University of Limerick Superannuation Schemes

1
University of Limerick Superannuation Schemes

• Brief Outline of
• Early Retirement Provisions

2
Minimum Retirement Age

• 2004 Public Sector Superannuation Act
• New entrant category (post 1 April 2004
  appointees to public service)
• Minimum retirement age for new entrants is 65
• Minimum retirement age for non new entrants is 60

3
Retirement at Age 60

• Non new entrant may retire from age 60 and must
  retire at the end of the academic year in which
  he or she has attained the age of 65
• In the event of early retirement (i.e. from age
  60), pension and gratuity (lump sum) are based on
  service and pensionable pay on date of retirement

4
COMPARISON BETWEEN CLASS A and D PRSIAlbert(a)
has reached age 65 and is retiring after 40 years
service. The retiring salary is 80,000. Joined
the Superannuation and Spouses Childrens
Schemes on entry to the organisation.

• BENEFIT CALCULATIONS
• CLASS D PRSI
• Annual Pension
• 80,000 x 40 /80 40,000
•  
• Gratuity
• 80,000 x 40/80 x 3 120,000

• BENEFIT CALCULATIONS
• CLASS A PRSI
• Annual Pension
• 38,839.31 x 40 /200 7,767.86
• 41,160.69 x 40/80 20,580.35
• Plus State Pension 11,651.79
• 
  40,000.00
• Gratuity
• 80,000 x 40/80 x 3 120,000

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Normal Retirement Example 1

• Person retires at age 60
• Pays Class D PRSI (i.e. entered public service
  before 6 April 1995)
• Pensionable Pay on leaving is 80,000
• Service on leaving is 30 years
• Benefits are as follows
• Gross Lump Sum 80,000 x 30 x 3/80 90,000
• Pension 80,000 x 30 x 1/80 30,000

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Normal Retirement Example 2

• Person retires at age 60
• Pays Class A PRSI (i.e. entered public service
  after 6 April 1995)
• Pensionable Pay on leaving is 80,000
• Service on leaving is 30 years
• Benefits are as follows
• Gross Lump Sum 80,000 x 30 x 3/80 90,000
• Pension 38,839.31 x 30 x 1/200 5,825.90
  plus
• 41,160.69 x 30 x 1/80
  15,435.26
• Total Pension
  21,261.16
• SW pension/benefits?
• Supplementary Pension

7
Resignation before Age 60

• Non new entrants who resign before age 60 are
  entitled to preserve their pension entitlements
• This means that benefits are not paid immediately
  but are preserved until the person reaches age 60
• The benefits are indexed in line with pay
  increases between date of resignation and age 60
• Preserved Pension and Lump Sum are based on
  actual service on resignation
• Cost Neutral Early Retirement is an option for
  those over 50

8
Resignation before Age 65

• New entrants who resign before age 65 are
  entitled to preserve their pension entitlements
• This means that benefits are not paid immediately
  but are preserved until the person reaches age 65
• The benefits are indexed in line with pay
  increases between date of resignation and age 65
• Preserved Pension and Lump Sum are based on
  actual service on resignation
• Cost Neutral Early Retirement is an option for
  those over 55

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Preserved Benefits Example 1

• Person (non new entrant) resigns at age 58
• Pays Class D PRSI (i.e. entered public service
  before 6 April 1995)
• Pensionable Pay on leaving is 80,000
• Pensionable Pay when the person reaches age 60 is
  84,000
• Service on leaving is 28 years
• Benefits are as follows
• Gross Lump Sum 84,000 x 28 x 3/80 88,200
• Pension 84,000 x 28 x 1/80 29,400

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Preserved Benefits Example 2

• Person (non new entrant) resigns at age 58
• Pays Class A PRSI (i.e. entered public service
  after 6 April 1995)
• Pensionable Pay on leaving is 80,000
• Pensionable Pay when the person reaches age 60 is
  84,000
• Service on leaving is 28 years
• Benefits are as follows
• Gross Lump Sum 84,000 x 28 x 3/80 88,200
• Pension 38,839.31 x 28 x 1/200 5,437.50
  plus
• 45,160.69 x 28 x 1/80
  15,806.24
• Total Pension
  21,243.74
• SW pension/benefits?
• Supplementary Pension

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Cost Neutral Early Retirement (CNER)Non New
Entrants

• Available to non new entrants aged 50 or over as
  an alternative to preserved benefits
• Pension and Lump Sum are actuarially reduced to
  take account of the fact that they are being paid
  earlier than would otherwise be the case
• Level of actuarial reduction depends on the age
  of the person at retirement
• Different tables for Lump Sum and Pension

