The public service Pension-Related Deduction (PRD) is provided for under the Financial Emergency Measures in the Public Interest Act 2009. PRD applies to the pay, including any non-pensionable pay elements, of pensionable public servants.
Specifically, section 2(1)(b) of the 2009 Act provides that any public servant who is a member of a public service pension scheme or who is entitled to benefit under such a scheme or receives a payment in lieu of membership of such a scheme is subject to PRD.
Across the public service certain cohorts of employees in a few specific occupations are not members of a public service pension scheme, but may instead qualify for a one-off non-recurring gratuity payment at retirement provided that they meet certain conditions.
It is understood that the possibility of qualifying for such a gratuity would exist in particular for certain retained firefighters and for certain home help workers. The overall number of such affected public service employees is believed to be quite small.
The payment of such a one-off non-recurring gratuity at retirement to qualifying public service workers constitutes a payment in lieu of pension scheme membership. On that basis the pay received by those workers before retirement and gratuity award, is liable to PRD.
It should however be noted that in practice many of those employees may already be free of PRD, or may be paying much less PRD than previously, on account of the significant amelioration of PRD provided for under the Financial Emergency Measures in the Public Interest Act 2015. This amelioration means that, from 1 January 2016, all persons with annual public service earnings of up to €26,083 were exempt from PRD, and from 1 January 2017, this exemption threshold increased to €28,750.
The recently proposed Public Service Stability Agreement 2018-2020 provides that PRD will be replaced with a permanent Additional Superannuation Contribution (ASC). If ratified, this means that most public servants currently subject to PRD will benefit from increased ASC exemption thresholds under the PSSA 2018-2020. Specifically, the new contribution will apply to pensionable remuneration above a threshold of €32,000 from 2019 and €34,500 from 2020, for those with standard accrual pension terms.
