Public Service Pension Calculator

djk1000

Thought this might be useful for any discussions of public service vs. private sector, its a calculator for arriving at public sector pension entitlements.

http://www.cspensions.gov.ie/calculators.asp

For instance, a 22 year old male, starting out in the civil service, with an average salary of €28,000 throughout their career, retiring at 65 would get a gratuity payment of €42000 on retirement and €5600 a year pension (plus old age contributory pension).

Assuming a life expectancy of 81 years, the total paid out would be €266,000, this is €6487.80 a year, every year for 41 years of work, or 23.17% of average salary.

Here is a private sector calculator,

https://www.irishlife.ie/secure/looking-to-the-future.jsp

Interestingly, if this person was in the private sector and had a private pension under investment, they wouldn't have to pay in anything like 23% of their salary to get the same retirement income.

This is just an example, I didn't factor inflation, it's just a useful tool when trying to compare public and private sector salaries.

muboop1

So your saying... A public Sector workers pension isn't better then that of a private sector worker?

For figures you input that is?

nkay1985

Is this calculator using the new pension scheme that was announced today? And, if so, does that not only affect new entrants into the public service?

hmmm

djk1000 wrote: »

For instance, a 22 year old male, starting out in the civil service, with an average salary of €28,000 throughout their career,

Yeah right, what % of the PS have an income as low as that all their life? 5%? 4%? Also, PS pensions are final salary pensions, not average salary.

Try plugging in a teacher or nurse who starts at close to 40k and will retire significantly higher.

BrownianMotion

Assuming an extremely generous 10% contribution towards their pension each year, this 22 year old will have contributed €114800 (41 * 2800) towards a pension pot of €266000 that you calculated. Is that a good deal for him do you think? (Hint €266000 > €1148000)

Look what happens when I post utter rubbish figures that I haven't even factored inflation into.

Nightwish

Well it's the service that's a bone of contention with me. The pensions are based on 40 years service. It's very rare someone has 40 years service, especially females who take unpaid leave / career breaks to raise their children. As I have mentioned previously I work in pensions in the public service and from my experience the average service is around 20 years.

opinion guy

BrownianMotion wrote: »

Hint €266000 > €1148000

Um....

BrownianMotion

Haha an unfortunate mistake. Just add it to the list of incorrect figures!

djk1000

Ok, I'm not in the public service, I don't apologise for the public or private sector and I posted to provide two links, one to a public pension calculator and one to a private pension calculator. My example, was just an example, nothing more or less. It was not my intention for people to draw conclusions as to my motives, or to take any particular message from it.

My aim was solely to give people some tools to make informed comments when it comes to comparing public and private salaries (like for like if you will). I've seen some excellent posts here with rational comparisons in salary between public and private, but I haven't seen many that can bring hard facts in about pensions.

If you want to have a little rant about something or other, do it somewhere else, I was trying to be helpful, not to give an excuse for another Public vs. Private battle.

djk1000

muboop1 wrote: »

So your saying... A public Sector workers pension isn't better then that of a private sector worker?

For figures you input that is?

No, that would be a sweeping generalisation, I don't think generalising like that is accurate, fair or inviting of proper discussion. I'm not sure how you read between the lines to come up with that.

djk1000

nkay1985 wrote: »

Is this calculator using the new pension scheme that was announced today? And, if so, does that not only affect new entrants into the public service?

Don't know, but I presume that the pensions board haven't had time to update the calculator yet. When they do, I'd hope that those links are still valid.

djk1000

Nightwish wrote: »

Well it's the service that's a bone of contention with me. The pensions are based on 40 years service. It's very rare someone has 40 years service, especially females who take unpaid leave / career breaks to raise their children. As I have mentioned previously I work in pensions in the public service and from my experience the average service is around 20 years.

Good point, can public service workers make voluntary pension contributions to make up to the 40 years? If so, how cost effective is it compared to the benefit they receive?

Arnold Layne

Any calculations available for a Private Sector worker that has paid in for 10 years to their pension fund, but cannot do so anymore due to being made redundant?

Nightwish

They can open an AVC with the likes of Cornmarket but they are very very expensive for what you get in return. You can also purchase what is called "notional service" which is like buying added years which is again incredibly expensive, and cost prohibitive to most staff. One year can cost up to €10k.

BroomBurner

At least with AVC's, the amount of investment is a choice (I think €50 is the minimum), as is the level of risk.

muboop1

djk1000 wrote: »

No, that would be a sweeping generalisation, I don't think generalising like that is accurate, fair or inviting of proper discussion. I'm not sure how you read between the lines to come up with that.

I specifically stated that for the figures you put in. I never made a sweeping generalisation. I realise my post reads that way however. I apologise for that.

BrownianMotion

djk1000 wrote: »

If you want to have a little rant about something or other, do it somewhere else, I was trying to be helpful, not to give an excuse for another Public vs. Private battle.

While your intentions might be good I'm afraid by posting incorrect figures like you have you are not really being helpful.

All your assumptions are set up to create the illusion that a public sector pension is worth less than a private sector pension with similar payment rates. In particular,

• You take an example of a man. Men don't live as long as women, so will not cost as much in a guaranteed defined benefit scheme.
• You take a link which assumes 6% growth on your private pension fund. Optimistic to say the least.
• You assume inflation/annuity factors do not exist.

The last one is pretty important in calculating this kind of thing and cannot just be disregarded.

funnyname

do your sums again