12
CNER Actuarial Reduction TablesFor Persons with
Preserved Age 60
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Cost Neutral Early Retirement (CNER) New Entrants

• Available to new entrants aged 55 or over as an
  alternative to preserved benefits
• Pension and Lump Sum are actuarially reduced to
  take account of the fact that they are being paid
  earlier than would otherwise be the case
• Level of actuarial reduction depends on the age
  of the person at retirement
• Different tables for Lump Sum and Pension

14
CNER Actuarial Reduction TablesFor Persons with
Preserved Age 65
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CNER Example 1

• Person (non new entrant) resigns at age 58
• Pays Class D PRSI (i.e. entered public service
  before 6 April 1995)
• Pensionable Pay on leaving is 80,000
• Service on leaving is 28 years
• CNER benefits are as follows
• Gross Lump Sum 80,000 x 28 x 3/80 84,000 x
  96.1 80,724
• Pension 80,000 x 28 x 1/80 28,000 x 90.1
  25,228

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CNER Example 2

• Person (non new entrant) resigns at age 58
• Pays Class A PRSI (i.e. entered public service
  after 6 April 1995)
• Pensionable Pay on leaving is 80,000
• Service on leaving is 28 years
• Benefits are as follows
• Gross Lump Sum 80,000 x 28 x 3/80 84,000 x
  96.1 80,724
• Pension 38,839.31 x 28 x 1/200 5,437.50
  plus
• 41,160.69 x 28 x 1/80
  14,406.24
• Total Pension
  19,843.74 x 90.1 17,879.21
• SW pension/benefits?
• Supplementary Pension only payable for new
  entrants from age 65 and for non new entrants
  from age 60

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CNER and Professional Added Years

• Where a person who has been awarded Professional
  Added Years opts for CNER two reductions will
  apply
• the appropriate reduction arrangements which
  apply in the case of leaving service below
  minimum pension age will apply
• the resultant service (if any) will then be added
  to actual service and the relevant cost neutral
  early retirement factor will be applied to the
  preserved benefits derived from the aggregate
  service

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CNER Example 3

• Person (non new entrant) resigns at age 56
• Pays Class D PRSI (i.e. entered public service
  before 6 April 1995)
• Pensionable Pay on leaving is 80,000
• Actual service on leaving is 28 years (would be
  32 years at age 60)
• Awarded 4 professional added years but this falls
  to be reduced as follows 4 x 28/32 3.5 years.
  This gives a total of 31.5 years
• CNER benefits are as follows
• Gross Lump Sum 80,000 x 31.5 x 3/80 94,500
  x 92.4 87,318
• Pension 80,000 x 31.5 x 1/80 31,500 x
  81.6 25,704

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CNER Example 4

• Person (new entrant) resigns at age 57
• Pays Class A PRSI
• Pensionable Pay on leaving is 80,000
• Actual service on leaving is 24 years (would be
  32 years at age 65)
• Awarded 4 professional added years but this falls
  to be reduced as follows 4 x 24/32 3 years.
  This gives a total of 27 years
• CNER benefits are as follows
• Gross Lump Sum 80,000 x 27 x 3/80 81,000 x
  85.6 69,336
• Pension 38,839.31 x 27 x 1/200 5,243.31
  plus
• 41,160.69 x 27 x 1/80
  13,891.73
• Total Pension
  19,135.04 x 64.1 12,265.56

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CNER Other Points

• If a person retires between birthdays, actuarial
  reduction factors will reflect this, i.e. the
  rates will fall between last birthday and next
  birthday rates
• Reductions apply for lifetime of pension payment
• SC pension benefits not affected by CNER they
  will be the same as if person had opted for
  preserved benefits
• Supplementary pension (if any) payable from age
  60/65 only
• Deductions for unpaid SC contributions made from
  preserved lump sum before actuarial reduction
  factors are applied
• All applications for CNER will be considered on
  the basis of the business needs of the University

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Contact Information

• Copies of this presentation will be available on
  the Universitys intranet.
• If you would like to discuss any specific
  questions please contact pensions_at_ul.ie
• Pension Contacts
• Brian Mc Cann, HR Officer Pensions Brian.McCann_at_ul
  .ie
• Caroline Neylon, HR Officer Pensions Caroline.Neyl
  on_at_ul.ie
• Elaine Fitzgerald, Pensions Administrator
  Elaine.Fitzgerald_at_ul.ie