HealtH Matters 107
pensions speCial
t
he current economic climate has given effectively what you are buying is an
everyone a taste of what it is like for enhanced promise of income at
your take-home pay to be effected. What “if you believe you are retirement from the Hse. there is no
a lot of people don’t realise is that when
they reach retirement, even with the best
not going to retire with
investment risk to you and the promise is
provided by the state.
of pension schemes and perfect retirement
full service, you need to
these are very costly options for the
planning, you will still be looking at a exchequer so be careful, in the current
minimum of a 33 per cent drop in income. consider your options climate they may not be around for much
Members of the Hse are entitled to one
of the best pension schemes available.
and even if you are
longer and there has already been hints that
they may disappear. It is, however, difficult
In the private sector, those who are lucky
going to retire with full
to see how the state could take it away
enough to have an employer provided from anyone who is already in the process
pension are most likely to be entitled service, there may still of buying back their years or purchasing
to what’s called a defined contribution
pension. this means that the employer
be room for further
notional service.
In limited circumstances, this is not
pays in (if they pay in!) a certain amount on
pension funding.”
the route to go but you need to be
a year-to-year basis, a defined contribution. completely satisfied, ideally by getting
these contributions are invested in markets expert advice, that it is not before
and grow, or don’t grow as the case might considering the other options.
be, and whatever the contributions plus the at retirement, most people who have
growth are at retirement determines how full service in the Hse will be entitled to a additional voluntary contributions
much money you have to go out and buy lump sum of one and a half times their final the other options do have an investment
an income for the rest of your life. salary, along with half of their final salary risk, but if you get the right advice that
a defined benefit scheme, which is as an income. But not everyone will have should not be an issue. aVCs (additional
available to all staff of the Hse means full service. some people will have joined Voluntary Contributions) are payments
that it is guaranteed what you will get out the Hse later in life, may have spent many into a private pension scheme. there are
at retirement, a defined benefit. You are years in training, worked part-time or even several providers who can facilitate the
required to pay an amount in every month taken a career break. payments through your payroll. these
and in return you are guaranteed to get a If you believe you are not going to retire providers include Marsh, Cornmarket and
percentage of your salary at retirement. the with full service, you need to consider your Irish Pensions and Finance. Who you go to
percentage you get is determined by how options and even if you are going to retire often depends on the Union you are with
many years service you have at retirement. with full service, there may still be room for but these companies are generally open to
It is not dependant on market performance further pension funding. deal with anyone in the Hse.
and your employer (the Hse) takes all of the each of the three has arrangements
risk; in other words, if there is not enough what are the OptiOns availaBle? with the country’s largest life companies.
money in your pot when you hit retirement, In reality, you have two options. Buy back they offer a wide choice of funds and
the Hse guarantees to provide you with the years or purchase notional service, or fund are experts in their field of facilitating the
promised income anyway. a defined contribution pension yourself payment through your salary on a month-
a defined benefit pension scheme is the whether that is in the form of an aVC or a to-month basis.
rolls royce of pensions but that does not Prsa. (these will be explained a little
mean that you will be able to afford to buy further). You could of course do both. persOnal retirement
one when you hit retirement. there are savings accOunt
limitations to what it will provide. revenue purchase notional service the other option you have is to fund your
restricts any employee heading into Buying back years or purchasing notional own Prsa (Personal retirement savings
retirement whether that be from the private service is effectively buying into a defined account). Most good independent financial
or public sector to a maximum benefit of benefit scheme and in most circumstances advisors including the companies already
two-thirds of their final salary, or less than these options, if available to you, are very mentioned can organise a Prsa for you
this if you want to take a tax free lump sum good ones. again you pay in on a monthly or you could deal directly with the life
out first. basis or you put in a once-off lump sum. company. Due to the fact that you organise
HM Iss6.1 p71-128.indd 107 12/03/2010 15:28:25
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