Will State Pension ever go completely?

How does this operate in practice?

If an individual paying Class D PRSI has another employment (private sector)
People who pay modified rate Prsi class B or D (and possibly class C and H) are blocked from gaining Reckonable contributions from any other sources.

If they have an extra private sector employment they are liable to class J on this.
Class J is not reckonable and only covers occupational injuries.

If they have any self employment they are liable to class K on this.
Class K has no benefits, but they are charged the same rate of Prsi as applies to class S.

It's only when they cease the modified rate employment that they can start to receive Reckonable Prsi contributions.

Immediately after their modified rate employment ceases they begin to get the reckonable Prsi.

If for instance they retired and had 30 modified contributions, they could get 22 reckonable contributions for the remainder of that year.

They would be changed from class J to class A or from class K to class S.

This is theoretically how it should work.

In practice it might not be a simple as this.

If the modified Prsi worker did not inform their other private sector employer of their situation the employer would operate the class A Prsi system.

If this was class A0 the employee would be zero rated and probably wouldn't be aware that the wrong Prsi class was being applied. The employer could be needlessly paying a much larger rate of employers Prsi.

However even though class A Prsi might have been paid, no Reckonable Prsi contributions would be added to the persons Prsi record.

I don't know if DSP would alert the employer about their over payments.

If they have other self employment, I think that this would automatically be charged at class K when they submitt their tax return.

On a slightly different note.

My wife who is claiming the COAP and is now class M Prsi, did some PAYE employment last year. This should have been liable to class J. However the employer was not informed and applied and paid class A. This class A Prsi appears on her Prsi record but is not reckonable.

I noticed this and got her to inform her employer and the correct class J is now applied.

Most people are unaware of all these Prsi rules. If I had not noticed this, the incorrect class A would probably still be operated by her employer.
 
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.
There are PRSA AVC options available to public sector workers other than Cornmarket or IPF.

Where there is scope to build an AVC fund the benefits of doing so will still greatly outweigh any fees incurred simply because of the available tax relief on contributions and tax free growth.

If a mortgage still needs to be cleared it might be wiser to do that first depending on several factors.
 
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?
From 4% to 4.7% on 1st Oct 2028
Increases:
2024: 0.1 percentage points
2025: 0.1 percentage points
2026: 0.15 percentage points
2027: 0.15 percentage points
2028: 0.2 percentage points
 
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