FAQs on the Pensions Scheme for Teachers in Secondary, Community and Comprehensive Schools
1.Who is eligible for pension benefits under this Scheme?
The following people are eligible to join the Secondary, Community and Comprehensive School Teachers Pension Scheme–
(a) A person appointed since 1 September 2001 who is employed as a teacher or chaplain in a secondary, community or comprehensive school.
(b) A person appointed wholetime or part-time (provided that, in the case of a part-time teacher, he or she was timetabled to teach at least 9 hours a week) between 1 August 1996 and 1 September 2001 and who is a fully qualified teacher in a secondary, community or comprehensive school or is a chaplain in a community or comprehensive school.
(c) A person appointed before 1 August 1996 at the age of at least 21 years and who was–
(i) a secondary teacher registered with the Registration Council, serving in a wholetime post in a secondary school and was receiving remuneration paid by the Department of Education and Skills, or
(ii) serving in a permanent teaching post, or in a post of chaplain, in a comprehensive or community school
2. What are the main benefits?
The main benefits are:
• Retirement pension and lump sum
• Death benefits
• Spouses’ and children’s pensions
Other aspects of pension covered are:
• Actuarially reduced benefits
• Preserved benefits
• Transfer of service
• Purchase of pre-pension scheme service
• Purchase of notional service
• Additional Voluntary Contributions (AVC’s)
• Early retirement benefits
• Income tax treatment of pension
• Divorce or separation
3. How do I join the pension scheme?
Membership of the Scheme is compulsory for each eligible person appointed to a post since 1 March 1996 for the first time or after a break in service.
A person eligible under question 1(c) above who was appointed before 1 March 1996 may choose to join the Scheme provided that he or she has continued in the post without an interruption of service.
4. What contributions do I pay for these benefits?
Each member of the Scheme must pay a contribution for the duration of his or her membership of the Scheme. The contribution comprises 5% of remuneration in the case of a member paying modified (or D rate) PRSI. Where a member is paying full (or A rate) PRSI and is in wholetime service, he or she will pay 3.5% of net remuneration plus 1.5% of remuneration.
Remuneration in any year means the total of basic salary plus pensionable allowances plus supervision and substitution payments payable in that year. Net remuneration means the difference between remuneration and twice the maximum personal rate of State Pension (Contributory). The State Pension (Contributory) is formerly known as the Old Age Contributory Pension.
The contributions payable by a member in part-time service paying full PRSI will differ depending on the period to which the service relates. If the teaching service was before 1 September 2001, he or she will pay 3.5% of net remuneration plus 1.5% of remuneration for that period of service. However, for any service done since 1 September 2001 contributions will be calculated on a pro rata basis. This means that they will be based on notional pensionable remuneration and the part-time attendance pattern expressed as a proportion of wholetime service.
5. Is my Pension Scheme a Defined Benefit or a Defined Contribution Scheme and how is it funded?
Your scheme is a Final Salary Defined Benefit Scheme which gives a pension based on service and final pensionable remuneration (salary, pensionable allowances and supervisions and substitution payment, if appropriate). See question 6 for further information as to how these are calculated and where averaging will apply. The scheme is an unfunded Pay-as-you-go scheme. The amount of pension benefit is defined in the scheme rules and is not affected by investment returns. Scheme benefits are payable from monies voted by the Oireachtas.
6. On what basis are my pension benefits calculated?
On retirement you will be entitled to a pension and lump sum, provided you have a minimum of 2 years actual (ie worked) pensionable service. Pension and lump sum payments are determined by–
- Total pensionable service (based on completed years and days of service subject to a
maximum of 40 years), and - Pensionable remuneration on the last day of service
7. What is pensionable service?
Pensionable service is teaching service in a secondary, community or comprehensive school
which is–
- Permanent and Temporary Wholetime
- Jobsharing
- Certain part-time service
- Transferred service
- Purchased notional service
- Added years/service granted in certain circumstances
- Certain approved leave but subject to certain conditions
- Special leave without pay to work in an Irish Aid programme subject to certain conditions
The way in which part-time service is credited will depend on when the service was given and the status of the part-time service.
