Using my matured SSIA ( up to €7.5k?) to buy back years in my pension.

M

Mayo1969

Registered User
Messages
68
I'm thinking of using the bulk of my matured SSIA (Up to the allowable €7.5k?) to buy back time in my state pension.

Just wondering is this the best form of reinvestment of the proceeds which will turn out at just under €8k (I'll blow the remaining few hundred on "luxury items"!).

I appreciate this is a longer term investment than re investing in regular savings or other such financial schemes but would appreciate any thoughs on pros or cons vis a vis regular investment.
 
Re: SSIA Pension Investment

pjordan said:
...to buy back time in my state pension.....
Click to expand...

Hi PJ,

I might be wrong here but I assume you are in a Public Sector Superannuation Scheme and that you are proposing to buy back time in that scheme with the proceeds of your SSIA. Is my understanding correct?

Generally the "state pension" referrs to either the Contributory Old Age Pension or the non contributory old age pension. I think the names have changed recently.

aj
 
Re: Using my matured SSIA ( up to €7.5k?) to buy back years in my pension.

That is correct aj. Sorry about the confusion with the terminology.
 
P Jordan,

How many years are you buying back? It is generally the best way to improve your public service pension (as against AVCs) - buying the years outright is good as well.

Wolfspeed
 
Re: Using my matured SSIA ( up to €7.5k?) to buy back years in my pension.

Intend buying as much as I can with my SSIA reinvestment but need to buy back about 5 years (I think?)
 
Re: Using my matured SSIA ( up to €7.5k?) to buy back years in my pension.

I've gotten a quote from my HR dept telling me that it'll cost me about €8900 to buy a single year of my Notional Service which seems a bit steep to me.

I also have an AVC and wondering would I be better off putting my SSIA money in this instead?
 
Re: Using my matured SSIA ( up to €7.5k?) to buy back years in my pension.

I'm currently buying back just under five years' notional service by regular contribution under the D/Finance scheme - while I looked into AVCs, I was concerned about the transferrability and they were a little more expensive. The lump sum looked rather attractive (since it would then apply irrespective of future promotions, etc), but doesn't suit at the moment. The main attraction of the Finance scheme versus AVCs is that although the Finance scheme is supposed to be self financing, it does guarantee a link to final salary, whereas with AVCs you've got more risk. And the €8900 should be tax deductible, I think, which will make it look a lot more appealing.

My conclusion was that lump-sum buy-back works out best through the finance scheme, particularly if you feel you have good future promotional prospects - but I didn't spend a huge amount of time on the lump sum option.

I'd suggest asking your AVC providers to run some calculations and see what a year's buy-back equivalent would be, and to find out what their assumptions are in terms of promotion and final salary in doing their sums.
 
Re: Using my matured SSIA ( up to €7.5k?) to buy back years in my pension.

Sorry, but could somebody explain what exactly this means .... "buying back"?? "Notional"?? Perhaps I'm very ignorant, but I don't know anything about this. Are we talking about a personal pension, the old age pension, or what exactly? How does one "buy back"??
 
Re: Using my matured SSIA ( up to €7.5k?) to buy back years in my pension.

This thread relates to Public Service pensions, e.g. Civil Servants, Teachers, Gardai etc. Such State employees are members of pension schemes that provide a pension at retirement, commonly 1/80th of final pensionable salary for each year of service, to a maximum of 40/80ths at 40 years service. If a Public Servant will not have 40 years' service by the time they retire, they may be able to invest extra money in the scheme to "buy back" years for the purposes of calculating their pension.

Liam D. Ferguson
www.ferga.com
 
You must log in or register to reply here.
Back
Top