Will I be entitled to state pension when I retire?

TheJet

Just wondering if I’ll be entitled to the state Old Age Pension when I retire. I worked in private sector for almost 20 years until last year when I started working in the public service. I’ve never paid into a private pension. If I continue working in public sector until retirement I’ll only receive a small pension as I’ll only have 20 years of pension contributions so I’ll need the state pension. I pay PAYE and PSRI. Thanks

coylemj

What class of PRSI contribution are you making in your new public sector job?

Even if you are not now making contributions which will count for the state pension, the 20 years contributions you have in the bag will get you 50% of the contributory old age pension under the new rules.

ted1

How old are you ? There’s s string likelihood that there will be no state pension in years to come

You should look at topping up
Your pension

sunnyday1234

ted1 wrote: »

How old are you ? There’s s string likelihood that there will be no state pension in years to come

You should look at topping up
Your pension

What is this scaremongering about ? Why do people think there will be no state pension. The state pension will always exist, maybe it will reduce or increase (no one knows) but it will be present.

Fol20

sunnyday1234 wrote: »

What is this scaremongering about ? Why do people think there will be no state pension. The state pension will always exist, maybe it will reduce or increase (no one knows) but it will be present.

Its not scaremongering. The amount of pensioners will double over the next 20-40years. people are having less children and the ratio of workers to pensions will fall from about 5-1 to 2-1. The pension will still more than likely be there in some form. I wouldnt like my future to dependent on it though.

Jim2007

ted1 wrote: »

How old are you ? There’s s string likelihood that there will be no state pension in years to come

BS. Of course there will be a state pension, politics will ensure that, especially with an ageing electorate. But it most likely will be the typical three tier system operating in most of Europe today.

TheJet

coylemj wrote: »

What class of PRSI contribution are you making in your new public sector job?

Even if you are not now making contributions which will count for the state pension, the 20 years contributions you have in the bag will get you 50% of the contributory old age pension under the new rules.

Thank you.
PRSI Class A1 - it’s entry level public service role.

If I remain working in the service until retirement I’ll have 25 years pension contributions. I could never afford to start a private pension in my previous employment and I certainly can’t afford to top up my pension. I’ve only a years service completed. A couple of my co-workers are due to retire after their 40 years service and were just talking about their pensions and mentioned to me that as a public servant I would not be entitled to get the state pension. It worried me a little. If I remain at my current grade the pension I will receive would be tiny and I’ll need the state pension.

JaCrispy

My understanding was this

Pension is calculated at the rate of one eightieth of retiring salary for each year of pensionable service at the date of retirement subject to a maximum of 40 years. For example, a public servant on a 'retiring salary' of €60,000 with 40 years' contributions to the scheme will receive an annual pension of €30,000 (i.e. 1/80th of €60,000 x 40).

A public servant on the same salary with 35 years' pensionable service will receive an annual pension of €26,250 (i.e. 1/80th of €60,000 x 35).

IIRC - post 1995 public sector pensions are a combination of contributory pension and state pension.

In your case, if you retire on 50k with 20 years service then you'd get an yearly pension of 12,500 and a lump sum of €37500. However, your yearly pension is just above the state pension, so what exactly are you paying for....just the lump sum?

Sarn

Just to add that my understanding is the same as the above, the state pension is incorporated into your final PS pension.

treade1

The older guys who are due to retire soon are on a different public sector pension to you. Older public servants who commenced work before 1995 are not entitled to the state contributory pension so what they were saying was correct for them. If they retire with 40 years service their pension will be 50% of their finishing salary.

However you as a new entrant are on the new career average pension. You will be entitled to the full state contributory pension assuming you paid the correct rate of PRSI in the private sector and which you are now also paying in your public sector job. Your public sector pension will be based on 25/80ths of your career average salary minus the contributory state pension which you will also be entitled. New entrants also have a retirement age of 70.

You can contact your pensions manager who will be able to provide you with a pension statement outlining your current and future entitlements based on your current salary and 25 years service.

coylemj

OP, what the posters are saying above (posts #8 & #10) is correct. You will continue to clock up class A PRSI contributions towards your state pension and will have the maximum entitlement (based on 40 years contributions) when you retire.

The public sector pension you will get takes the state pension into account i.e. they pay you the target benefit minus what you're getting from the state pension. This is known as 'integration' in the private sector and 'co-ordination' in the PS.

If your PS pension when you retire is not much more than the state old age pension, then as poster JaCrispy has pointed out (in post #8), your only additional benefit from moving to the PS is that you will get a tax-free gratuity when you retire which you probably would not have received had you worked to retirement age in the private sector.

TheJet

Thank you so much for all you helpful responses. It’s been a great help. Much appreciated

only to note that the figures given based on the 50k wont apply due to career average rather than final salary being the base figure post 2013 but the general info is correct

colleagues careless enough to blithely tell a new entrant that they didnt receive a state pension are colleagues id not consult on anything, for future reference. thats inexcusable ignorance from them

scaremongering about future COAP almost always comes from posters of a particular agenda with a fairly casual relationship with .... well any type of actual practical or policy expertise tbh. worth remembering that even were the COAP to reduce in a significant way, this would simply become a similarly significant agenda item for pay and remuneration discussions between govt and unions.

keep calm, carry on and get promoted if at all possible!

