I am intending to move to Ireland in 2020 and have previously never worked in the Republic of Ireland.
On initiation of employment in Ireland, would I now be automatically subject to the new TCA pension scheme arrangements or is it still possible to select the average pension scheme arrangements?
I understand the new TCA arrangements are due to be implemented in 2020 but was unclear if this has not been approved in legislation.
Mr CB, email
I guess the fundamental thing to say is that you will not get to choose.
As you note, a new system of calculating eligibility for the State pension is due to come in over the next couple of years. As currently proposed, you will need a minimum of 10 years' contributions to qualify for any pension and 40 years of weekly social insurance, or PRSI, stamps to secure a full pension.
The 40 years, or 2,080 weekly contributions, can be accumulated over your working life. It is up to you when you do so and what gaps in contributions you make. There will be provision for stamps to be paid for those people taking time out from work to care for family.
It is due to come in this year but that will not happen as the Minister has yet even to bring the heads of Bill to Cabinet. That means next year, at the earliest, as the Minister has conceded recently herself, and then there is the small matter of an election which is due this spring and could change the whole picture and timeline.
The choice you refer to relates only to those people who have already retired – since the rules were changed in September 2012 but before the new total contributions approach (TCA) comes into force following legislation. They have had their pensions and their social insurance records checked to see if the proposed new system would benefit them more than the existing system that averages contributions over the full course of your working life. Where it does, they have received the higher pension payment.
New system
Anyone retiring after the new system comes in will be assessed under that new system. There will be no picking and choosing.
For someone like you who is only starting to work in the Irish system in 2020, it will be 2030 before you have the bare minimum of 520 weekly PRSI payments to qualify. Even given the painfully slow process of pensions reform in Ireland, the new system really should be in place by then.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.
