unsure of for my husband's Occ pension. The Single Scheme calculator suggests they would but I figure it is for a typical employee and not one with so many private sector contributions. It makes sense that the deduction from Occ Pension for state pension would be pro rata as you outline.

You can work out a pension estimate manually using the following formula from the Single Scheme Handbook. It is more of a guesstimate than estimate as you have to work on the basis of career average earnings rather than final salary. Your husband would need to roughly estimate his career average salary in today’s terms to use this manual method.

“CSP threshold = 3.74 x current CSP rate x your pay frequency

1. 0.58% x your full-time gross pensionable remuneration up to the CSP Threshold x your % work pattern

2. plus (if applicable)1.25% x your full-time gross pensionable remuneration above the CSP Threshold x your % work pattern”


Here is an example based on a career average salary of €70,000 and 18 years service.

CSP threshold = 3.74 * €13,000 = €48,620

(0.58% * €48,620 * 18) = (€282 * 18) = € 5,076

(1.25% * €21,380 * 18) = (267.25 *18) = €4810

Pension after 18 years service with career average salary of €70.000 =

€4810 + € 5076 = €9,886

In this example, the pension figure is the Occupational Pension, paid by the employer. The employer assumes that the person will be eligible for a State Pension of at least 18/40, based on their PRSI record with them. But the actual calculation of the State Pension is handled by the DEASP. If the total PRSI record (public and private sector, employed and self -employed, paid and credited) meets the eligibility criteria for a full state pension, then that is what they are awarded.
 
@Early Riser

I was looking at the artithmetic and have a question. Is the only difference between "post-95 old" and Single Scheme the replacement of final value salary with career average for calculations?

Assume two people in both schemes had a career of 40 years with pay in every year or €50k. (I know this is impossible with increments, but just for the sake of argument). Would the pension of both people be the same?
 
Assume two people in both schemes had a career of 40 years with pay in every year or €50k. (I know this is impossible with increments, but just for the sake of argument). Would the pension of both people be the same?

The formulas are different. But, provided you adjust for career average earnings rather than final salary, the estimated final pension seems remarkably similar.

But there is another imponderable. The Consumer Price Index is used to adjust annual earnings (or accrual), and it is this that determines what the actual career average earnings figure will be. So it all depends on how reliable an indicator the CPI is of real world changes in costs. Doing predictive calculations is on the basis that it is reliable.
 
Thanks. The old system was very beneficial to someone who had a number of late-career promotions.

For people with flatter careers like teachers it shouldn't make as big a difference.


So it all depends on how reliable an indicator the CPI is of real world changes in costs.

Well that is exactly what the CPI is designed to do!
 
Would appreciate info re planning for our pensions. A lot being asked I know but any light that anyone can shine will be hugely appreciated!
My husband and I are both 50.

Husband has 10 years of NI contributions in the UK straight from school in Ireland, followed by 23 years paying full rate A class PRSI in the private sector in Ireland. He began a new job last year in the civil service, still paying A rate PRSI. Assuming he retires at 67, he will have 17 years of civil service pension contributions. Single pension scheme includes State Contributory OAP in this pension payment? As he meets the conditions for a full State COAP already, how will this work for him? Will he get 23/40 of a state pension for his private sector employment and the other 17/40 included in his civil service pension? The info below from Citizen's Information refers to mixed insurance rates which is not his case and so has us confused:

If you meet all these conditions, you may qualify for a pension proportionate to the number of contributions that you paid at the full rate. For example, if you worked for 40 years and 10 of those years were in the private sector, you would get one-quarter of the full pension.

I am a public servant for the past 24 years in Ireland and have 8 years of NI contributions in the UK, only 2 years of PRSI in the private sector in Ireland. We are trying to decide if we should pay for gaps in our NI from 2006-2016 which is allowed until April 2023 but at current rates. Approx cost for 10 years is GBP 7000 each at Class 3 rates. Normally one can only go back 6 years, this is a once-off concession due to changes in their pension rules. We are trying to establish if we have to pay Class 3 or if we might be entitled to pay Class 2 which is a total of approx GBP 1800.

Husband has €47000 sitting in a private pension fund administered by a previous employer and has to decide how to proceed with that now as he never completed his Leaving Service Options form 12 years ago!! I have AVC's worth €34000 as I might buy notional service as I started late.

Maybe we need a financial advisor! Thanks so much for any insights anyone may have.

With 8 qualifying years in the UK you should consider paying voluntary NI contributions from here to top up that entitlement.
 
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