PRSI ARF contribution class

[Bear Malone]

I am a pre 95 public servant retiring shortly. Prior to my joining the public service I have 8.5 years class A credits.
On retirement and after maximising my tax free lump sum I will have further funds to invest in an ARF. I am 58 years of age and I plan to withdraw 5k from the ARF each year until 66 to hopefully maximise my credits towards the state contributory pension.
My question is if I start the drawdown immediately on retirement will my ARF prsi credits be under class S as my most recent contributions have been at the modified rate and it has been suggested to me that because of this my contributions could result in class K credits only.
If class K was correct would I need a period of time earning class A credits before drawing from the AVC for class S credits.

 

[S class]

I am not sure what would happen in your year of retirement. You would have some modified Prsi contributions. I would imagine that S class would apply as ARFs are always S class.
For all years after your retirement year you will definitely get 52 S class provided you withdraw 5000 euro per year from your ARF. It might be better to delay starting your ARF until the first full year after retirement if you are in the 40% tax band for that year.
If you are in the 20% band in retirement year and have a large enough ARF to enable you to withdraw 5000 euro per year until age 66 then it would be worthwhile starting the ARF immediately on retirement in the off chance of getting S class for that year.
You don't need any A class Prsi.

 

[S class]

If you worked for one week at Class A and then signed on for A class credits immediately after you retire this would result in all your modified contributions for the retirement year and the previous year changing to A class credits.
This would improve your contributory pension entitlement.
Signing on for A class credits will not effect your entitlement to S class on the ARF.
In any year you can have S class and A class credits.
It can be advantageous to keep signing on for A class credits as they can help for qualification for 65s benefit. You would only need to work for 13 weeks to then qualify for the 65s benefit.

 

[Bear Malone]

If you worked for one week at Class A and then signed on for A class credits immediately after you retire this would result in all your modified contributions for the retirement year and the previous year changing to A class credits.
This would improve your contributory pension entitlement.
Signing on for A class credits will not effect your entitlement to S class on the ARF.
In any year you can have S class and A class credits.
It can be advantageous to keep signing on for A class credits as they can help for qualification for 65s benefit. You would only need to work for 13 weeks to then qualify for the 65s benefit.

Many thanks S class,
your clarification that S class applies to the credits in the years after the retirement year is the information I'm looking for.
I certainly will also look at your suggested option of some A class credits to change my modified contributions in my final Year+ service.