BarryD2

AFAIK there isn’t a large monetary difference between the state contributory pension and non contributory pension. But the latter is mean tested. So if you’re on lowish salary you’ll like qualify for a broadly similar amount? Which is why it might also be good idea to put some away in a PRSA type scheme? If you can at all.

Ace2007

sunnyday1234 wrote: »

What is this scaremongering about ? Why do people think there will be no state pension. The state pension will always exist, maybe it will reduce or increase (no one knows) but it will be present.

And whose going to pay for this state pension. Currently for every pensioner there are 5 people working, Due to reduce birth rates, it's going to get to the stage that there will be only 2 people working for every pensioner.

You will probably want free health care, assistance with nursing home care, your bus pass - the list is endless. Do you expect your children/grand children to pay 50/70% in tax to fund these things for you. Or where is the money going to come from?

It could exist in the sense that it's means tested - if you own your own home for instance that you wouldn't qualify as you would have a significant asset compared to someone who doesn't own their own home.

Its makes all the sense in the world, that people should be saving for their own retirement, and their own needs, instead of hoping that the state pension will exists, or that they will have access to it.

The state pension age is already being pushed out - and will continue to do so, so people have to understand that when they retire from their job at age 65, there will be a gap between retiring and getting their state pension. For some people this will be 3 years, could be 5 years before you know it....

Save for yourself and don't be relying on future generations - don't burden them with that debt and responsibility.

mlumley

I have worked in Ireland for 25 years. Do not have enough stamps for a full contributory pension.
I also worked in the UK for more years, and not enough for a full UK pension.

I had to apply for a Non-contributory pension from Ireland.

The got the details from the UK of what I was paid by them, took that from what a Non-cob pension in Ireland would pay, and let me keep 30 euros of my UK pension.

I would expect they would do something along those lines with yo.

Either way, I ended up with more than I would have just getting a full Irish contribution pension.

Phone Sligo, they are VERY helpful, They actually saved me a few grand on disability benefits.

Jim2007

Ace2007 wrote: »

Its makes all the sense in the world, that people should be saving for their own retirement, and their own needs, instead of hoping that the state pension will exists, or that they will have access to it.

Why do you think the entire of the EU, including Ireland, has begun the process of pension reform??? Nobody has said there will not be changes, there absolutely will. But most likely is that Ireland will move to the same three pillar system being adapted by other EU members.

That means there will be both contributory and non contributory state pensions as a first pillar, supplemented by mandatory second pillar savings and voluntary third pillar savings.

The auto-enrollment to pensions is the first step to a second pillar savings requirement in Ireland.

Ace2007

Jim2007 wrote: »

Why do you think the entire of the EU, including Ireland, has begun the process of pension reform??? Nobody has said there will not be changes, there absolutely will. But most likely is that Ireland will move to the same three pillar system being adapted by other EU members.

That means there will be both contributory and non contributory state pensions as a first pillar, supplemented by mandatory second pillar savings and voluntary third pillar savings.

The auto-enrollment to pensions is the first step to a second pillar savings requirement in Ireland.

This the auto-enrolment that is way behind where it suppose to be in the projected road map? When it comes to Pensions, the Irish government move at a snails pace, in fact anything that doesn't directly involve the government moves at a snails pace.

Twenty Grand

Fol20 wrote: »

Its not scaremongering. The amount of pensioners will double over the next 20-40years. people are having less children and the ratio of workers to pensions will fall from about 5-1 to 2-1. The pension will still more than likely be there in some form. I wouldnt like my future to dependent on it though.

Honestly, there will be a pension.
But the age you get that pension may be well in the future.

When the US set up it's pension system, the pensionable age was set above the average life expectancy.
I would expect a similar scenario when we hit a pension crisis. People retiring now may see 30+ years of retirement. I highly doubt this will continue.

I also see mandatory employer pension schemes.

The J Stands for Jay

Fol20 wrote: »

Its not scaremongering. The amount of pensioners will double over the next 20-40years. people are having less children and the ratio of workers to pensions will fall from about 5-1 to 2-1. The pension will still more than likely be there in some form. I wouldnt like my future to dependent on it though.

Every time I hear this, I wonder where immigration fits into this picture. Will jobs previously held by the now OAPs cease to be done? Will our borders be closed to potential taxpayers?

Ace2007

McGaggs wrote: »

Every time I hear this, I wonder where immigration fits into this picture. Will jobs previously held by the now OAPs cease to be done? Will our borders be closed to potential taxpayers?

What jobs are not done by OAP's as a matter of interest?

Would you move to a country that has high taxes, so that you could pay for those in their retirement years, who were too lazy to save for themselves?

Think about our current taxpayers. They pay for public healthcare - which anyone will tell you is a farce - waiting up to 2 years for appointments.

They pay for the dole, they pay for people on HAP schemes, they pay for free bus passes, they pay for social housing, there is so much they pay for - and yet it's not enough to sort out the mess that this country is in.
If you want anything in this country done, and done on time - you pay for it privately and you'll get exactly what you want.

Therefore an ageing population is only going to see these problems get worse, do you honestly think that immigration is going to solve these problems in 30 years time as well as help pay the state pensions to everyone - and help cover nursing home care etc.