Superannuation - addressing shortfalls
The public service pension scheme, Superannuation is largely calculated on two main factors, your final salary and the number of year’s pensionable service you have worked. Teacher’s pensions, nurses and indeed most public servants are asked to work for 40 full time years to qualify for a full pension. There are exceptions of course such as the Defence Forces, the Gardai and some professionals such as hospital consultants who qualify for improved terms.
To qualify a public sector employee would have to work in pensionable employment from the age of 20 to age 60 with no breaks. Reasons such as further education, travel, family time and early retirement can lead to career breaks, job sharing, part time service, subbing or locum service and time spent not working in the public sector, all of which reduce the length of pensionable service. As such only a small minority of people actually achieve a full pension.
The impacts of such gaps are demonstrated above in the case of a public sector pension in which the employee retires on a salary of €60,000 with 30 years of service instead of the required 40.
To make up such shortfalls the onus is on the employee, not the employer to fund the gaps that arise. There are a number of different ways to address such shortfalls, some of which are more appropriate than others depending on the individual’s situation.
Let's take a brief look at some of the options available by clicking on each.
Read the Pension Board's Guide "Retirement Options for Public Servants".
Also a recent report commissioned by the INTO giving a comparison between NSPs, Groups AVCs and PRSA AVCs is well useful and well written. InTouch Pension Supplement.
To calculate the the pension and lump sum you will be entitled to at retirement, you can access the Department of Finance's pensions website here.
For advice as to the most appropriate choice or combination of choices given your circumstances request a call from a PSRA advisor.