Prior to 6 April 1995 civil and public servants were insurable under the PRSI system as modified rate contributors. This meant that they and their employers paid a lower rate of PRSI and, as such, were insurable for a limited range of social welfare benefits. Currently Class D contributors are insured for widow's, widower's or surviving civil partner's (contributory) pension, Occupational injuries benefits, carer's benefit and guardian's payment (contributory).
Civil and public servants appointed since 6 April 1995 are insurable at Class A. They and their employers pay a higher rate of PRSI and they are eligible for all social welfare benefits. It is not possible for modified rate contributors to opt to pay the full Class A contribution.
In general, teachers retiring with only a PRSI Class D contribution paid receive a pension benefit from the Department of Education and Skills based on pensionable service and this is called an uncoordinated pension.
Teachers retiring with only a PRSI Class A paid receive a pension benefit from the Department of Education & Skills based on their retirement salary up to a threshold of 3.33 times the single rate of the State contributory pension. This is called a co-ordinated pension. Teachers who pay Class A PRSI contributions do not receive separate State and occupational pensions based on those same contributions.
It is also possible for a teacher to have at the time of their retirement a mixture of both PRSI classes of A and of D. This is called a "split pension“.
The State pension (contributory) is a pension paid to people who reach state pension age (currently 66, rising to 67 in 2021 and to 68 in 2028). Since its introduction in 1961, entitlements have been based on a Yearly Average calculation, where the number of reckonable weekly PRSI contributions are divided by the number of years between entering social insurance and state pension age. Provisions also exist for the award of a mixed insurance pro rata state pension, where a person has substantial periods of PRSI coverage that are not reckonable for pension purposes. Whether or not such a pro-rata pension is more advantageous to a person with significant Class D contributions will depend upon their individual circumstances.
The Government intends to change the calculation method used for the State Pension (Contributory) by introducing a Total Contributions Approach (TCA) to establishing the level of entitlement for all new state pension contributory claims from 2020 onwards (TCA2020).
I launched a public consultation on the design of the full TCA to be introduced from 2020 on the 28 May last year to which a wide variety of stakeholder groups were invited. A number of workshops were also held on the day to elicit views and feedback. All Oireachtas members were invited to a detailed briefing in Leinster House by my officials shortly afterwards. The consultation was open for over 3 months and the Department received almost 300 responses from individuals and organisations including open written submissions. Those submissions outlined the views of respondents on a number of issues, including the number of years required for a full pension, as intended as part of the consultation process. An analysis of the views expressed in this consultation was recently submitted to me. When I have considered this analysis, I will bring a proposal for the full design of a Total Contributions Approach to Government for its consideration.
I hope this clarifies the matter for the Deputy.
