CAN I CLAIM BACK PENSIONS CONTRIBUTIONS?

AD 80

I have been working in a government job for 10 and a half years and am wondering, if I leave, can I claim back my pension in a lump sum?

coylemj

If you were in the civil service or in the direct employ of a Govt. minister such as the Gardai, you cannot get your contributions back and even if you could, you'd need your head examined because the benefits that you will get when you're 60 or 65 would cost you a significant multiple of the money you'd get back.

After 5 years almost all Govt. employees have a preserved benefit and cannot claim back their contributions. If you were paying for a widows and orphans pension and were single when you left the service, you can get those contributions back but the tax man will claw back any tax benefit you got when making those contributions.

_Kaiser_

coylemj wrote: »

After 5 years almost all Govt. employees have a preserved benefit and cannot claim back their contributions. If you were paying for a widows and orphans pension and were single when you left the service, you can get those contributions back but the tax man will claw back any tax benefit you got when making those contributions.

I was in the education sector from 2005-2009 and paid into the pension plan (incl Widows and Orphans) for 4.5 years. Single (not married) then and now.

Does that mean I could now ring the Revenue and get that back?

coylemj

Kaiser2000 wrote: »

I was in the education sector from 2005-2009 and paid into the pension plan (incl Widows and Orphans) for 4.5 years. Single (not married) then and now.

Does that mean I could now ring the Revenue and get that back?

I believe so, I was in the public sector a long time ago and got a refund of my W&O contributions when I was leaving because I was single at the time.

BTW, you wouldn't be contacting the revenue, it would be the pensions section of the Dept. of Education and you'd need to write them a letter rather than phoning.

_Kaiser_

coylemj wrote: »

I believe so, I was in the public sector a long time ago and got a refund of my W&O contributions when I was leaving because I was single at the time.

BTW, you wouldn't be contacting the revenue, it would be the pensions section of the Dept. of Education and you'd need to write them a letter rather than phoning.

Cheers, will follow that up tomorrow so.

AD 80

Thanks Coylemj for the info, I appreciate it. I would have agreed with you a few years ago about needing my head examined, but at this stage of my life (I'm 32) retirement age is so far away that by then the government will have squandered any contributions I've made so that they won't be worth half what they were when originally "contributed". By then I could be living elsewhere and not claiming a pension here or I might not be here at all (getting philosophical). It's true. No-one knows what the future holds and my time of being careful and unhappy just so I might be comfortable in the future, is OVER.

_Kaiser_

AD 80 wrote: »

Thanks Coylemj for the info, I appreciate it. I would have agreed with you a few years ago about needing my head examined, but at this stage of my life (I'm 32) retirement age is so far away that by then the government will have squandered any contributions I've made so that they won't be worth half what they were when originally "contributed". By then I could be living elsewhere and not claiming a pension here or I might not be here at all (getting philosophical). It's true. No-one knows what the future holds and my time of being careful and unhappy just so I might be comfortable in the future, is OVER.

You have a point.. despite the constant reminders about starting a pension we get, you have you ask yourself the value of it in a country that's been so badly mismanaged financially and has already helped itself to people's futures.

Add to that the kicking of cans down the road such as "our" debt in the hope that MAYBE, possibly by then inflation will have taken the sting out of it - I just hope our children agree!

I'm now back in the private sector myself and at the point where I'm eligible to join their scheme, but I'm really undecided as to whether to bother (I'm a little older than you)

coylemj

Kaiser2000 wrote: »

I'm now back in the private sector myself and at the point where I'm eligible to join their scheme, but I'm really undecided as to whether to bother (I'm a little older than you)

So maybe you'll set aside the money and invest it yourself and do just as well as a pension fund. Have you considered the following....

1. 1 euro out of your pocket that you invest yourself would potentially be €2 invested from the payroll in a pension fund when you factor in the tax-free status of pension contributions i.e. you're 50% down before you even get off the start line.

2. The dividends on your private investments will be subject to Dividend Witholding Tax (DWT) and interest on savings accounts will be subject to DIRT. All investment income in a pension fund is tax-free.

3. The pension fund will be managed by professionals who know a lot more about investing than you do.

4. Your employer will not contribute a cent to a self-managed pension fund.

5. If you choose to invest yourself, there is a high probability that you will give yourself the odd 'holiday' and not invest any money in particular months. Your excuses will be holidays, Christmas, car upgrade, house upgrade, new TV etc.

Chances are that by the time you retire the fund you manage yourself will be a small fraction of what would have accumulated in a pension fund.

I know about management charges and all that but don't fool yourself that going DIY on a pension makes sense, it doesn't.

coylemj

AD 80 wrote: »

Thanks Coylemj for the info, I appreciate it. I would have agreed with you a few years ago about needing my head examined, but at this stage of my life (I'm 32) retirement age is so far away that by then the government will have squandered any contributions I've made so that they won't be worth half what they were when originally "contributed". By then I could be living elsewhere and not claiming a pension here or I might not be here at all (getting philosophical). It's true. No-one knows what the future holds and my time of being careful and unhappy just so I might be comfortable in the future, is OVER.

What you 'contributed' was a fraction of what would be needed in the private sector to fund whatever benefits you're entitled to.

As for the Government 'squandering' the money, that's not something that public sector workers have to worry about because their pensions are paid out of current revenue so it's the tax payers of tomorrow who will fund your pension.

As to your claim that the money you contributed 'won't be worth half what they were when originally contributed', like most public sector workers you clearly don't understand why your pensions are described by commentators as 'gold-plated'.

Public sector pensions are linked to current pay so if a civil servant retired on half pay in 1990, he is still getting half the current pay of a serving civil servant at the same grade. In other words, public sector pensions rise with earnings. In the private sector there is usually an attempt to keep pensions rising in line with the Consumer Price Index i.e. inflation but in practice, private sector pensions typically fall behind and so pensioners relying on a pension in the private sector typically see inflation eat away at the purchasing power of their pension.

What that means is that if a Garda Chief Supt and a bank manager retired 20 years ago on the same pension, the bank manager's pension today is probably half that of the retired Chief Supt.