What thresholds?
If that includes the SFT then that has been increased and continues to be increased over the next few years.
Will State Pension ever go completely?
- Thread starter EvenStevens
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If that includes the SFT then that has been increased and continues to be increased over the next few years.
My mistake. The first €200K increase to €2.2M only kicks in next year.
What do you mean? It'll increase by €200K p.a. during 2026-2029 at which point it will be €2.8M.
Edit: oh - you mean that these are still just proposals? I thought that they were legislated for already via the Budget 2025 Finance Act?
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Meaning not having a fund in excess of that allowed by Revenue rules, based on your final remuneration and length of service
It's one of the other, you can't do both
No, non-pension lump sums are taxed under PAYE
Inflation is allowed for in the calculation of final remuneration which is based on your salary, so inflation is taken into account when considering over funding
Steven Barrett
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They're not that clued in if they believe that PRSI is actually a contribution to their State pension. It is just a tax that goes into the pot along with income tax and USC. The State pension is a benefit, it is not an entitlement.
Going back to the OP, no I don't think it will be done away with. It would be political suicide. The retirement age was supposed to be increased in 2020...which turned out to be an election year and that was the end of that. But something needs to be done. Raising the age is easiest way although it will hit the lower paid harder as they won't be able to afford private pensions (auto enrollment won't help in its current format as retirement age is linked to the payment of the State pension). The alternative is raising taxes to pay for it. At a time when tax payers are increasingly paying more and more for the benefits of pensioners, it won't be something that will go down well (all political parties are the same on protecting benefits for pensioners).
I wrote an article in 2021 on the The Pension Commission Report. It's frightening how nothing has been done to address the issue. It's as if politicians don't care about the future, just the next election cycle
The Pension Commission Report
The small increases to PRSI seem to have passed largely uncommented on
AAAContributor
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How does this operate in practice?
If an individual paying Class D PRSI has another employment (private sector), are you saying that:
1. They pay Class A PRSI @ 4.1% on their private sector earnings and their employer pays 11.15% Employer's PRSI, yet the individual gets no reckonable contributions from this employment (i.e. their social insurance record contains '52 D' and '52 A' for the year but 0 in the 'Reckonable' column), or
2. They pay PRSI @ Class D rates (which is lower than Class A rates) on their private sector earnings also and get no reckonable contributions, or
3. None of the above, and I'm misunderstanding what you are saying?
How would it work in the case of self employed income?
If you have, for instance, a medical consultant paying Class D PRSI on their HSE earnings, but also had private practice income, would they not pay Class S PRSI on the private practice income which would bestow reckonable contributions for the State Pension?
If there are a combination of Class D and Class S contributions on a Social Insurance Record for the same year, do the Class S contributions become redundant somehow (or convert similar to when Class S contributions convert to Class K if there is unearned income in the presence of even 1 Class A contribution in the same year)?
BIG-notorious
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The lower paid jobs are also more likely to be physical jobs. It's going to be a lot harder to stack shelves in a supermarket or wait tables etc at 70 than at 65.
You also left out the other solution: increasing the proportion of workers to retirees. Leaving aside the large immigration element (which will have to continue to be a large part of the solution unless we want our health system in particular- but also other industries- to collapse as we retire) that means enabling much higher female participation rates in the workforce through higher levels of childcare availability. It also requires making physical jobs less physical through appropriate use of tools- eg trolleys which can be raised & lowered for stacking shelves in the supermarket instead of carrying everything, and other tools to make it easier to get concrete blocks etc around and in position the building site.
Just to be clear, there is an actual Social Insiurance Fund, into which are paid both EE and ER PRSI contributions.
But, yes, money is fungible, and in the past the State has topped-up this fund, and taken from it at other times.
I believe EE PRSI is due to rise by 0.1% per annum.
It has already increased from 4% to 4.1%.
4.1% from October 1st 2024.
4.2% from October 1st 2025
Not sure if that 0.1% increase continues for a few more years thereafter?
Or does this mean the next increase will be to 4.4% in 2028?
EvenStevens
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I spoke with my Pensions department to get some clarity. In my case I have to work til 65 on the scheme I’m on and to take early retirement I wouldn’t qualify for the supplementary pension that earlier entrants on D class PRSI would get between early retirement and state pension kicking in so I suppose from that point of view if I wanted to go earlier AVCs would make life more comfortable between say retiring at 60 until the State Contributory pension kicks in at 66. To go early I would be on very little without them. I fall into the bracket that is post April 2004 but pre 2013
Back to the issue of whether AVCs are worth it assuming full service. If you are putting in on income at 40% tax and taking out after retirement and paying 20% tax. How much of that 20% would be taken by broker fees? All and more probably if you go with Cornmarket or IPF.
Or would putting the money into an investment fund/ deposit account , paying off mortgage sooner be a better option?
Or would putting the money into an investment fund/ deposit account , paying off mortgage sooner be a better option?
I would imagine that the number of public and civil servants affected by the SFT is very small compared to the numbers employed.Exceeding the SFT and being subject to CET?
And they would certainly have the funds and financial nous to get professional advice on the matter
Wasn't the increase largely driven by senior public servants impacted by the €2M (€2.15M effective) SFT?
Pension tax relief rises to cover pots of up to €2.8m by 2029 under Cabinet plans
Limit had caused problems for filling senior Garda and civil service roles