Recruits to the public service since 1995 join an "integrated" pension structure and pay Class A PRSI. This means that their public service pension takes account of their entitlement to the Social Welfare pension. But as a result they also pay a lower contribution to the public service pension structure.
Pre 1995 entrants pay a lower PRSI (Class D) but are not entitled to any Social Welfare pension.
The following example might explain:
- after 40 years service public service pension is 50% of salary (plus a lump sum of 150%)
- for pre 1995's the 50% applies to full salary
- for post 1995's the 50% applies to "pensionable salary", I.e. Salary less 2x Social welfare pension.
So if salary is say €60,000
- the pre 1995 gets €30,000
- the post 1995 gets 50% x (60,000 less 24,000) = €18,000 but then also gets €12,000 SW pension, so a total of 30,000. (Based on a SW pension of €12,000)
The pre 1995 pays a lower PRSI but gets no SW pension. The post 1995 pays a higher (full) PRSI, gets a SW pension but pays a lower contribution to the public service pension structure (in that their contribution is based on Pensionable Salary - €36,000 as above- and not the full salary of €60,000).
I hope this is clear?