As someone who worked on pensions admin and is now getting a supplementary pension after recently retiring, it's fair to say that there is a lot of confusion around this issue in general across the public service, with differing approaches seemingly taken by individual sectors. In some cases, staff may not even be aware of the potential for a supplementary pension when considering their retirement.
Perhaps the problems that have arisen are understandable, considering that the legislation and related rules were drawn up in the early 1990s by people who wouldn't be affected (paid Class B PRSI) and didn’t anticipate the issues that would arise before the significant increase in Class A PRSI staff wanting to retire in advance of their State retirement age. There is a related lack of training/knowledge amongst pension admin staff across the public sector, especially in smaller organisations.
In relation to Notional Service, DPER confirmed that “service acquired via the purchase of notional service scheme, is not counted when calculating a supplementary pension.” So, for Supplementary Pension purposes only, it would involve re-calculating both the co-ordinated pension and pre 1995 pension equivalent, based on actual service only e.g. 35 years only, rather than 40 years that included 5 years purchased with reference to age 60. If you were to reduce only the co-ordinated pension calculation by 5 years’ service, the combined total of the resulting supplementary pension and actual co-ordination pension in payment (with added years), would exceed that of a pre-1995 pension based on 40 years’ service.
The issue of how co-ordinated Pensions and the ‘gross’ value of Supplementary Pensions (i.e. before the value of any social welfare benefit in payment is deducted) are increased to reflect national pay agreements has not really been clarified. However, when raising this some time ago with the Dept that oversaw superannuation admin in our sector, we were advised not to take into account the increased rate of the ‘State Pension’ at the time of the pay award (rather than that used at retirement) when determining a revised co-ordinated Pension, as this could actually result in a ‘reduction’ rather than an increase (this was especially possible in the years when the ‘State Pension’ increased at a higher percentage rate than public service pensions). At the same time, we couldn’t recalculate using the original ‘State Pension’ rate at retirement as this would result in a percentage increase greater than that awarded in the pay agreement (all of the increase would be at the non-co-ordinated rate i.e. 1/80th per year of service). As a result, it was decided to increase both the co-ordinated and ‘gross’ supplementary pensions by the related percentage increase in the value of Pensionable Remuneration only, in the same way as for pre 1995 pensioners. In effect, a 1.5% increase in both the co-ordinated pension and supplementary pension, would equate to a 1.5% increase in the Pre 1995 pension.
One other issue that many don’t know about, is that a ‘gross’ supplementary pension can be paid in full, even if certain Social Welfare benefits are already in payment (i.e. those benefits that someone who paid Class B or D PRSI can qualify for and receive a pre-1995 pension on retirement). A good example of this is the State Widow(er)’s, Surviving Civil Partner’s Contributory Pension. DPER have confirmed this, and in respect of the Widow(er)’s pension, payment of a supplementary pension can be made both before and after State Retirement age, as someone already receiving a full rate Widow(er)'s Pension cannot receive another contributory benefit (e.g. Job Seekers Benefit or State Pension) ‘'through no fault of their own".