Dáil Éireann Debate, Tuesday - 25 October 2022
270. Deputy Noel Grealish asked the Minister for Public Expenditure and Reform if he will clearly outline the maximum lump sum and pension benefits payable for civil and public service retirees in all grades from junior to senior; if there are caps on any part of applicable pensions whether a retiree is in a junior or senior grade; and if he will make a statement on the matter. [52810/22]
View answerAs the Deputy will be aware, as the Minister for Public Expenditure and Reform, I have direct responsibility for the civil service pension schemes, while I hold a policy and approval role in respect of certain public service pension schemes.
Pension benefits for civil and public servants can vary depending on individual careers in the public service.
Pre-1995 Pension Schemes
In general, for public servants who joined prior to 6 April 1995, a pension of 1/80th of final pensionable remuneration is payable for each year of reckonable service. A lump sum of 3/80ths of final pensionable remuneration is also payable. Total reckonable service for both pension and lump sum is subject to an overall maximum of 40 years, or equivalent.
A public servant in this category who secures maximum pension benefits based on 40 years’ reckonable service would receive a lump sum equal to 150% of their final pensionable remuneration, and an annual occupational pension equal to 50% of their final pensionable remuneration.
Post-1995 Pension Schemes
In general, for public servants who pay Class A PRSI (fully insured) and/or who joined from 6 April 1995 up to 31 December 2012, the lump sum is calculated similar to a Pre-1995 lump sum and the relevant annual occupational pension benefit is ‘integrated’ i.e. account is taken of the individual’s entitlement to the State Pension (Contributory).
This provides for:
1. 1/200th of pensionable remuneration multiplied by years of reckonable service (to a maximum of 40 years or equivalent) for that part of the final pensionable remuneration which is less than or equal to 3.333333 the state pension;
2. plus, 1/80th of pensionable remuneration multiplied by years of reckonable service (to a maximum of 40 years or equivalent) for that part of the final pensionable remuneration which is in excess of 3.333333 of state pension.
A public servant in this category who secures maximum pension benefits based on 40 years’ reckonable service would receive a lump sum equal to 150% of their final pensionable remuneration, and an annual occupational pension (when combined with the State Pension (Contributory)), equivalent to 50% of their final pensionable remuneration.
Pension Benefit Cap on pre-existing Pension Schemes
The 40-year limit on the total pensionable service to be counted towards public service pension benefits also applies where the person has been a member of more than one pre-existing public service pension scheme (i.e. not the Single Pension Scheme).
The extension of the 40-year limit to membership of more than one scheme was implemented under the Public Service Pensions (Single Scheme and other Provisions) Act 2012 Act, and anyone who has accrued more than the equivalent of 40 years’ service before the passing of the Act may retain the benefit of service accrued before 28 July 2012.
Single Public Service Pension Scheme 2013
The Single Public Service Pension Scheme (‘Single Scheme’) is the default public service pension scheme for all new-entrant public servants since 1 January 2013. It is a career-average pension scheme, integrated with the State Pension (Contributory).
In general, members accrue pension and lump sum referable amounts (benefits) in each pay period. The sum of referable amounts calculated in each pay period over a member’s career will result in their lump sum and pension payments.
Lump sum referable amounts are accrued at a rate of 3.75% of gross pensionable remuneration; while pension referable amounts are accrued based on the State Pension (Contributory) threshold:
1. below 3.74 times State Pension (Contributory), pension referable amounts accrue at a rate of 0.58% of gross pensionable remuneration;
2. above this threshold, pension referable amounts accrue at 1.25% of gross pensionable remuneration.
There is no upper cap or limit on the referable amounts that a member can accrue over their Single Scheme career. The only ‘cap’ is where a member engages in multiple or simultaneous public sector employments resulting in an individual only receiving the benefit from one full time equivalent role.
