Semi State - PRSI Class A

C

Codogly

Registered User
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Hi
Our Defined Benefit Pension had a direct relationship to the value of the state pension in the calculations. I think it’s your final salary less twice the state pension x 40/80. Does this in effect mean that if the state pension were to increase €10 / week in the Budget 4% and at the same time say our wages only increased by say 2% our pension from the DB would be decreasing ?. If I understand it correctly it’s the mix that would be changing and not the overall value I.e. slightly more from the state pension and slightly less from the actual DB fund?.
One final question : if the above is correct does the converse also apply I.e. if the state pension went down would the DB Funds liability go up to maintain the overall pension value.
Hope that makes sense.
Thanks for any assistance
 
Simple answer is YES.
The intention is that the DB scheme will top up whatever the State Pension is, to 40/80ths (if you will have 40 years service).
 
Thanks Conan … any idea how things would work with this type of DB if in the future the government decided to means test the state pension ? …like it’s difficult to disqualify under means test rules somebody who’s pension is linked to the state pension ?
 
How long is a piece of string?
with all the proposals emanating from the Pensions Commission, future Governments have a lot of “pension” issues on their agenda. I doubt “means testing” is anywhere near the to
of a long list of issues.
 
I agree it’s very difficult to predict how things will evolve in the state pension issue.
It does unfortunately make it difficult to plan for retirement with this particular pension fund.
 
Unlikely they will means test the contributory state pension (would act as a disincentive to contributing to private pension).

Easiest way to reduce the net after tax income is to charge prsi usc etc on a lower income level. A State and private pension may bring you into the lower tax bracket anyway and the State gets revenue back in the form of income tax.

A semi State company while you are not a civil servant you are a public servant with the State as the only shareholder is liable for any underfunding of your pension.
 
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