Dougal
Well-known member
- Joined
- Sep 7, 2011
- Messages
- 2,692
Over the past few days I have heard Eoin Ronayne from the CPSU twice on our airwaves, once on Pat Kenny on Newstalk and again on Saturday RTE. On both occasions he used the same argument, our members get the OAP which they pay for (I agree with him here on the basis that they pay class A PRSI), but for an extra 115 pw, as they are paying already for their OAP, it is costing them 6.5% p.a. of their salary over 40 years. He is factually incorrect on this and not one person challenged him on either program. One panellist was Patricia Callan from the SFA and I was quite surprised that even she did not challenge this as she is extremely vocal of the fact that Pensions should be taken into account when discussing overall salaries. Using his figures he is basing this on someone retiring with a salary of 35,880. Their pension on retiring would be 17,940.
Pension contributions for the majority of PS, not all but the majority, are calculated as 3.5% for pension based on salary in excess of 2 times the OAP, 1.5% of total gross salary for Tax Free Cash and 1.5% of total gross salary for the Widows & Dependants pension which provides them with 50% of total pension (inclusive of OAP) in the event of death. Now for the purpose of calculation, lets assume that for the first 10 years, this person was earning 20,880 and every 10 years they received a 5,000 pay rise. Over that 40 year period, that person would have contributed a total of 6,622 towards this pension. In the first 10 years, the percentage of salary would have been zero as it would have been in the second 10 years, in the 3rd 10 years it would have been 0.8%, and in the final 10 years it would have been 1.2%. A far cry from the 6.5% that Mr Ronayne is putting across.
Over the same period, this individual would have paid 17,029 from gross salary for which they would receive 53,820 Tax Free Cash in their hand. On top of that they, they would have paid a further 17,029 for access into the Widows & Dependants scheme which provides for half of their pension inclusive of the OAP to be paid in the event of their death, if at the time of retiring, if they did not have a spouse or dependants, this would be refunded. Even if you include the payment into the Widows & Dependants Scheme, which provides much more then just the 115 p.w. pension, the percentages per annum would increase to 1.5% in the first 10 and 20 years, 2.2% in the 3rd 10 years and 2.6% in the final 10 years. So Mr Ronayne, make your argument, put your case forward, but at the very least be truthful about it.
P.S. Mr Ronayne, and if you want to argue that they pay 6.5%, then you cannot use the argument that they pay for the OAP because they would be on Class D PRSI, which does not qualify and is only a maximum of 0.9%. Pick & Mix not an option.
Pension contributions for the majority of PS, not all but the majority, are calculated as 3.5% for pension based on salary in excess of 2 times the OAP, 1.5% of total gross salary for Tax Free Cash and 1.5% of total gross salary for the Widows & Dependants pension which provides them with 50% of total pension (inclusive of OAP) in the event of death. Now for the purpose of calculation, lets assume that for the first 10 years, this person was earning 20,880 and every 10 years they received a 5,000 pay rise. Over that 40 year period, that person would have contributed a total of 6,622 towards this pension. In the first 10 years, the percentage of salary would have been zero as it would have been in the second 10 years, in the 3rd 10 years it would have been 0.8%, and in the final 10 years it would have been 1.2%. A far cry from the 6.5% that Mr Ronayne is putting across.
Over the same period, this individual would have paid 17,029 from gross salary for which they would receive 53,820 Tax Free Cash in their hand. On top of that they, they would have paid a further 17,029 for access into the Widows & Dependants scheme which provides for half of their pension inclusive of the OAP to be paid in the event of their death, if at the time of retiring, if they did not have a spouse or dependants, this would be refunded. Even if you include the payment into the Widows & Dependants Scheme, which provides much more then just the 115 p.w. pension, the percentages per annum would increase to 1.5% in the first 10 and 20 years, 2.2% in the 3rd 10 years and 2.6% in the final 10 years. So Mr Ronayne, make your argument, put your case forward, but at the very least be truthful about it.
P.S. Mr Ronayne, and if you want to argue that they pay 6.5%, then you cannot use the argument that they pay for the OAP because they would be on Class D PRSI, which does not qualify and is only a maximum of 0.9%. Pick & Mix not an option.