SPSPS and effect of part time work

T

Tadhg22

Registered User
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Hi all,

Prior to taking up a full time job in the public sector in 2018 I did some part time work for about a month in 2017. Therefore, my date of entry to the SPSPS is in 2017.

Will this have the effect of lowering my pension at retirement because it will decrease my career average earnings?
 
Tadhg22 said:
Hi all,

Prior to taking up a full time job in the public sector in 2018 I did some part time work for about a month in 2017. Therefore, my date of entry to the SPSPS is in 2017.

Will this have the effect of lowering my pension at retirement because it will decrease my career average earnings?
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No, it doesn't work the way you think it does. For each year of earnings, you gain entitlement to a bit of a lump sum and a bit of an annuity on retirement. The fact that you worked a part time little bit earlier cannot make you worse off than had you not work that earlier period. The average references the fact that your previously earned benefits, i.e. at the start of your career are not up rated to reflect your final salary.
 
Markel said:
No, it doesn't work the way you think it does. For each year of earnings, you gain entitlement to a bit of a lump sum and a bit of an annuity on retirement. The fact that you worked a part time little bit earlier cannot make you worse off than had you not work that earlier period. The average references the fact that your previously earned benefits, i.e. at the start of your career are not up rated to reflect your final salary.
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Unless I've completely misunderstood my scheme!
 
Thank you Markel, that would make sense. Does anyone know of a formula I could use to calculate my expected pension under this scheme? I know there's a modelling tool but I would like to figure it out myself if possible.
 
Tadhg22 said:
Thank you Markel, that would make sense. Does anyone know of a formula I could use to calculate my expected pension under this scheme? I know there's a modelling tool but I would like to figure it out myself if possible.
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Anyone have any ideas about this please?
 
Tadhg22 said:
Does anyone know of a formula I could use to calculate my expected pension under this scheme? I know there's a modelling tool but I would like to figure it out myself if possible
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As it is based on career average earnings you it is very difficult to estimate (I haven't tried the official estimator tool). If you are prepared to make a guesstimate of your career average salary (in today's terms and taking account of reasonably expected increments, etc) you can make a very rough and ready estimate using this formula (CASalary*SERVICE/80) - (State Pension*SERVICE/40).
Lets say you estimate your career average salary as €50,000 and your anticipated service at normal retirement age is 35 years. Then the rough estimate is (50,000*35/80) - (13,000*35/40) = €21,875 - €11,375 =€10,500. This is excluding your State Pension, which should be a minimum of €11,375 and may be a full pension if you can bring your full record up to 40 years.
I would emphasise that this is very much rough and ready. At retirement your pension will be calculated on the basis of your yearly "referrable amounts" and not a notional "career average salary".
 
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Thank you for that early riser, I am grateful.

I wonder if anyone has used the data on the annual pension benefit statement to derive a formula for estimating this?
 
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