Transcript University College Cork Pension Arrangements

University College Cork Pension
Arrangements
Briefing Session for all Members
November 2008
Susan O’Callaghan
Pensions Manager
Session Content
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Overview of scheme benefits
Transfer from Defined Contribution to
Defined Benefit
Proposed transfer of assets and liabilities to
the State
Q&A
What is the purpose of the plan?
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To provide you with benefits on retirement
To provide you with benefits on leaving
service
To provide your dependants with a benefit on
your death in service/retirement
How much do I pay?
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Your contribution is 3% of Salary plus 3.5% of Net
Pensionable Salary (salary less twice the state
pension payable to a single person)
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Members who pay Class D PRSI contribute 1.5% of
salary
Your benefits on retirement
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Your benefits on retirement are determined by a
number of factors:
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–
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Your service to retirement
Your salary on retirement
The class of PRSI you pay (people paying Class
D PRSI do not accrue an entitlement to the state
pension)
Your benefits on retirement
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Normal Retirement Age is 65 (* pre 1 April 2004 entrants
to the public sector can retire at age 60)
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It is possible to retire prior to 65 on a “Cost Neutral”
basis
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You will be entitled to both a pension and a tax free
lump sum (*members paying Class D PRSI can forego the
tax free lump sum and opt for a higher pension)
Your benefits on retirement
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Benefits on retirement at age 65
Salary: €45,000
Service to 65: 40 yrs
Net Pensionable: €21,777
Salary (NPS)*
Pension : €10,889 p.a. plus State (€11,611**) : €22,500
(Calculation: NPS x Service/80)
Tax Free Lump Sum: €67,500 (one-off)
(Calculation: Salary x 3 x Service/80)
*Note: For members paying Class D PRSI pension is based on full salary as
there is no entitlement to a state pension.
** Amount of state pension for 2008
Your benefits on retirement
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Will my pension and my spouse’s pension increase
in payment?
The pension in payment will increase in line with public sector
policy of “pay parity” increases. This means that as the relevant
salary scale increases the pension in payment will also
increase.
Your benefits on retirement
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Less than 40 years service to age 65
Your pension will be based on whatever your
service is to age 65 and salary on retirement.
It is possible to pay additional contributions
so as to increase your service on retirement.
Your benefits on leaving service
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Less than 2 years scheme service:
You will be entitled to a refund of your own contributions less
tax, currently 20%
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More than 2 years scheme service
You will be entitled to a preserved pension from age 65 based
on service to date of leaving and the ‘uprated’ salary
or
You may transfer your service to another Irish public sector
employer who operates within the public sector transfer network
(The option to also applies if you have less than 2 years scheme
service)
Your benefits on death in service
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Lump Sum payable to your dependants/estate
Calculation based on service to date of death and will be a
minimum of once salary and maximum of 1.5 times salary
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Spouse’s Pension
Calculation based on expected actual service to age 65 and
salary at date of death.
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Children’s Pension
Calculation is 1/3rd of the Spouse’s Pension payable to a
maximum of 3 children.
Your benefits on death in service
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Benefits on death in service at age 45
Salary: €45,000
Service to 65: 40 yrs
Service on death: 20 yrs
Spouse’s Pensionable: €33,389
Salary (SPS)*
Spouse’s Pension : €8,347 p.a. plus State (€10,612) : €18,959
(Calculation: SPS x Service to 65/160)
Lump Sum:
€45,000
(Calculation: Salary x 3 x Service on death/80)
Children’s Pensions where applicable will be 1/3rd of the Spouse’s Pension
Your benefits on death in retirement
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Spouse’s Pension
Calculation based on service to the date of retirement and the
Spouse’s Pensionable Salary at the date of death.
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Children’s Pension
Payable where applicable
Payment of Additional Contributions
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Is it possible to pay AVCs to the scheme?
Yes you can pay additional contributions to the
scheme so that you purchase notional years service.
Contributions can be paid via lump sum or regular
monthly contributions.
If you want to avail of this option please contact the
Pensions Office at least 1 month prior to your next
birthday.
Payment of Additional Contributions
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I have temporary service, is this
pensionable?
Yes provided the service was not hourly paid and
equates to at least 20% (50% pre 20 December
2001) of the full-time equivalent. Contributions must
be paid in respect of the service in order for it to be
included for pension purposes.
Transfer of Service
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I have prior service with another public sector
body, can this be transferred?
Yes, provided your previous employer is part of the
public sector transfer network. If you wish to avail of
this option please advise your previous employer
that you are now a member of the UCC scheme.
Transfer of Service
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I have retained benefits with a previous
employer – can this be transferred?
Yes, provided the transfer process is commenced
prior to 31 December 2008. The transfer value will
be used to purchase notional service.
Transfer from Defined Contribution to
Defined Benefit
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All members of the Defined Contribution (DC)
scheme automatically became members of the
Defined Benefit (DB) scheme on 1 September 2008
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You now have the option of transferring your DC
account so that service in the DB scheme will be
backdated to the date of joining the DC scheme
Transfer from Defined Contribution to
Defined Benefit
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I paid AVCs – what will happen on transfer?
The value of any AVCs paid (at 1 September 2008) will be
offset against any contributions due for temporary service. Any
balance will be used to purchase notional service.
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I have a transfer in to the DC scheme – how will this
be affected on transfer to the DB scheme?
The value of any transfer (at 1 September 2008) will be used to
purchase notional service
Transfer from Defined Contribution to
Defined Benefit
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I set up a PRSA through UCC before joining the DC
scheme – can this be transferred?
Yes provided transfer process is commenced prior to 31
December 2008. The value of the PRSA will be offset against
any contributions due for temporary service. Any balance will
be used to purchase notional service.
Transfer from Defined Contribution to
Defined Benefit
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I have decided not to transfer my DC account – what
will happen?
If you do not transfer your DC account, service in the DB
scheme will only be counted from 1 September 2008. You will
not be able to pay contributions in respect of any temporary
service prior to joining the DC scheme.
Your DC account will eventually be transferred to a
PRSA/Personal Retirement Bond and you can use this on
retirement to provide additional benefits.
Proposed Transfer of Assets and
Liabilities to the State
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At a special Governing Body meeting on July 15th,
2008 the proposed pension transfer of both pension
assets and liabilities to the state was adopted in
principle pending agreement on the necessary
legislative, statutory and administrative changes
required to implement the proposed transfer.
Proposed Transfer of Assets and
Liabilities to the State
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How does the proposed transfer affect scheme
members benefits?
The transfer will have no implications for an
individual members pension benefits but will ensure
that in future those benefits are underpinned by a
State guarantee.
Proposed Transfer of Assets and
Liabilities to the State
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Will the transfer have any other impacts?
By virtue of moving to the typical public sector unfunded ‘payas-you-go’ arrangement a member will no longer be able to
make a monetary transfer in to the scheme. In addition it will
not be possible for a member to take a monetary transfer out on
leaving UCC.
Any member wishing to make a monetary transfer from
previous employment must commence the process before 31
December 2008.
Pensions Office Contact
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Contact the Pensions Office at:
Email: [email protected]
Tel: 021-490 3449
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You can access the Pensions Office webpage at:
http://www.ucc.ie/en/hr/PensionsOffice/
A copy of this presentation will be available on the webpage
Questions???