SPSPS and low earnings

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cremeegg

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I joined the PS 5 years ago and work part time. I have 9 years to go to retirement. Over the 14 years i expect to contribute in the region of €25,000 to the pension scheme.

I estimate my PS pension will be 14/40 of my salary. That is just less than the OAP.

I understand the PS pension is paid less the OAP. Does this mean I will get nothing for my contributions.
 
Your 14 years on the SPSPS will count for at most just 14/40 of the OAP/State Pension - so in today's terms €92.85 pw or €4828.46 pa. That is if you are getting a PRSI "stamp" every week for your part-time work. 52 Class As per year. You should check to confirm this. Certain part-time work patterns could count against this.

That is not saying that you will only receive €4828 pa in OAP/State Pension. Your entitlement is calculated by the DSP based on your total PRSI record. It is irrelevant to them if some of this record, all of this record, or none of this record results from public sector employment. So you may get the full State Pension if your total record is sufficient.

You have been in the PS for 5 years and have 9 years to go until retirement. That is 14 years altogether - but it is part-time. I have no idea how you get the 14/40 figure for your PS pension calculation. What you could do is calculate how many whole time equivalent years you should have at retirement. For example, if you are working half-time it would be 7 years. Then work out what is the whole time equivalent salary for the position (eg, if you are on €24k for half time work then the WTE salary is €48K pa.).

Lets just say your wte salary is €48,000 and you will have 7 years full time service at retirement. Then you could get a very crude estimate of PS pension by this formula: (€48,000 * 7/80) - (Full Rate State Pension * 7/40) = €1,786 pa. Your lump sum would be separate.
The SPSPS pension is based on career average earnings. You would be using your current wte salary as a proxy for this.

I would emphasize the crudeness of this method and your actual pension will not be calculated in this way.
 
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I should have a full entitlement to a contributory OAP based on PRSI contributions I have paid over the years, and I am continuing to pay PRSI

My question is will I get any benefit from the Public Services pension contributions I am paying at the moment.

I guesstimate that my PS pension will be less than the state pension, so that after that is deducted, do I get nothing more.

My understanding is that the fact that I am working part time is irrelevant I pay pension contributions and PRSI based on my earnings. I get 52 class A stamps every year.
 
cremeegg said:
I guesstimate that my PS pension will be less than the state pension, so that after that is deducted, do I get nothing more.
Click to expand...
Your PS pension is not deducted from your State Pension (no matter how much or how little your State Pension should turn out to be awarded). The PS pension is done by a separate computation. Yes, you will get a benefit from the PS contributions you are paying at the moment (At the very least you will get the lump sum). I can't even guess how much as you do not give enough information.

For a rough indication of how much just follow the steps I suggested:

A1. Work out how much whole-time equivalent service you should have at retirement (lets say 7 years).
A2. Work out your current whole time equivalent salary ( Lets say you are currently getting €24,000 for working half-time. Then you whole time equivalent salary is €48,000).
A3. Divide your WTE salary by 80 and then multiply this by your whole time equivalent years at retirement ( eg, €48,000 *7/80 = €4,200).

B1. Now take the current full State Pension rate (€13,795). Divide it by 40 which gives €344.90. Multiply this by your whole time equivalent service at retirement. (In my example this is 7 years so we get €344.90 * 7 = €2414).

Now substract B1 from A3. In my example this is €4200 - €2414 = €1,786.

So a person on a whole time equivalent career average salary of €48,000 and who will have 7 years whole time equivalent service at retirement should very roughly be looking towards a Public Service pension of €1,786 pa. (This could be 14 years half time at €24,000 pa).
This €1,786 PS pension is separate from, and in addition to, whatever State Pension he qualifies for from the DSP. The PS lump sum is also additional.

You can put your own figures into this formula to get your own rough estimate. I suggest you use your current whole time equivalent salary - instead of trying to estimate your career average salary.
Or if you want to put up your details of current earnings and work pattern I will give it a go.

If your whole time equivalent salary is less than twice the full State Contributory Pension (ie, currently €27,590) then your PS contributions may essentially only qualify for the lump sum ?? Not much more anyway.
 
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The calculations on this thread will give reasonable approximations for annual salaries of about 30k up but will be further and further off for people on lower incomes. How the single scheme is actually calculated is explained on pages 16 to 23 of this leaflet: https://singlepensionscheme.gov.ie/wp-content/uploads/2017/12/Scheme-Booklet.pdf .

Assuming that your part time earnings are less than 3.74 times the old age pension (approximately 50k per year), you will earn a pension benefit of 0.58% of your salary every year. For the example further up of someone earning 24k a year, the pension benefit each year will be:
24000 x 0.58% = €139.20. 14 years of that* will give a final pension of €1,948.80 per year.

*the total is increased by the CPI every year before adding on that year's benefit so you can consider the amount here to be in today's euros maybe.
 
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