Key Post The Single Public Service Pension Scheme

Ent319 said:
Hi Charlie - I think revenue might have tweaked the capitalisation factors since I did the equations initially (or maybe I did some rounding).

To work out Jimmy's DB pension limit you would take Jimmy's salary (€75,000), multiply 2/3 and then multiply by 19.6. So:

75,000 * 2/3 * 19.6 = €980,000

Then to work out the shortfall it's this amount minus the result of the following equation in section 6.3:

(Gross Salary / 2) - State Pension = X
X * 0.025 * (Years to work till NRA) * (Scheme Factor) = Value of referable Pension
(Gross Salary) * 0.0375 * (Years to work till NRA) * Scheme Factor = Value of Lump Sum
Value of Pension at NRA = Value of referable pension + Value of Lump sum

You would then add the value of any existing pension benefits.

So using 25 as the Scheme Factor (for simplicity's sake - in reality this would be about 23.4) and an assumed state pension of €14,500:

75,000 / 2 – 14500 = 23000
23000 * 0.025 * 20 * 25 = 287500
75000 * 0.0375 * 20 = 56250
287500+56250 = €343750
€980,000 - €343750 = Approx AVC Shortfall = €636250

Jimmy's salary would increase substantially over the twenty years he's a public servant and he might get married so in reality this is probably a big underestimation.
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Hi @Ent319 I've been trying to work this out and hoping I understand this correctly. I've put in my own details. I've got 29 years to go before hitting 66.

Figures are based on my current salary but maybe I should have used what I’ll likely end up on at the top of the scale. Can’t account for future pay deals of course.

84,475/2 - 14,500 = 27,737.50
27,737.50 * 0.025 * 29 * 25 = 502,742
84,475 * 0.0375 * 29 = 91,866

Value of Pension at NRA
502,742 + 91,866 = 594,608

Pension Capitalisation
84,475 * 0.66 * 19.6 = 1,092,768

Benefits as per my 2024 statement is 16,153 lump sum and 2,828 referable amounts and I multiply that by 25?

2828 * 25 = 70,700 + 16,153 = 86,853

So my AVC shortfall would be 1,092,768 - 594,608 + 86,853 = 585,013

Does this mean that I can only have this amount in my AVC pot and any amount over that may be subject to tax?

How does my lump sum above interact with the 200k? Am I limited to the 91,866 as my maximum allowable lump sum and can't take any other lump sum from the AVC? Or is it 1.5x my final salary but i'm still limited to that?

I wish I knew all of this before setting up my AVCs back when I started. I've been dumped into their adventurous fund I think through cornmarket. I've emailed them asking what my options are to switch to some of the other options. In your case when you get closer to retirement do you just send them the form and change the fund % to something less risky?

Thanks so much for this post it's been really enlightening.
 
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tripkaedama said:
emailed them asking what my options are to switch to some of the other options. In your case when you get closer to retirement do you just send them the form and change the fund % to something less risky?
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Policyholder of PRSAs and AVCs are typically allowed to switch funds whenever they like, although there is typically a limit on free switches per year.
 
Looking for an interesting post from a few years ago on this or another SPSPS thread. It compared the scheme to the pre 2013 scheme in a table format and found that with higher average career earnings public servants might actually be better off on the SPSPS.

I can't for the life of me locate it though!
 
Hi folks - going to do a revision of the OP soonish:
  • Tax brackets have changed so some of the number are out of date.
  • The landscape for making AVCs as a Public Servant in Ireland has changed for the better since this was first posted. OneQuote and others are now there etc.... so going to make some of the discussion under section 5 more general rather than focusing on dichotomy between corn market / other options and the issue of funds available under Cornmarket (Cornmarket might still be a very good route if index funds available to you have low base AMCs).
  • Feel like sections 5-7 could be simplified significantly - less focus on numbers and more a focus on underlying principles (you've very unlikely to overfund on the single scheme).
  • Overall I think a greater steer towards financial advisors and / or asking specific questions on this board may be helpful to consider individual circumstances. We also have ChatGPT / Claude now, which is of some assistance on this kind of stuff.
  • Might ask for thread to be tidied up.
Let me know if you want me to consider anything else.
 
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Great post @Ent319 , it has been most helpful while reviewing my nephews second Annual Benefit Statement, which we still cannot figure out how his LA employer is deriving at the amounts listed for his once off retirement lump sum and annual retirement pension, but can agree with his total contributions for the two years of his employment, but he has since reached out to his HR to get clarification, and hoping this gets sorted.
Meanwhile, I noticed tonight on Gov.ie the following 2 Circulars, to be effective 1st January 2027, which may need to be updated on your excellent workings above, re #4 (Points 8 & 9)
 
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