Veterinary Officers Association
Reviewing your Pension Provision
Prepared on 12th August 2010 by Jim O’Donovan.
Dear Colleague,
It is a sensible course of action to plan for your retirement. This document has been preparedto guide you to some of the information that you need to better understand your current entitlements or to make a decision to take action to enhanceyour retirement benefits.
The Pensions Board is a useful source of information about all aspects of pensions.
The pensions board have produced a booklet setting out the options for civil servants wishing to enhance their retirement income. The document, “Purchase of notional service (PNS) and additional voluntary contributions (AVCs)” is available here. This booklet sets out the options available to civil servants and lists some of the pros and cons associated with each option.
To understand the benefits that your civil service pension could provide you within your retirement consult the Civil service pensions website.
The site has a pensions modellerthat allows you to do the following:
(1) Estimate your pension benefits
The Pensions Modeller is designed to help you get an estimate of your projected pensions benefits based on your actual salary and service details supplied by you. It will on this basis estimate:
-pensions benefits at retirement for a selected retirement age
-spouses and children’s benefits
-death in service benefits
-preserved benefits if you resign before minimum retirement age
-actuarially reduced benefits before minimum retirement age
Note: The calculators will not take into account salary increases between now and retirement.
(2) Project different scenarios
It also allows you to model various possibilities for example:
-you may enter a salary to reflect your projected progress on a payscale or career progression
-you can select your % work pattern from now to retirement date to take account of projected unpaid breaks such as career breaks or term time absence or a period of worksharing.
-you may compare the effect different retirement ages would have on your pension benefits.
(3) Estimate the cost of purchasing notional service years.
You can also determine the approximate cost to you of purchasing notional service in the civil service pension using the modeller. (If you decide to purchase notional service you will have to apply through the Department of Agriculture pensions office, they will confirm you are entitled to buy added years and they will inform you of what the exact cost would be by (i) regular payment or (ii) lump sum.
The civil service pension website also has answers to frequently asked questions as well as information on the pension levy and the early retirement scheme.
Financial advice from an adviser (FA) regulated by the Financial Regulator may be useful to you. However you should be aware of the nature of the relationship between the adviser and the pension provider. Financial advisers may be tied to certain pension providers (meaning they can only sell that companies products) and they may be paid on commission basis (if you are not paying the FA an hourly rate for their advice they are working entirely on commission from the product(s) that they arrange for you). It is also possible to seek independent financial advice on an advice only basis. If you are unsure on what basis you are receiving or paying for advice just askthe FA before you arrange an appointment.
Other issues you will need to be aware of when investigating your options are investment risk, fees and charges. The Pensions Board have a checklist of questions that you may find useful if you are deciding on an AVC or PRSA AVC. The checklist is entitled “Investment risk, fees & charges checklist” – you can download this document from here.
The VOA and its officers are legally prohibited from providing financial or pensions advice and will not do so. Nothing contained herein should be construed as a direction or invitation to take any particular course of action. Decisions about pensions will affect your income in retirement and you should inform yourself fully of your options before taking any action. Seek appropriate advice if you are in doubt.
Please provide feedback to the VOA Pensions subcommittee on this document.
VOA Pensions Subcommittee: Tony McManus, Alan Johnson, Jim O’Donovan
If there is other information that you feel should be included please let us know.