Which job to take

[Guest12345]

Hi, I'm looking for advice. I have decided to make a change and go full time. This means I need to leave my current job. At the moment I don't have any pension and never have had. I'm in my early forties. My husband does have a good one.

I have been offered one job and I feel that I will be offered the position I interviewed for today.
Job 1 is with the HSE so I will be liable for superannuation and prd
Job 2 is with a private healthcare facility so I will not have the above deductions.

Both jobs are comparable in terms of fitting in with what I'm looking for, commute and pay. So I'm conflicted. The idea of 'loosing' 10% of my income isn't appealing but I also feel that it's now or never in terms of starting a pension as if I get used to the extra pay it will be very hard to go back.

If I take the HSE job I will likely be looking at 20 years at least before retirement so that would be how much I will have paid in contributions. Will these 20 years be worth anything? I remember when I was younger, colleagues buying back years so I assume that was done with good reason and that's definitely not something I could do as going full time will increase my childcare costs, at least in the short term.
Or would I be better off taking the private position and buying a private pension? Again, have I left that too late to matter?

Any advice would be appreciated.

[Deise]

You'll be down more than 10% with the HSE job with your actual pension deductions and PRD on top. Also, PRD has no bearing on your pension and isn't paid into a fund, it's basically an extra tax on public jobs.

[Unnamed poster5]

Job2 is your best bet. Congrats on the job offer

[Guest12345]

Thanks Pseudonym

Deise, I understood that the pension deduction is 6.5% of my basic income and then PRD will be just under 2000 per annum on my basic income.
PRSI and USC would be applicable wherever I go.

Am I incorrect or have I missed something?

While obviously I resent paying dead money like PRD, the idea of paying into a pension doesn't bother me if I thought it would ultimately be to my benefit.

[Deise]

My understanding is that income between €28.5k and €60k is subject to PRD of 10%. You also have the regular pension contribution of 6.5% on top of that.

Have a look at this Taxcalc.ie ready reckoner, it'll give you the difference between take home pay for PS or non-PS. For ease of calculations, I've used a starting salary of €40k. Non PS worker with no kids and no property etc would have a net pay of €31423 in 2018. A PS worker would have a net pay of €29720.

Obviously you should run the calculation again for your salary.

[Guest12345]

Thanks Deise, that's a handy calculator
It looks like it would be 6.5% plus 3.3% but that would increase slightly if I get any shift allowances which is likely.

I suppose my real question is, prd notwithstanding, is a public service pension worth paying into at this stage of my life or is it dead money. I don't mind having a lower take home pay if it means i have a benefit in the future.

[magicray]

You will never have a full HSE pension, 20 years in a full time role will get you half way there
Buying back years is very very expensive but you can start an AVC straight away

Give this crowd a call http://www.ipf.ie/, they deal with public service pensions and AVCs and would be able to give you some indication of how much you would need to be topping up by

Also just bear in mind in case full time doesn't end up suiting you too well the HSE are very family friendly - would the private facility allow that down the road too

I'm in the HSE so if you want me to look up anything on our intranet let me know

[RDR]

Does the HSE provide a defined benefit pension?

[Millie]

I don't think they do DB for new entrants anymore. It's contribution based now. I think it is getting less attractive working for the public sector. No doubt someone will go on about job security. I think that should go too..only joking!

[molls]

Public sector is still a defined benefit pension scheme, though the pension is now based on average earnings and workers pay more towards it. However, in calculating the pension entitlement, the value of the state pension is taken into account so if your HSE pension wouldn't be much more than the state pension, you'd probably be better off in the private sector, paying the same amount into a pension fund and getting that payment plus the state pension.

[Millie]

Molls are you sure? For new entrants I thought DB was gone. Average contribution is not Defined benefit as far as I know. I didn't know that about the state pension being taken into account also. That's even worse! I know up until 1995 public sector workers paid higher prsi and got no state pension but got a really good state one. But that sounds like the worst of both worlds. Feck job security, not worth it!

[molls]

Molls are you sure? For new entrants I thought DB was gone. Average contribution is not Defined benefit as far as I know. I didn't know that about the state pension being taken into account also. That's even worse! I know up until 1995 public sector workers paid higher prsi and got no state pension but got a really good state one. But that sounds like the worst of both worlds. Feck job security, not worth it!

absolutely sure as I am a "new entrant" in the public sector scheme who is unlikely to get value for my pension contributions even if I stay here until retirement age.

[Thatgirlcandance]

PRD is tax deductible so you should factor that in. Also your HSE position will be on an incremental scale.
In addition you will have the lump sum at retirement as well as the ongoing pension. Also it is still defined benefit but worked out on your average salary as opposed to defined contribution. Even worked out on average salary it is till superior to defined contribution.

Up to 1995 public sector employees paid a much lower rate of PRSI that is why post 94 scales are higher than pre 95 scales to allow for the PRSI contribution.

DH recently started in the HSE and will have 23 years service at retirement. Even including the prd (he is at lower paid end of HSE wprkers) he contributes a good bit less than if he was in the private sector for the equivalent return.

I think you are still better in the HSE but a pension calculator should confirm it for you.

[molls]

Thatgirlcandance - have you factored in that due to the "integrated system" the "return" from his HSE pension includes his state pension which he would also get in addition to any return on a private scheme?

[Millie]

@ thatgirlcandance: yup I meant to say lower prsi before 1995, sorry!