BENEFITS


The following sections apply to teachers in service prior to 1 January 2013 only. Teachers who commenced service on or after the 1st January 2013, or who have resumed service since then after a period of 26 weeks (other than approved leave) should refer to information within the Public Service Pension (Single Scheme) Act of 2012. Click here for short summary

 

For teachers in service prior to 1 January 2013 there are two categories applicable, old entrants and new entrants:

Old Entrants: Teachers who entered service prior to 1st April 2004 and have not had a break in service (other than approved leave).

New Entrants: Teachers who entered service on or after the 1st April 2004, or who have resumed service since then, after a period of 26 weeks (other than approved leave).

 

Pension Scheme Benefit Summary (applicable to old and new entrants)

Teachers contributing 5% of gross salary and allowances to the Primary School Teachers’ Pension Scheme are providing for one of the following:

  • payment of a pension and lump sum on retirement; or
  • payment of a disability pension and lump sum in the case of early retirement on the grounds of ill-health; or
  • payment of a lump sum to the estate of a teacher who dies in service (death gratuity); or
  • entitlement, in certain circumstances, to a deferred pension and lump sum at age 60/65; or
  • entitlement to transfer pension rights to an organization participating in the Transfer Scheme.

Membership of the Spouses’ and Children’s Pension Scheme provides for an additional benefit:

  • the payment of a pension to a surviving spouse and/or eligible children following death (either in service or following retirement). Click herefor further information on this item.

Please note: The Pension Related Deduction (PRD) is a government levy and is not a contribution to the pension scheme. 

 

Compulsory Retirement (Old entrants) 

Pension and lump sum are paid to a teacher when s/he retires on compulsory grounds, i.e. on reaching the age of 65 years.

Teachers who came into the service since 1 September 1979 are required to retire on 31 August following their 65th birthday.

However, teachers in service on 31 August 1979 whose 65th birthday falls in the months of July or August may continue teaching up to the end of the school year following their 66th birthday.

Teachers who are due to retire on compulsory grounds are not required to give three months’ notice to their boards of management. However, most teachers do notify their boards of management of their intention to retire.

 

Voluntary Retirement (Old entrants)

  • Teachers may retire voluntarily and be awarded a pension and lump sum provided they have given the required number of years of pensionable service based on their pre-service training and have also reached the age of 55 years. The pensionable service requirement for the completed pre-service training is as follows: 2 years training = 35 years’ service; 3 years training = 34 years’ service; 4 years or  more = 33 years’ service. (Please note, no “added years” are given for completing 3 or more years pre-service training.)
  • Teachers who have given at least five years of pensionable service may retire, with a pension and lump sum on or after reaching their 60th birthday.
  • Teachers seeking to retire who do not meet the criteria above will retire under the terms of a Cost Neutral Early Retirement (Click herefor further information on Cost Neutral Early Retirement).
  • Teachers who retire voluntarily are required by the terms of their contracts to give three months’ notice to the board of management and one month’s notice to the Inspector.

 

Voluntary Retirement (New entrants)

Voluntary retirement options are no longer available for this group of teachers other than Cost Neutral Early Retirement (Click here for further information on Cost Neutral Early Retirement). Furthermore, they are not obliged to retire on age grounds. See Section 2 of the Public Service Superannuation (Misc. Provisions) Act, 2004. See also DES Circular 10/04.

 

Preserved Benefits (applicable to old and new entrants)

The following is a summary of the scheme of preserved pension benefits:

  • If a national teacher resigns voluntarily from the service, but without immediate entitlement to a pension and lump sum, s/he may preserve her/his pension rights provided s/he has at least two years of pensionable service. This means that if pension contributions are not withdrawn, an annual pension and lump sum will become payable when the teacher reaches 60/65* years of age following application to the Department of Education and Skills.
  • Pension and lump sum will be calculated as for compulsory and voluntary retirement. Furthermore, for calculation purposes, retiring salary will be determined with reference to the salary scales in operation at the time the teacher reaches 60/65 years of age.
  • Preserved benefit applies only where some pensionable teaching service is given after 30 June 1977. Teachers who are entitled to a preserved pension and lump sum should apply three months prior to their 60/65th birthday, to the Department of Education and Skills to claim benefit.
  • Where a teacher, having left the service with entitlement to preserved benefits dies before reaching 60/65 years of age, a preserved death gratuity is payable to her/his legal personal representative on application to the Department. Letters of Administration or Grant of Probate of Will must be produced. The preserved death gratuity will be based on the teacher’s pensionable service only (i.e. the minimum of one year’s annual salary that applies in the case of death in service will not apply). For calculation purposes ‘retiring salary’ is updated to its equivalent value at the date of the teacher’s death.
  • Should the teacher have been a member of the Spouses’ and Children’s Pension Scheme, benefit may be payable in accordance with the terms of the scheme. The spouse’s and/or children’s pension will be based on the teacher’s actual pensionable service only.