Part-time service given since 1 September 2001
All part-time service given since 1 September 2001 is pensionable and there is no minimum number of hours required in order for it to qualify as such. The service is calculated on a pro rata basis compared to wholetime service.
Where the service was given under a regular part-time contract (RPT), the period of the contract will be counted as pensionable service. Where the service was given other than under a regular pert-time contract, the pro rata element is calculated in accordance with the formula - Number of hours worked x 365/735.
Part-time service given between 1 August 1996 and 31 August 2001
All part-time service given in this period under an eligible part-time (EPT) contract is pensionable and is calculated on a pro-rata basis of wholetime service; i.e. - Number of hours contracted to work per week x 365/22
Part-time service given in this period under an EPT contract will be calculated in the following way -
- Where the part-time service in a school year amounts to at least 300 hours, it is calculated in accordance with the formula - Number of hours worked x 365/1148
- Where the part-time service in a school year was less than 300 hours, each week of service in which you gave at least 9 hours will be counted and will then be credited in accordance with the formula - Number of hours worked in qualifying weeks x 365/1148
Part-time service given before 1 August 1996
Part-time service given in this period under an EPT contract will be calculated in the following way–
- Where the teacher was contracted under that contract to teach more than 21 hours per week, he or she will be credited with the equivalent of wholetime service for the period of each contract
- Where the teacher was contracted under that contract to teach 21 hours or less per week, he or she will be credited with half of wholetime service for the period of each contract
Part-time service (other than under an EPT contract) given in this period is credited in the following way–
- Where the teacher worked at least 300 hours in the school year, he or she will be credited with half a year of wholetime service, and
- Where the teacher worked less than 300 hours in the school year, each week of service in which he/ she worked at least 9 hours will be credited as 0.78 of a week of pensionable service
For pension benefit purposes, pensionable service cannot exceed 40 years.
8. What is pensionable remuneration?
Broadly speaking, pensionable remuneration is final pay. For a secondary, community or comprehensive teacher this will comprise retiring salary plus allowances plus supervision and substitution payment.
Allowances will comprise the total of the annual rate of each allowance held by the teacher. However, if a pensionable allowance has not been held during each of the last 3 years immediately before retirement, it will be averaged based on the number of days on which the allowance is held.
The pensionable supervision and substitution payment comprises a payment made to a teacher which is the result of a commitment made to undertake supervision and substitution duties in the school subject to a maximum of 37 hours in the school year. The payment is averaged based on the payment in each of the last 3 years divided by 3. It should be remembered that a teacher who enters into this commitment but who later ceases to meet it will forfeit all pensionability attaching to the payments received. There are limited exceptions to this (eg sick leave, other extenuating circumstances).
There are limited exceptions to the normal averaging rule such as where–
- a teacher dies in service and had at least 3 years potential service before 31 August in the year in which he or she would have reached 65 years of age, or
- a teacher retires on medical grounds before 60 years of age (or 65 years of age in the case of a new entrant) and had at least 3 years potential service before reaching that age
Where these exceptions apply, allowances will not be averaged. The supervision and substitution payment will be averaged, but only over the period in which the payment was made.
9. How are my pension and lump sum calculated?
Subject to a minimum requirement of service (see question 25), pension and lump sum are payable for each year of pensionable service. Since 1 September 2001, all part-time service is calculated on a pro rata basis.
Pension:
In the case of a teacher paying D Rate PRSI, the pension is 1/80th of a teacher’s pensionable remuneration for each year of pensionable service.
In the case of a teacher paying A Rate PRSI, the pension is 1/200th of the pensionable remuneration that does not exceed the maximum personal rate of State Pension (Contributory) multiplied by 3.333333 plus 1/80th of the pensionable remuneration which exceeds that figure for each year of pensionable service. This is known as co-ordinated pension. Where a teacher paying A Rate PRSI retired before 1 January 2004, he or she received 1/80th of his or her net pensionable remuneration for each year of pensionable service.
This is subject to a maximum benefit of ½ of pensionable remuneration.
Lump Sum:
The lump sum is 3/80ths of gross pensionable for each year of pensionable service but subject to a maximum of 120/80ths. This payment is currently tax free up to €200,000.
