Written answers

Tuesday, 15 May 2018

Department of Education and Skills

Public Sector Pensions

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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243. To ask the Minister for Education and Skills the terms of the new public service pension scheme for new teachers who commenced work since 2013; the contribution rates that will apply; when they will receive their pension; the way in which their pension will be calculated; and if he will make a statement on the matter. [21280/18]

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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The Public Service Pensions (Single Scheme and Other Provisions) Act 2012 was enacted by the Oireachtas and became law on 28 July 2012. The Act provides for aSingle Public Service Pension Schemefor the generality of new public servants including teachers. The Single Scheme was commenced with effect from 1 January 2013 by Order by the Minister for Public Expenditure and Reform.

The Single Scheme provides that new entrants to pensionable public service employment on or after 1 January 2013 are, in general, members of the Single Scheme. In addition former public service employees returning to the public service after a break of more than 26 weeksin pensionable public sector employment become members of the Single Scheme. (Persons in pre-existing public service pension schemes, returning directly from approved leave of absence do not become members of the Single Scheme.)

The contribution rates payable by Single Scheme members’ while in paid pensionable employment consists of 3.5% of net pensionable pay (i.e. pensionable pay less twice the rate of State Pension Contributory) plus3% of pensionable pay.

Subject to having paid into the Scheme for at least 24 months, the minimum age at which pension will be payable is linked to the State Pension age, that is age 66 years currently, rising to age 67 years in 2021 and age 68 in 2028. A compulsory retirement age of 70 also applies.

The legislation provides a facility for early retirement from age 55 on cost-neutral grounds. In such cases the benefits payable will be actuarially reduced.

The single scheme also provides for benefits in the following circumstances:

- early retirement on medical grounds, subject to certain conditions;

- death in service benefit of twice annual pensionable remuneration;

- preserved benefits paid on application at the age at which a member would be eligible to receive the State Pension Contributory (SPC); The preserved benefits would be payable on reaching State Pension Age to a person who left public service employment before normal pension age having completed the vesting period.

- pensions for spouses or civil partners and eligible children where the Single Scheme member dies in service or following retirement.

Unlike pre-existing public service pension schemes where benefits are calculated by reference to pensionable pay at retirement, under the Single Scheme career average earnings are used to calculate benefits. A member builds up two types of benefits, called Referable Amounts, while in paid pensionable employment. Separate Referable Amounts are built up towards retirement lump sum and annual retirement pension.

For most public servants, including teachers, who are members of the Single Scheme the pension Referable Amounts accrue at the rate of 0.58% of pensionable pay up to a threshold of 3.74 times the value of the Contributory State Pension, plus, where pensionable pay exceeds that threshold, at the rate of 1.25% on the excess. (At this time the threshold equates to €47,480.77 per annum.)

The Lump sum Referable Amount accrues at a rate of 3.75% of pensionable pay.

Where a person is not working on a full-time basis the referable amounts are adjusted by reference to the proportion that the number of hours worked bear to the full-time hours.

For amounts earned during earlier years of membership of the Scheme, the legislation provides that these may be increased in subsequent years having regard to changes in the consumer price index.

The maximum gross annual pension that may accrues at retirement will be equivalent to the sum of the referable amounts together with adjustments in the period as provided for having regard to changes in the Consumer Price Index. Similarly the gross lump sum payable will be the equivalent of the sum of the lump sum referable amounts in respect of the period as adjusted by changes to CPI.

The Department of Public Expenditure and Reform, which has overall responsibility for public service pension policy, has available on its website extensive information on the Public Service Single Scheme to assist Single Scheme members and other interested parties. The information may be accessed at the following link:

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