Richard Bruton (Dublin Bay North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

161. To ask the Minister for Public Expenditure and Reform if persons who are paying into public service pension schemes have to continue making contributions after they have reached the maximum 40 years' service; and if he will make a statement on the matter. [22070/22]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As the Deputy may be aware, there are different employee contribution arrangements applying to public service pension schemes depending on when individuals joined their relevant scheme. Accordingly, I have addressed the question raised below based on whether an individual is a member of a pre-existing public service pension scheme or the Single Public Service Pension scheme. 

1. Pre-existing Public Service Pension Schemes

These schemes apply to those who joined the public service prior to 2013. It is a condition of the majority of these schemes that the member make a pension contribution towards the cost of retirement benefits for the full period of his or her scheme membership.

That continues to be the case even if the member serves in excess of 40 years, which in the standard pre-existing pension schemes is the maximum period of pensionable service that is allowed in the calculation of pension benefits.

I should point out that these schemes are defined benefit schemes, which means that benefits are based on a defined calculation formula (e.g. 1/80th and 3/80ths of final pensionable remuneration for retirement pension and lump sum, respectively, for public servants in modified PRSI class) rather than on the contributions made by or on behalf of the individual.

It is also worth noting that the value of superannuation benefits for the individual continues to increase beyond the 40 year threshold as increments, promotion or pay increases (occurring after 40 years’ service) are reflected in the pension and superannuation lump sum ultimately payable on retirement.

Refunds of excess contributions are possible in respect of public service spouses’ and children’s contributory pension schemes, which provide dependents’ benefits in case of the death of the member either during service or following retirement. These refunds apply where reckonable service is given in excess of 40 years – such refunds relate to contributions made in the earlier part of one’s career. 

Single Public Service Pension Scheme individuals who joined the public service from 2013 onwards are  members of the Single Public Service Pension Scheme. This is a Career Average Defined Benefit scheme, with member pension and lump-sum benefits (known as ‘referable amounts’) building up on the basis of pensionable remuneration received by members in a pay-period. The member pays employee contributions in each pay-period. This continues to be the case until such time as a member retires.

In the Single Scheme, the same concept of maximum reckonable service (i.e. 40 years) does not exist. There is, however, a mandatory retirement age of 70 for the majority of members, with lower ages for certain members of uniformed grades and other cohorts.