Example:
Teacher retires with gross pensionable remuneration of PT 8-25, Pass Degree and Pass Diploma 2438, 35 year allowance 2328, B post of responsibility 3776, pensionable remuneration = €68850 and 38 years 29 days service then [(38+29/365) x 68850] / 80x 3 = €98316.38
Preserved benefit:
Teachers entitled to preserved benefits receive a pension and lump sum based on pensionable remuneration at the date of resignation up-rated by the appropriate pay increases between that date and the date of their retirement.
Split pension:
It may be possible for a person who has a break in service to choose between aggregating previous teaching service with service given after the break, or to retain preserved benefits which he or she had before re-entry and to work up a second preserved benefit (effectively what is called a split pension). This can arise in two situations–
- Where a teacher was in service on or before 5 April 1995 and paid modified (or D Rate) PRSI and had a break in service after which he or she would then pay full (or A Rate) PRSI, or
- Where a teacher was in service on or before 1 April 2004 and returned to teaching following a break in service more than 26 weeks later (you are then considered to be a "new entrant")
10. I am job-sharing – how is my pension calculated?
You have your job-sharing service treated on a pro rata basis (i.e. 1 year = 182 days) and the pensionable remuneration is the notional full rate of pay for the job. This means that the period of job-sharing is reckoned pro rata to wholetime pensionable service and the pensionable remuneration is based on the wholetime equivalent pensionable remuneration.
11. Am I paid my pension automatically on retirement?
No. You must apply to the Pensions Section of the Department for your pension. This should be done at least 3 months before the date of your proposed retirement.
12. At what age are benefits payable?
Where a teacher is a new entrant and has a minimum of 2 years’ pensionable service, on retirement benefits are payable to him or her at 65 years of age. "New Entrant" is defined in section 2 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004. Broadly speaking, a new entrant is a person who commences employment in the public service on or after 1 April 2004, or returns to employment on or after that date following a break in public service employment of more than 26 weeks. This broad definition is for general information only and should not be relied on - the Act itself should be consulted when determining whether a person is or is not a new entrant. Where a teacher is not a new entrant and has a minimum of 2 years’ pensionable service, on retirement benefits are payable to him or her–
- at 60 years of age, or
- at 55 years of age provided that the teacher has at least 35 years actual pensionable service. A period shorter than the 35 year requirement may be permitted having regard to the duration of the teacher’s training course completed before entering the profession. Having reached 55 years of age with 4 years of pre-service training i.e. primary degree and higher diploma you can retire with 33 years of actual pensionable service. Having reached 55 years of age with 3 years of pre-service training you can retire with 34 years service. 4 years is the maximum with reference to the standard primary degree and higher diploma. Recognition will not be given where a three year degree took 4 years to complete. For the purposes of this rule a job-sharing year may be counted as a full year. It should be noted that while this preservice training can be taken into account for the purpose of qualifying for retirement at this younger age, it cannot be used to credit service on which benefits will be based. Notional service cannot be used in determining whether a teacher has the 35 years’ service.
| Age Last Birthday | Pension | Lump Sum |
| 50 | 62.4% | 82.2% |
| 51 | 65.1% | 83.9% |
| 52 | 67.9% | 85.5% |
| 53 | 71.0% | 87.2% |
| 54 | 74.3% | 88.9% |
| 55 | 77.8% | 90.7% |
| 56 | 81.6% | 92.4% |
| 57 | 85.7% | 94.3% |
| 58 | 90.1% | 96.1% |
| 59 | 94.8% | 98.0% |
Benefits may be paid before those ages if the person is retiring on medical grounds (see question 16) under the Early Retirement Scheme (see question 31) or by way of cost neutral early retirement (see below). Teachers who leave the school system with preserved benefits receive a pension and lump sum, on application, at age 60 (or 65 in the case of new entrants).
