Sorca Clarke
Question:609. Deputy Sorca Clarke asked the Minister for Defence the reason Defence Forces pensions are abated at the State pensionable age unlike other public sector pensions. [20861/20]
View answerThursday, 30 July 2020
Questions (609)
Written answers
I presume the Deputy is referring to the cessation of a portion of the military retirement pension of certain Defence Forces pensioners on qualifying for the social welfare State Pension (Contributory).
Under the Defence Forces occupational pension scheme applicable to Non-Commissioned Officers (NCOs) and Privates enlisting in the Defence Forces before April 2004, 21 years is the minimum service required for an immediate retirement pension and gratuity, regardless of age. Under this ‘fast accrual’ pension scheme, maximum retirement benefits accrue after 31 years. The 21-year pension, the rate of which varies according to retiring rank and other factors, is payable for the person’s lifetime.
Where qualifying service is more than 21 years, an ‘additional increment’ is payable at a flat rate (generally €9.02 a week currently) for each year of service in excess of 21 years up to a maximum of 31 years’ service. This gives a maximum additional increment of €90.20 weekly. However, under the ‘pre-April 2004’ pension scheme rules, this additional increment ceases to be payable if and when the pensioner reaches the prescribed age for the State Pension (Contributory), that is, at age 66 to 68 depending on a person’s date of birth. The question of a person’s entitlement to a State Pension is, of course, a matter for the Department of Employment Affairs and Social Protection.
These arrangements are in accordance with the long established principle of integrating occupational pensions with Social Insurance benefits of employees who are in full PRSI class. This includes NCOs and Privates who are fully insured for the range of social insurance benefits under the Social Welfare Acts, such as the State Pension (Contributory).
Integration means that a person’s entitlement to social insurance benefits is taken into account when calculating the rate of their occupational pension payable. In an integrated pension scheme, the State Pension or similar contributory Social Welfare benefit is regarded as part of the overall pension package payable to the individual. The integration principle applies right across the public service and, indeed, in many areas of the private sector as well as in other countries.
It might be noted that the method of integration for these ‘pre-April 2004’ military pensioners is more favourable than in other areas of the public service. In the public service generally, integration begins from the time the occupational pension commences payment, for example from age 60/65 where ‘standard accrual’ pensions apply in pre-2013 public service schemes.
NCOs or Privates enlisted before April 2004 who serve 31 years having joined the Defence Forces at age 18/20, can qualify for maximum retirement benefits (pension and lump sum) payable immediately from age 49/51, while those retiring with between 22 and 30 years’ service will also have qualified at a younger age for immediate retirement benefits based on their lower service. However, for all of them, the integration process only begins when the State Pension becomes payable, for example, at age 66. Furthermore, the maximum personal rate of State Pension payable (€248.30 a week currently if under age 80) is considerably more than any reduction that could happen under the Defence Forces pension schemes by virtue of the loss of the additional increment on qualification for the State Pension. This is the scenario for any former member who retires with between 22 and 31 years’ service under the ‘pre-April 2004’ pension scheme.
On foot of the operation of these arrangements, such retired members are therefore in receipt of their full pension entitlements from my Department in accordance with the relevant pension scheme rules.
The foregoing atypical integration arrangements do not apply to NCOs and Privates enlisting on or after 1 April 2004, and whose occupational pensions are subject to standard integration with social insurance benefits along with other public service employees insured for full PRSI.