Fourth phase of pension restoration: 1/1/’19
Up to 80% of retired public servants are no longer subject to the Public Service Pension Reduction [PSPR] which was first introduced on 1 Jan 2011. This arises because of the phased reversal of the cuts on 1 Jan 2016, 1 Jan 2017 and 1 Jan 2018. At this point retired teachers no longer impacted by the levy include:
• all teachers who have retired since 1 March 2012; and
• teachers who retired prior to 1 March 2012 with pensions up to €34,132.
It follows that those who are still subject to the levy are those who retired prior to 1 March 2012 and whose pensions are over €34,132. Teachers in this cohort continue to pay a levy of 12% on the amount of annual pension greater than €30k. However, a 4th phase of pension restoration is set to commence on 1 Jan 2019. This will see the exemption threshold raised to €39k i.e.the 12% levy will apply tot he amount of annual pension greater than €39k. Retired teachers who have pensions up to this amount will see a further €1,080 restored to their pensions during 2019.(This will bring the total restoration for this cohort of retirees to €2,760 i.e. €400 in 2016, €500 in 2017, €780 in 2018 and €1,080 in 2019*). The remaining small number of retired teachers with pensions over €39k (and who retired prior to 1 March 2012) will eventually receive full restoration on 1 January 2020 when the exemption threshold is raised to €54k. [*Some teachers on lower pension may not have been subject to the full impact of the pension reduction. Where that occurs, the amount restored will be capped at what was lost.
Retired since 1 March 2012: Since 1 Jan 2018, PSPR only applies to pensions over €60k.