Single Public Service Pension and State Contributory Pension: Confirmed they combine?

[telemachus1]

For those paying into a Single Public Service Pension, am I correct that the total pension received at retirement will be inclusive of the State Contributory Pension?

As in, if say a SPSP is currently estimating €25k per annum and the state pension is approx €13k per annum. This person will only receive €25k per annum and not €38k per annum (€25k + €13k)?

I've found a few posts on Reddit here that seem to suggest that's the case. But I'm wondering if I've read them wrong e.g.

https://www.reddit.com/r/ireland/comments/m435li

Seems a bit unfair if this is the case.

 

[luvmypets]

@telemachus1 The rules are different if you joined the public service a long time ago.

The easiest way to tell if you are on the older system is that you would be paying class D PRSI contributions.

If you joined long enough ago to be paying class D then you are unlikely to have many class A from a previous employment.

Class D doesn't earn you any contributory pension so even though you can claim both, you only get a pro Rata contribtatory pension based on how many class A contributions you made before you entered the public service and possibly after you leave it until retirement.

None of the advice matters if you are a "new entrant" which is most people unless you are nearing retirement I.e. 50 plus and worked in the public service since you were a young fella/gal.

A standard full state pension after 40 years is the same money for old or new except that the older might get a small bit extra pro Rata contributory pension if they had some class A from a prior job.

Edit: I just learned that recent public service folks get a worse pension than the OG people because the pension is based on an average wage over their career whereas OG types get a pension based on the highest three years of their last ten years.

 

[telemachus1]

@luvmypets Unfortunately all too aware of the 2013 change to pensions from public service. Joined a short time after this change…

So realistically, anyone who pretty much works most of their working life and pays a pension will never see the initial €13k of that pension because it’s covered by the state pension?

Does this not mean someone is effectively paying into two pensions (state through PRSI and SPSP through Public Service Pension)?

 

[spinuscyn]

@telemachus1 I think the contributions for the SPS take this into account though as in you pay less contributions on the first x of salary because it is covered by the state pension instead. Will try and find the calculation formulae later if I have time

 

[spinuscyn]

It is explained (very poorly ) here

https://singlepensionscheme.gov.ie/wp-content/uploads/2017/12/Scheme-Booklet.pdf

Basically there is Contributory State pension offset (CSP offset) when calculating your contributions - meaning you pay less contributions, meaning you. are not paying twice for the same pension.

Still a shit pension but at least not paying twice for the same thing