Pension ABC

All those joining the Irish public service in a pensionable position (as stated in the contract or written offer of appointment) for the first time, or after a break of 6 months or more (including Researchers), would be automatically enrolled in the SPSPS, which is an unfunded pay-as-you-go (PAYG) scheme. Pension entitlements are vested after completing 2 years as a scheme member.

The scheme covers almost all university staff and therefore also most researchers working in the public sector.

No. You are automatically enrolled in the SPSPS (see A1). You cannot opt out.

In general the contributions are solely paid by the members of the scheme (employees).

In a small number of cases, public service bodies are self-funding and such bodies are generally expected to pay an employer contribution, but there is no explicit employer contribution in most cases. The employees pay contributions based on their pensionable remuneration. All contributions are paid into the Exchequer (Ministry of Finance) and the Exchequer will pay out the pensions (if entitlement arises).

What is the contribution rate?

For most members, the rate is 3.5% of net pensionable remuneration plus 3% of pensionable remuneration. The “net pensionable remuneration” is the pensionable remuneration less twice the annual rate of the State pension Contributory (SPC) for a single adult.

For example: a researcher on salary of €28,000 and no pensionable allowances

If you begin working elsewhere in the public service, you will continue to be a member of the SPSPS.
Otherwise,

a) you will be entitled to a refund of your contributions if your pension has not vested (two years’ service)
or
b) your pension will be preserved if it has vested

You will be entitled to a refund of your contributions if your pension has not vested (two years’ service). Your pension will be preserved if it has vested. A transfer of the capital value is not possible.

You can claim a refund of your contributions if you do not fulfill the vesting period (two years’ service).

It is not a scheme rule but it is advisable to inform your employer about your new address.

SPSPS provides occupational and survivors’ pensions and lump sums.

Personal benefits, consisting of a pension and a retirement lump sum, are payable on reaching the minimum pension age, which for most members is 66 years at present, and is scheduled to rise to 67 and 68 years in 2021 and 2028, respectively.

Other features include:

• Member’s legal personal representative will receive a capital sum (equal to twice annual pensionable remuneration) should the member die in service.
• Pensions are payable to a spouse or civil partner and to eligible children, as defined in the Scheme, in a case of death (before or after retirement).
• Scheme members ordinarily pay full social insurance contributions and are eligible to receive a State Pension Contributory (SPC) (subject to paying sufficient PRSI contributions and other criteria that may apply from time to time), in addition to occupational pension.
• Following retirement, pension is increased in line with rises in CPI (Consumer Price Index); if CPI falls, the pension is not reduced.

Yes, there is a qualifying period of two years in order to be entitled to a pension.

Personal benefits build up gradually as separate "referable amounts" money tallies over the course of a member's career, based on the annual application of specified accrual percentages. Accrued and up-rated referable amounts over a complete career are added together to produce the pension and lump sum values on retirement.

For most members these accrual percentages and other details are as follows.

Pension: Accrual rate of 0.58% of pensionable remuneration up to a ceiling of 3.74 X State Pension Contributory (SPC) (currently €45,000, i.e. SPC of €12,017 x 3.74) PLUS (where applicable) 1.25% of pensionable remuneration above that level.

ump sum: Accrual rate of 3.75% of pensionable remuneration.

Example of calculation

In Year 1 a new recruit earns €28,000. This yields a referable amount (a sum-towards-pension) of €162.40 using a 0.58% accrual rate (which applies up to €45,000 salary, above which an accrual rate of 1.25% applies).
Thereafter that €162.40 is indexed to the CPI (All Items).
Assuming 2% inflation annually and 40 years to pension age, the €162.40 will grow to about €359 at retirement.

Amounts towards pension are likewise calculated for all subsequent years of service. These referable amounts accrue, accumulate and are up-rated throughout the member’s career in the public service.

The total of these up-rated annual amounts at pension age constitutes the pension paid in retirement; the lump sum paid on retirement is built up in a similar way based on a 3.75% accrual rate.

Please note: Referable amounts are adjusted annually by reference to increases in CPI (Consumer Price Index) and aggregated referable amounts continue to be up-rated until retirement. If CPI falls, the pension is not reduced.

Members receive an annual benefit statement showing pension/lump sum amounts accrued to date.

Not at present. However, it is expected that paying additional contributions to purchase boosted pension rights will be possible for SPSPS members when the Minister for Public Expenditure and Reform issues enabling regulations in the near future. For individual members, such purchase will require that the member concerned meet the eligibility rules and comply with the conditions that may be imposed (e.g. limits on the amount of benefit that may be purchased).

In ordinary circumstances, minimum pension age of 66 (rising to 67 [2021] and 68 [2028] in line with State Pension age changes). Scheme members must retire at the age of 70. A person can retire on pension from age 55 up to minimum pension age with actuarially reduced benefits.

To the final public service employer.

Personal benefits build up gradually as separate "referable amounts" money tallies over the course of a member's career, based on the annual application of specified accrual percentages. Accrued and up-rated referable amounts over a complete career are added together to produce the pension and lump sum values on retirement.

For most members these accrual percentages and other details are as follows.

Pension: Accrual rate of 0.58% of pensionable remuneration up to a ceiling of 3.74 X State Pension Contributory (SPC) (currently €45,000, i.e. SPC of €12,017 x 3.74) PLUS (where applicable) 1.25% of pensionable remuneration above that level.

Lump sum: Accrual rate of 3.75% of pensionable remuneration.

Example of calculation

In Year 1 a new recruit earns €28,000. This yields a referable amount (a sum-towards-pension) of €162.40 using a 0.58% accrual rate (which applies up to €45,000 salary, above which an accrual rate of 1.25% applies).
Thereafter that €162.40 is indexed to the CPI (All Items).
Assuming 2% inflation annually and 40 years to pension age, the €162.40 will grow to about €359 at retirement.

Amounts towards pension are likewise calculated for all subsequent years of service. These referable amounts accrue, accumulate and are up-rated throughout the member’s career in the public service.

The total of these up-rated annual amounts at pension age constitutes the pension paid in retirement; the lump sum paid on retirement is built up in a similar way based on a 3.75% accrual rate.

Please note: Referable amounts are adjusted annually by reference to increases in CPI (Consumer Price Index) and aggregated referable amounts continue to be up-rated until retirement. If CPI falls, the pension is not reduced.

By transfer to a nominated bank account or similar. The geographical location of the member is irrelevant.

Payment to European Countries/ non-EU countries