With effect from 1 April 2004, a facility was introduced to allow a member who has a minimum of 2 years' pensionable service to retire from age 50 with immediate, actuarially reduced pension benefits in lieu of preserved benefits at a later date. This is known as cost neutral early retirement. (Please see Circular Letter PEN 07/05). A teacher wishing to avail of this must apply before his or her resignation from the school. It provides greater flexibility to members in terms of retirement planning. The benefits expressed as a % of the Preserved Benefits which would be payable at age 60 to teachers who are not new entrants are:
Benefits payable to new entrants under the cost neutral early retirement facility from age 55 are:
| Age Last Birthday | Pension | Lump Sum |
| 55 | 58.2% | 82.4% |
| 56 | 61.1% | 84% |
| 57 | 64.1% | 85.6% |
| 58 | 67.4% | 87.3% |
| 59 | 71% | 89% |
| 60 | 74.8% | 90.7% |
| 61 | 79% | 92.5% |
| 62 | 83.6% | 94.3% |
| 63 | 88.5% | 96.1% |
| 64 | 94% | 98% |
13. Is my pension increased after I retire?
Increases in teacher pensions are awarded by the Minister for Education and Skills given with the consent of the Minister for Finance under Schemes made in accordance with the pension increase regulations. The application of increases is based on parity which means that, where increases paid to serving teachers are being passed on to pensioners, the pension increases are effective from the same date as the increases being paid to the serving teachers.
In practice, all general increases since 1986 have been passed on to retired teachers on the same basis as to serving teachers. In the case of special pay increases for serving teachers, some are passed on to pensioners, others are not.
Some of the conditions which may have to be met before special pay increases are passed on to pensioners are:
- The increase must apply to all teachers serving in the posts concerned
- Assimilation of serving teachers to the revised pay scales must be on the basis of “corresponding points” (ie not on “starting pay on promotion” or ‘‘re-grading’’ terms)
- The increase must not have been awarded in consequence of a substantial restructuring or alteration of duties which, in effect, constitutes regrading of the posts or grades concerned
- The increase must not have been awarded in respect of increased productivity from serving teachers, and
- The increase must be a permanent feature of the pay scale
In addition, if an allowance becomes pensionable from a particular date, the benefit is not passed on to retired teachers who retired before that date. If a new pensionable allowance is introduced, it does not apply to retired teachers who never held that allowance while serving.
14. Are the benefits reduced if a teacher is re-employed in the school system after compulsory retirement age?
Lump sum payments are not reduced or postponed but pension is reduced to ensure that the total of pay and pension does not exceed the current equivalent of the officer’s pay on the date of retirement. A teacher must inform the Department where he or she has retired on pension and returns to teach or to work in the wider public sector.
15. How are pensions paid?
Pensions are paid fortnightly in arrears by the Department of Education and Science. Before retirement, teachers complete a Pensions Declaration Form. Payment of the pension begins with effect from the day following the last day of paid service. Payments are made direct to the retired teacher’s bank account. Certain deductions may be made from pension if the officer so wishes (eg VHI, subscriptions to retirement associations). The retired teacher must make the appropriate arrangements with the Retired Teachers Payroll Division of the Department.
16. What benefits are payable if I have to retire early on medical grounds?
If a teacher has to retire before 60 years of age because of permanent ill-health, pension and lump sum are paid immediately at retirement if the teacher has more than 5 years pensionable service. The benefits are based on actual service up to the last day of paid service plus, where appropriate, extra years of service known as added years.
If a person has to retire on medical grounds with less than 5 years but more than 2 years pensionable service, the person has a choice of taking a once-off lump sum (known as a short service gratuity) or opting for preserved benefits payable in the normal way at 60 years of age, or 65 years of age in the case of a New Entrant.
A short service gratuity is equal to 1/12th plus 3/80ths of pensionable remuneration for each year of actual pensionable service. Where a teacher has less than 2 years service, the amount of the gratuity will be 1/12th of pensionable remuneration for each year of service.
17. What benefits apply if I die in service?
On production of probate or letters of administration, a death gratuity is payable to the teacher’s personal representative (i.e. the executor named in the will or the administrator where a person dies without a will). It is the greater of–
- One year’s pensionable remuneration (at the rate applicable at the teacher’s death); or
- The amount of lump sum that would have been payable had the teacher retired on medical grounds at the date of death, subject to a maximum of 1½ times the teacher’s pensionable remuneration at the date of death
There is no minimum service requirement but a grant of probate is required in all cases before a benefit can be paid.
