PRSI Question

[sidzer]

Hi all,

I am a 53 yr old teacher and planning on early retirement over the next 3-4 years.

At age 50 I had 20 years teaching service and decided on Notional Purchase Service to make up @ 10 years at age 60 to have a full pension.

I will continue to pay this NPS until I retire.

If I retire age 56 I will not have the full PRSI contributions to get the full supplementary Pension at age 60.

I started working part time when I was 15 (1985-1987) and worked 24 hrs / week in a supermarket and paid PRSI. I then worked in Guinness for 6 years (1998-2004) full time until I went back to college full time from (1994-2000).

My question is would these PRSI payments count for pension credits?

Thanks - Sidzer

 

[NoRegretsCoyote]

I started working part time when I was 15 (1985-1987) and worked 24 hrs / week in a supermarket and paid PRSI. I then worked in Guinness for 6 years (1998-2004) full time until I went back to college full time from (1994-2000).

I presume this is 1988-1994? All of that employment would have seen you pay Class A PRSI which helps with pension entitlements .Do you have a statement of your record?

 

[Early Riser]

Your PRSI record (all of it) counts towards your State Pension - currently payable at 66. But I am not sure how you think it may be relevant towards the "the full Supplementary Pension at 60"?

If you are eligible for the Supplementary Pension it is not calculated by reference to your PRSI record. It is the difference between an uncoordinated pension for someone with the same pensionable service history, and the Occupational Pension you are actually awarded under your current scheme.

As an example, take someone retiring at normal pension age on a coordinated pension (Class A PRSI) after 30 years service on a salary of €80k. The Occupational Pension would be about €19,600. An uncoordinated pension would be €30,000 for the same service. So the Supplementary pension (if eligible) would be €10,400. This person might qualify for the full State Pension at 66 based on their total PRSI record and this would replace the Supplementary. That is where your "extra" PRSI may come into play.

 

[sidzer]

I presume this is 1988-1994? All of that employment would have seen you pay Class A PRSI which helps with pension entitlements .Do you have a statement of your record?

Thanks NoRegrets - it is 1988 - 1994! I don't have a statement of record but will look into it. Appreciate your answer

 

[NoRegretsCoyote]

I then worked in Guinness for 6 years (1998-2004)

What private pension rights (if any) do you have? If you can draw down from an ARF from 60 then you end up paying Class S PRSI which gets you 52 contributions a year which help you qualify for full state pension contributory at 66 if you are short. See here.

Rules are different for defined benefit pensions which I suspect you have if you worked for Guinness back then.

 

[sidzer]

Your PRSI record (all of it) counts towards your State Pension - currently payable at 66. But I am not sure how you think it may be relevant towards the "the full Supplementary Pension at 60"?

If you are eligible for the Supplementary Pension it is not calculated by reference to your PRSI record. It is the difference between an uncoordinated pension for someone with the same pensionable service history, and the Occupational Pension you are actually awarded under your current scheme.

As an example, take someone retiring at normal pension age on a coordinated pension (Class A PRSI) after 30 years service on a salary of €80k. The Occupational Pension would be about €19,600. An uncoordinated pension would be €30,000 for the same service. So the Supplementary pension (if eligible) would be €10,400. This person might qualify for the full State Pension at 66 based on their total PRSI record and this would replace the Supplementary. That is where your "extra" PRSI may come into play.

Thanks Early Riser - that was very helpful to help me understand how the supplementary pension works - I appreciate that. Sidzer

 

[sidzer]

What private pension rights (if any) do you have? If you can draw down from an ARF from 60 then you end up paying Class S PRSI which gets you 52 contributions a year which help you qualify for full state pension contributory at 66 if you are short. See here.

Rules are different for defined benefit pensions which I suspect you have if you worked for Guinness back then.

I have a DB pension from Guinness. It is payable when I reach 65 but I can draw it down via CNER. I enquired a few months ago and it was worth @ €7,200 / year if I took it at age 53 and is index linked with inflation. This will be an important addition if I take CNER in 3-4 years from the PS.
At 65 worth €12,500 / year. I also have approx. €22k in an AVC with Zurich (value at last statement) which I might bump up over the remaining years.
Thanks for that link above.
Sidzer

 

[NoRegretsCoyote]

I also have approx. €22k in an AVC with Zurich (value at last statement) which I might bump up over the remaining years.

Am far from the expert but it if you could get that AVC pot to say €50k and then draw down €5k a year from 56 to 66 then it both smooths your income and maxes your PRSI record.

This depends a bit on what your PRSI record looks like but on the face of it by 2025 you'd only have about 34 years full-rate PRSI paid out of the necessary 40.

When you get your PRSI record post it here and you'll get advice over whether you'll need to do more to get full SPC at 66 and, if so, what the best way of doing it is.

 

[sidzer]

Am far from the expert but it if you could get that AVC pot to say €50k and then draw down €5k a year from 56 to 66 then it both smooths your income and maxes your PRSI record.

This depends a bit on what your PRSI record looks like but on the face of it by 2025 you'd only have about 34 years full-rate PRSI paid out of the necessary 40.

When you get your PRSI record post it here and you'll get advice over whether you'll need to do more to get full SPC at 66 and, if so, what the best way of doing it is.

Thanks NoRegrets