Notional Service Puchase

Public servants who will have less than maximum pensionable service at retirement age can buy notional service to make up for the shortfall in their pension entitlements. So if at your normal retirement age you expect to have 37 years service completed, you can use the NSP’s to buy the three missing years. The service bought is treated as actual service in calculating pension and lump sum entitlements at retirement. So having bought the missing years your pension will be calculated by reference to 40 years of service.

There are two methods of purchasing this service. Payment may be by:

 Lump sum payment, or

 Periodic deductions from pay.

Advantages of NSP’s include:

• You know exactly how your pension benefit will be calculated.

• You know what it will cost.

• NSP is a defined benefit.

• Contributions attract tax relief.

Disadvantages include:

• Not open to those who will have full service at their normal retirement date

• Not open to those who will have total service of less than nine years at their normal retirement date

• If you retire earlier than anticipated, you will not get the full benefit you expected

• No flexibility in where the purchased service is applied, i.e., can’t make up shortfall in lump sum only

• Cannot turn the investment into an approved retirement fund (ARF).

   

For future information you can go to The Irish Civil Service Pensions Information Centre Website where you can get an estimated cost of Buying NSP's.

http://www.cspensions.gov.ie/modellers.asp