If the teacher is a member of the Spouses’ and Children’s Contributory Pension Scheme, an amount equal to the month’s pay will be paid to the spouse for the first month after death. Thereafter spouses’ and children’s pensions will be payable based on the deceased teacher’s potential service to compulsory retirement age (or 65 in the case of new entrants), subject to a maximum of 40 years. There is an appropriate deduction made from the Death Gratuity in respect of this additional notional service (see question 24 below).
18. What benefits apply on death after retirement?
If at the time of death the total pension received since retirement, together with the amount of the gross retirement lump sum, comes to less than one year’s pensionable remuneration at the date of retirement, a balancing gratuity sufficient to bring the total up to the equivalent of one year’s pensionable remuneration is payable to the teacher’s personal representative. This does not apply in the case of people who are paid a preserved pension. Spouses’ and Children’s benefits are also payable where appropriate (see question 20 below).
19. What benefits apply on departure from teaching otherwise than on age or ill-health retirement?
On voluntary resignation from teaching before reaching 60 years of age (or 65 years of age in the case of a new entrant) a teacher has the following options–
a. Transfer:
Transfer accrued pension rights to an approved organisation (question 27), or
b. Preserved Benefits:
If the teacher has at least 2 years’ pensionable service, he or she may on application at age 60 (or 65 in the case of a new entrant) be paid preserved benefits (question 25), or
c. Retirement from age 55 onwards:
Retirement benefits may be payable provided a teacher is not a New Entrant and has at least 35 years actual pensionable service at 55 years of age. (See question 12)
d. Actuarially Reduced Benefits:
20. What is the Spouses’ and Children’s Contributory Pension Scheme?
This is a contributory scheme, membership of which is compulsory for men appointed on or after 1 January 1969 and women appointed on or after 1 June 1981. Men and women serving prior to the relevant dates were given options to join the scheme.
The original scheme provides pensions for the spouse and/or dependent children of a member or dependent marital children of a member who dies in service, or after qualifying for pension or preserved pension. It does not provide pensions for spouses of marriages occurring after retirement or children resulting from such marriages. A further option was given to all officers on 1 April 2004 to join the “revised spouses’ and children’s scheme”. This covers the spouses of post-retirement marriages and all the teacher’s children.
If you are unsure whether you are covered for Spouses’ and Children’s benefits or which Scheme you may be a member of, then you can check with Pensions Section of the DES.
21. How is the spouse’s pension calculated?
When a member dies after retirement a spouse’s pension of ½ the former member’s pension is payable, it will be a little more than 1/2 where the former member was in receipt of a co-ordinated pension. (A teacher who has on-going liability for Class A rate PRSI is liable for an on-going coordinated superannuation contribution of 3% of pensionable remuneration and 3.5% of net pensionable remuneration).
Benefits payable under spouses and children's pension schemes will be affected by a decision to accept Cost Neutral Early Retirement in lieu of preserved benefits i.e. any benefits payable under the spouses and children's pension schemes to survivors of early retirees will be the same as those payable to survivors of teachers who opt for preservation of benefits.
Where a member dies in service or following retirement on grounds of ill-health, the spouse’s pension is based on the service that the member would have had if he or she had served to compulsory retirement age subject to a maximum of 40 years. The spouse’s pension is payable in addition to any entitlements payable under the Social Welfare Code.
22. What children are eligible for pensions?
Dependent children under the age of 16 or age 22 if in full time education are eligible. Where such a child is permanently incapacitated by reason of mental or physical infirmity from maintaining him or herself there is no age limit provided the infirmity was there from birth or arose while the child was eligible for benefit.
23. How much is a child’s pension?
A child’s pension is 1/3 of the spouse’s pension for each of the first three eligible children. If there are more than three eligible children than an amount equal to the spouse’s pension is divided between them.
Where both spouses are deceased and there is only one eligible child the amount of pension is 2/3 of the deceased spouse’s pension. Where there are two or more eligible children then an amount equal to the deceased spouse’s pension is divided equally between them.
A spouse’s pension along with children’s pensions can bring the total amount payable up to the level of the deceased person’s pension.
