PRSI Pre 95/Post 95

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lou2

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Hi, I have read one other related post on this site but it doesn't answer my question. Can anyone tell me which is the best PRSI scheme to be in i.e. Pre 95 (D) or post 95 (A). I am one of the only pre '95 people in my job, the remaining being post '95 (A). They seem to earn a higher salary but obviously pay more PRSI. Whereas I earn less than they do (for the same job) but pay less PRSI (my employer makes up the rest). So what is actually the 'best' scheme to be on? Pre '95 or Post '95? I obviously didn't have a choice re which scheme I am in but would be very curious to know which is considered the better one to be in.
 
As a pre 95 employee on reduced PRSI , you are not entitled to unemployment benefit, optical benefits and dental benefits. You are not entitled to a State pension, but have a slightly better public pension than your post-1995 colleagues.

Recently the above benefits entitlement has been reduced anyway , so nothing to gain there .

Surely though you should have had the choice of paying full prsi or reduced amount .

Was it your choice to opt for D ?
 
No, it wasn't a choice. I was on scheme D from the day I was employed.
 
lou2 said:
Hi, I have read one other related post on this site but it doesn't answer my question. Can anyone tell me which is the best PRSI scheme to be in i.e. Pre 95 (D) or post 95 (A).

In terms of pensions - they should give the same benefits.

I am one of the only pre '95 people in my job, the remaining being post '95 (A). They seem to earn a higher salary but obviously pay more PRSI.

Yes, they pay 4% PRSI.

Whereas I earn less than they do (for the same job) but pay less PRSI (my employer makes up the rest).

Correct, you pay 0.9% PRSI.

Incorrect, your employer pays the same as any employer, 10.75% of salary.


So what is actually the 'best' scheme to be on? Pre '95 or Post '95? I obviously didn't have a choice re which scheme I am in but would be very curious to know which is considered the better one to be in.
Click to expand...

I'll follow this with a worked out example of the two pensions.
 
Pre 95: low-rate PRSI 0.9%, salary 50k.

You pay superannuation, over your 40 years service and get 25k pension.


Post-95: full-rate PRSI 4%

You have an integrated pension, so you will get a CSP, let's assume that is 12k, plus an occupational pension.

Occupational pension = (40 yrs)(1/80 pa) (50k - 2* CSP)

= (40/80)(50k - 2(12k)) = (1/2) (26k) = 13k.

So you get 12k + 13k = 25k, assuming 40 yrs service.

Same as the pre-95 person.
 
Thanks Protocol for clearing that up for me. You are correct about my employer not making up my PRSI. That's my error. However, they do make a much larger pension contribution than they do for my colleagues. Is this correct? Is this how it all comes out the same at the end of the day?
 
Wouldn't a post-95 employee get a larger lump sum on retirement, as the lump sums are based on final salary?
 
I never thought of that but I would certainly be interested in hearing the answer if anyone has it?
 
lou2 said:
Thanks Protocol for clearing that up for me. You are correct about my employer not making up my PRSI. That's my error. However, they do make a much larger pension contribution than they do for my colleagues. Is this correct? Is this how it all comes out the same at the end of the day?
Click to expand...

Assuming you are a public servant, there is no pension cont made by the State as it is a PAYG scheme.
 
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