Written answers

Wednesday, 23 March 2011

Department of Education and Skills

Pension Provisions

9:00 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 55: To ask the Minister for Education and Skills if he will respond to an issue regarding a pension raised in correspondence (details supplied). [5527/11]

Photo of Ruairi QuinnRuairi Quinn (Dublin South East, Labour)
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The Public Service Pension Reduction (PSPR) is a once-off reduction applied to the gross annual pension of public service pensioners by reference to a set of rates and income bands.

The Financial Emergency Measure in the Public Interest Act 2010 (No. 38 of 2010) gave effect to PSPR.

The measure does not alter in any way other aspects of Public Service Pensions so all regulations and conditions pertaining to the award of a pension to the teacher in the particular case referred to by the Deputy would continue to apply.

In the case of the teacher referred to, the award of the pension was subject to the condition that they would not be eligible for future employment in any capacity as a teacher/lecturer in any school or college recognised and funded directly or indirectly by the Department of Education and Skills and should they be subsequently employed in any such capacity payment of pension would immediately cease.

The following information contains further details on the Public Service Pension Reduction.

Public Service Pension Reduction (PSPR) - Frequently Asked Questions

1. What is the basic design of the public service pension reduction?

The measure is a once-off reduction applied to the gross annual pension of public service pensioners by reference to a set of rates and income bands. In this sense it is not a levy in the way that the public service pension-related deduction

is often called the pension levy.

It will apply to existing pensioners and persons retiring up to end-February 2012. Retirees thereafter will not be affected, but their pensions will be lower as they will be affected by the January 2010 pay cuts.

The reduction has a proportionately greater impact on persons with more substantial pensions. Pensions below €12,000 will be exempt.

2. From what date will the reduction apply?

The Public Service Pension Reduction (PSPR) applies to the pensions of civil and public servants with effect from 1 January 2011.

When making the first pension payments in the year 2011, public service employers must ensure that the PSPR only applies in respect of the days of the first 2011 pay period that fall in 2011.

This means that any part of such 2011 pension payments attributable to the year 2010 must not be subjected to the PSPR.

3. Who is and who is not subject to the reduction?

Persons currently receiving public service pensions, or who start to receive them up to 29 February 2012 are subject to the reduction.

Persons who retire after 29 February 2012 will not be affected by the reduction. This is because their pensions will be automatically lowered as they are based on the reduced pay rates applicable in the public service since 1 January 2010.

4. What income bands and rates are used to determine the reduction?

First €12,000 0%

Between €12,000 and €24,000 6%

Between €24,000 and €60,000 9%

Above €60,000 12%

5. Where a pensioner also gets a State Pension from the Dept. of Social Protection, is that State Pension income be subject to the reduction?

No.

6. Are retirement lumps sums or death gratuities affected?

No, only pensions.

7. Are survivor pensions payable under public service schemes liable to the reduction?

Yes.

8. For persons on pension rate of pay, does the reduction apply?

Yes.

9. How will public servants at different income levels be affected?

Pension before Reduction(€)Annual Reduction(€)Annual Reduction(%)
12,00000%
15,0001801.2%
20,0004802.4%
25,0008103.2%
30,0001,2604.2%
40,0002,1605.4%
50,0003,0606.1%
60,0003,9606.6%
70,0005,1607.4%
80,0006,3608.0%
90,0007,5608.4%
100,0008,7608.8%

Department of Finance

17 December 2010

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