Public / civil servants pensions - what deductions apply

Quick question:

In relation to a civil servant due to retire in a few months' time, am I right in saying that:

(a) Pension contributions are based on earnings prior to the application of the Pension Related Deduction (PRD)
(b) Benefits are based on earnings after the PRD has been taken from earnings
(c) Post retirement, depending on the pension amount, a further deduction may apply to pensions in payment (PSPR)

(a) is correct.


(b) is incorrect.

The gross wage is used to calculate the two pension benefits

Thanks Protocol

See link below - it's the source of my original post

http://www.per.gov.ie/en/faq-documents/

Am I reading Q5 of first FAQ document the wrong way?

Can someone explain why the Public Service Pension Reduction (PSPR) is different for those who retired on or before 29 Feb 2012 and those who retired subsequently please?

incentivised early retirement scheme If you went before scheme ended.Google and you will find it.

Fempi (2) 2009 introduced an across the board pay cut to public service pay scales. It was a sliding scale of cuts but with an overall average of 6.5%. This cut was in addition to the PRD.

There was a grace period during which pension calculations were based on pre-cut salaries. This period was extended several times. I think the change in the PSPR after 2012 reflects the ending of this grace period (ie, a lesser PSPR reflecting the calculation of the pension on a lesser salary).

Thanks Early Riser - that's the bit I was missing - all clear as mud now!

Just to be clear, the grace period is still in force and any changes in PSPR reflect slight movements in pay restoration. Grace period in force until June 2019, I think, at the moment.

Slim said:

Just to be clear, the grace period is still in force and any changes in PSPR reflect slight movements in pay restoration. Grace period in force until June 2019, I think, at the moment.

Click to expand...

Slim, the whole thing is so murky. There is indeed a "grace period" still in operation and due to end sometime in 2019 (April, I thought?). However, my understanding is that this "grace period" was introduced under the 2013 FEMPI Act which provided for further cuts in pay scales from 1st July 2013 (at certain higher levels - above €65000 ?). This grace period allows people to have pensions calculated on the scales that applied prior to July 2013. It was originally supposed to be in operation for only about one year or so but was extended as part of Lansdowne Road (FEMPI 2015) - which also introduced slight movements in pay restoration.

However, it is still my understanding that the "grace period" relating to the Fempi 2009 Act, which introduced across the board cuts from 2010, expired as of end of February 2012. Retirees up to then could retire on the basis of pre 2010 rates. Hence the change in PSPR in post 2012 pensions.

Maybe we should refer to them as "GRACE 1" and "GRACE 2" ?

Please correct me if I am wrong in all of this. I refer to some documents :

http://www.per.gov.ie/en/extension-of-retirement-grace-period-for-pensions-3/

Early Riser, you are correct in all aspects. The date for the Grace Period is 1 April, 2019. In the OP's case, retiring this year on pension below €39,000, it will be exempt from PSPR, €39,000 - €60,000= 2% PSPR, €60,000-€100,000=5%, >€100,000=8%.

The effect of all of this complex circularising etc is supposed to make the cuts equal no matter when you have or do retire. It's tough reading!

Serving public servants earning over €65K received an increase from 1 April 2017. However pensioners ( related to that pay) did not. Does this mean the link between pay and pension increases is broken?

boltownes said:

Serving public servants earning over €65K received an increase from 1 April 2017. However pensioners ( related to that pay) did not. Does this mean the link between pay and pension increases is broken?

Click to expand...

From PSEU FAQ document:

Will the rise in annual salary rates on 1st September 2017 be included in my pension calculation?

Pensions are calculated with reference to you final pensionable salary. Therefore, as your salary
scale will increase by €1,000 on September 1st 2017, this will be included in your pension calculation
if you retire from that date on.

If you have already retired by this time, the answer is not so straight forward. While traditionally
there has been a link between pay increases to serving staff and pension increases for those in
receipt of a pension, it is not clear whether the Government intend on retaining this link.
Legislation introduced in recent years allows the Government to make increases in line with the
Consumer Price Index. This, however, is simply one choice that will be open to a given Government
when considering how to effect public Sector Pension increases for those already retired.
The retention of the ‘link’ will be a matter for the Government of the day.

From IMPACT :

The PSC will pursue this in the negotiations on a successor to the LRA, which are expected to begin in the first half of this year*. In the meantime, the PSC will liaise with the representatives of the Alliance of Retired Public Servants.

*I believe these negotiations are imminent?