Should I buy years or contribute to an AVC/PRSA?

sidzer said:

Any steer on this would be much appreciated.

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I don't know the answer.

It was always my understanding that the purchase of notional years did not count towards the Supplementary. Class As pay towards two different pensions, which are coordinated - the Occupational Pension and the State Pension (via PRSI). If someone retires after normal retirement age with 30 years service they get 30 years worth of Occupational Pension. If they do not also qualify for 30 years worth of the State Pension ("through no fault of their own") and they are not working elsewhere they can apply for a Supplementary Pension to equal value, ie, their Supplementary will be 30/40 of the State Pension. If this same person had bought 10 notional years they would add to their Occupational Pension proportionally. But they have not paid 10 additional years of PRSI (or equivalent) and therefore the Supplementary pension remains at 30/40 of the State Pension.

As I say, that was always my understanding (and one reason I preferred AVCs for myself). However, since someone recently pointed to the Dept of Ed Modeller indicating something different I just don't know any more. And, on the other hand, some other poster has referred to getting a similar steer to your self from their employment office.

sidzer said:

If my supplementary pension was not accruing by the NSP scheme then my pension will be reduced -

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That’s my understanding, I saw it called out in a DoE circular that you should google. In my case 10 years NSP accrue by age 65, so if I go between age 60 and 65 I won’t accrue supp pension on my NSP, which is quite annoying.
I will though have 2080 prsi stamps at age 60.3 yrs, but that doesn’t mean anything until I draw the contributory pension.

in my case, I retired from a Technological University at aged 60, (Minimum retirement age 60) last October. In my case the supplementary pension was only calculated based on my earned service, my purchased service, about 5 years was excluded from the calculation. So my experience would be the same as outlined by @Nordkapp and @Ruffian in the previous two posts.

Just to update this @Ruffian and @november16


I noticed an increase in my pension when the recent pay rise was added, when I checked the payslip, the amount of the supplementary pension increased more than expected. When I queried this, our pensions administrator checked with the NSSO who process the payment.

They compared me with a D class retiree and paid me the difference.

I went back and checked the circular see below. Quote from Circular in Italics

9. Calculation of an OSP
Where the integrated Occupational Pension payable to an individual, combined with the SPC or other Relevant Benefits payable, is less than the equivalent non-integrated Occupational Pension notionally calculated, an OSPmay be payable subject to meeting the relevant criteria (see Section 4 above).

The OSP is calculated as the difference between:
a) the total of the combined integrated Occupational Pension and the SPC (or other Relevant Benefits) actually payable to the pensioner, and
b) the equivalent non-integrated Occupational Pension notionally calculated (i.e. the Occupational Pension the pensioner would have received on retirement if it had not been integrated with the social insurance system).

The amount of OSP payable is arrived at by the following formula:

OSP = A – (B + C)
where:-
A is the amount of Occupational Pension which would have been payable if the Occupational Pension had not been integrated (as per Section 8.1);
B is the amount of Occupational Pension actually payable (as per Section 8.2) to the former member, and
C is the amount of the Relevant Benefits (s) in payment, where appropriate, to the former member, subject to the OSP rate payable not exceeding the Max SPC.

So it looks like they are not treating earned and purchased service differently WRT OSP, and my previous post and the initial calculation was incorrect.