*Due to the adoption of Circular 10/04 the superannuation terms for new entrants to the public service appointed on or after 1 April 2004 altered the retirement age/preserved benefits to age 65 only. 

 

CALCULATION OF PENSION

Calculation of Pension and Lump Sum

This page is applicable only to teachers in service prior 6 April 1995 i.e. Class D PRSI. Teachers who started teaching after this date, or who resigned their posts and subsequently returned to teaching on Class A PRSI, should contact refer to the section below. 

Pension and lump sum are calculated on the basis of ‘retiring salary’.

‘Retiring salary’ means, (in relation to a teacher), the sum of:

  • the annual rate of scale salary on the last day of pensionable service; and
  • the annual rate of any allowance payable on the last day of pensionable service, if:
    • the teacher dies in service more than three years before her/his compulsory retirement date, or
    • the teacher retires on grounds of disability before the earliest date at which s/he would be eligible for pension on voluntary retiral, or
    • the teacher has held the allowance for the last three years of pensionable service, and during that period there has not been an increase or decrease in the allowance payable to her/him due to a change in posts, or a change in the grading of a post, or the gain or loss of an allowance.
  • in the case of an allowance to which the provisions of the second clause above do not apply, an amount calculated by dividing by 1095 the annual rate of that allowance and multiplying the result by the number of days on which the teacher held the allowance during the last three years of pensionable service.

Compulsory and Voluntary Retirement

Pension is calculated at the rate of one eightieth of retiring salary for each year of pensionable service at the date of retirement subject to a maximum of 40 years. For example, a teacher on a ‘retiring salary’ of €60,000 with 40 years’ contributions to the scheme will receive an annual pension of €30,000 (i.e. 1/80th of €60,000 x 40).

A teacher on the same salary with 35 years’ pensionable service will receive an annual pension of €26,250 (i.e. 1/80th of €60,000 x 35).

Pensions are deemed to be income and as such are subject to income tax.

Historically, retired teachers’ pensions increase in line with salary increases awarded to serving teachers.

Lump sum is calculated at the rate of three eightieths of retiring salary for each year of pensionable service at the date of retirement subject to a maximum of 40 years. For example a teacher on a retiring salary of €60,000 with 40 years’ or more contributions to the scheme will receive a lump sum of €90,000 (i.e. 3/80ths of €60,000 x 40).

A teacher on the same salary with 35 years’ pensionable service will receive a lump sum of €78,750 (i.e. 3/80ths of €60,000 x 35).

The lump sum payable to teachers on retirement is not subject to income tax, since such  tax is only payable on lump sums which exceed €200,000.


CONTRIBUTIONS

The following sections are applicable only to teachers in service prior to 1 Janurary, 2013 who have not broken service or become “single” scheme members under the terms of Circular 07/2013.

A teacher is in pensionable employment if s/he is employed in a permanent or temporary capacity in a national school. The DES has also commenced the deduction of pension contributions for substitute service from January 1, 2005.

Substitute service prior to 1 January 2005,  may be credited for pension purposes following the payment by the teacher of superannuation contributions in respect of such previous service.

The Primary School Teachers’ Pension Scheme is a contributory scheme. The basic average superannuation contribution is 5% of gross salary and allowances. Teachers who are members of the Spouses’ and Children’s Pension Scheme pay an additional contribution of 1.5% of gross salary and allowances.

Membership of the Spouses’ and Children’s Scheme determines what happens a teacher’s pension following her/his death either in service or after retirement. All teachers are not members of the Spouses’ and Children’s Scheme. Membership of this scheme has been compulsory for all male teachers appointed in a permanent or temporary capacity since 1 July 1969. Membership of the scheme is compulsory for all female national school teachers appointed in a permanent or temporary capacity on or after 1 June 1981. 

However, teachers in service prior to these dates – 1 July 1969 (men), 1 June 1981 (women) – were given the opportunity of opting out of the scheme. Members who opted out of the scheme continue to pay contributions at an average rate of 5% of gross salary for the general pension scheme.

Teachers who opted out of the Spouses’ and Children’s Pension Scheme are not covered for benefit under the terms of the scheme. 

Revised Spouses’ and Children’s Pension Scheme

Click here to link to DES circular PEN 14/05 Revision of the Spouses’ and Children’s Pension Scheme Option to join the Revised Scheme

A revised option to join the Spouses’ and Children’s Pension Scheme was extended to the women who opted out of the scheme at the time of the original option in 1981. (The scheme became compulsory for all women who commenced teaching since 1 November 1981).

The DES confirmed to the INTO that all primary (and secondary) teachers in service on or after 1 April 2004 had the option to join the Revised Spouses’ and Children’s Pension Scheme.

The contribution rate that applied to the revised offer was as follows:

  • Periodic Contributions: 2% of salary;
  • Deductions in respect of service prior to joining the scheme: 1.5% of final salary per outstanding year.

In summary, teachers either pay either 5% or 6.5% (members of the Spouses’ and Children’s scheme) of gross salary and allowances in pension contributions.