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University College Cork Pension Arrangements

Get a comprehensive overview of the University College Cork Pension Scheme. Learn about benefits, transfer options, and the proposed transfer of assets and liabilities to the State. Q&A session included.

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University College Cork Pension Arrangements

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  1. University College Cork Pension Arrangements Briefing Session for all Members November 2008 Susan O’Callaghan Pensions Manager

  2. Session Content • Overview of scheme benefits • Transfer from Defined Contribution to Defined Benefit • Proposed transfer of assets and liabilities to the State • Q & A

  3. What is the purpose of the plan? • 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

  4. How much do I pay? • Your contribution is 3% of Salary plus 3.5% of Net Pensionable Salary (salary less twice the state pension payable to a single person) • Members who pay Class D PRSI contribute 1.5% of salary

  5. Your benefits on retirement • Your benefits on retirement are determined by a number of factors: • 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)

  6. Your benefits on retirement • Normal Retirement Age is 65 (* pre 1 April 2004 entrants to the public sector can retire at age 60) • It is possible to retire prior to 65 on a “Cost Neutral” basis • 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)

  7. Your benefits on retirement • Benefits on retirement at age 65 Salary: €45,000 Net Pensionable: €21,777 Service to 65: 40 yrs 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

  8. Your benefits on retirement • 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.

  9. Your benefits on retirement • 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.

  10. Your benefits on leaving service • Less than 2 years scheme service: You will be entitled to a refund of your own contributions less tax, currently 20% • 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)

  11. Your benefits on death in service • 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 • Spouse’s Pension Calculation based on expected actual service to age 65 and salary at date of death. • Children’s Pension Calculation is 1/3rd of the Spouse’s Pension payable to a maximum of 3 children.

  12. Your benefits on death in service • Benefits on death in service at age 45 Salary: €45,000 Spouse’s Pensionable: €33,389 Service to 65: 40 yrs Salary (SPS)* Service on death: 20 yrs 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

  13. Your benefits on death in retirement • Spouse’s Pension Calculation based on service to the date of retirement and the Spouse’s Pensionable Salary at the date of death. • Children’s Pension Payable where applicable

  14. Payment of Additional Contributions • 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.

  15. Payment of Additional Contributions • 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.

  16. Transfer of Service • 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.

  17. Transfer of Service • 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.

  18. Transfer from Defined Contribution to Defined Benefit • All members of the Defined Contribution (DC) scheme automatically became members of the Defined Benefit (DB) scheme on 1 September 2008 • 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

  19. Transfer from Defined Contribution to Defined Benefit • 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. • 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

  20. Transfer from Defined Contribution to Defined Benefit • 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.

  21. Transfer from Defined Contribution to Defined Benefit • 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.

  22. Proposed Transfer of Assets and Liabilities to the State • 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.

  23. Proposed Transfer of Assets and Liabilities to the State • 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.

  24. Proposed Transfer of Assets and Liabilities to the State • Will the transfer have any other impacts? By virtue of moving to the typical public sector unfunded ‘pay-as-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.

  25. Pensions Office Contact • Contact the Pensions Office at: Email: pensions@ucc.ie Tel: 021-490 3449 • 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

  26. Questions???

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