24. Do I pay for the Spouses' pension?
Periodic deductions of 1.5% of remuneration are made during a teacher’s working life. In addition, a single deduction of 1% of pensionable remuneration is made from the retirement lump sum or death gratuity, as appropriate, in respect of each year of pensionable service for which periodic contributions have not been made. This includes a deduction for any pre-scheme service and any potential service which is reckonable to compulsory retirement age credited for the spouse’s pension (see above). It is possible, in certain circumstances, to reduce the amount of this lump sum deduction by making additional periodic contributions during service.
Under the original Spouses' and Children's Scheme, if you have never been married during your time as a teacher, all contributions will be refunded on retirement or death in service. If you are unmarried following the death of your spouse, the amount to be refunded, if any, will depend on when your pensionable service began.
Where a teacher chose not to be a member of the original scheme but joined the revised scheme, the periodic deductions are 2% of remuneration and the single deduction at retirement or death will be 1.5% pensionable remuneration.
Unlike the main pension scheme, a teacher is only liable to pay contributions into the Spouses’ and Children’s Scheme for 40 years’ service. Where a teacher has overpaid contributions to the Spouses’ and Children’s Scheme, thee contributions for the earliest years will be refunded.
25. Who benefits from preserved entitlements?
Any teacher who resigned before age 60 with a minimum of 5 years’ pensionable service if the resignation was between 1 July 1977 and before 2 June 2002, or who has 2 years pensionable service if it was since 2 June 2002 is entitled to a preserved pension and lump sum payable, on application, at age 60 (or 65 in the case of a new entrant). The pension is based on pensionable service and pensionable remuneration at the date of resignation, uprated by the appropriate pay increases between that date and the teacher’s 60th birthday. Alternatively, the resigning teacher may opt for actuarially reduced benefits if resigning after age 50 (see question 12).
Where a former teacher with an entitlement to preserved benefits dies before age 60 (65 in the case of a new entrant) a death gratuity, equal to the preserved lump sum is payable. Where such a former teacher was a member of the Spouses' and Children’s Scheme and leaves an eligible spouse and/or eligible children, then a spouse’s pension and/or children’s pension(s), based on the member’s pensionable pensionable service only are payable. There is no addition of notional years in respect of potential service to age 65. Preserved pension rights for spouses’ and children’s benefits become effective on the death of the (former) scheme member (question 20).
26. What are added years?
Notional service or added years may be awarded in certain exceptional cases:-
• On retirement on medical grounds: Question 16
• On retirement under the Early Retirement Scheme
27. What are the arrangements for the transfer of pensionable service?
The Transfer Scheme enables teachers to transfer pensionable service within different pension schemes within the education system and with the majority of State and semi-state organisations (eg the Garda Síochána, the Defence Forces, Health Services, etc). A list of the “transfer network” organisations is available by clicking here.
Teachers should notify Pensions Section of any previous employment in the public service and teachers resigning should state the name of their prospective employer (if any) so that pensionable service can be transferred, if appropriate.
In addition, the Department will accept transfer values from a private pension fund provided that certain requirements are met. Further information is available from the Pensions Section.
28. Can I purchase service given before my membership of the Scheme commenced?
Please see PCW Circular (26/97).
A teacher who has teaching service which was not in the past pensionable but is now may apply to have this prior service made pensionable. In the case of any part-time service to be purchased, it is subject to the minimum thresholds stated under question 7. The rules will depend on whether the service was given as a qualified or unqualified teacher.
Qualified Service:
A teacher who was in service on 1 August 1996 may buy previous service given as a fully qualified teacher when he or she was not a member of the scheme. The teacher must buy at least 5 years’ wholetime service or, if the non-pensionable whole-time service he or she has is less than 5 years, then he or she must purchase all of it. A teacher cannot purchase part-time service unless all wholetime service is also being purchased. Once any whole-time service has been purchased, the teacher is free to buy whatever amount of part-time service. A teacher must apply within 12 months of becoming a member of the Scheme or at the time of his or her retirement. Only service which can be verified will be credited. The contribution payable to purchase this service is 1.5% of remuneration plus 5% of net remuneration in the case of members of the spouse’s and children’s schemes. Where a teacher is not a member of these schemes, the rate is 3.5% of net remuneration.
Unqualified Service:
A teacher in service on or after 1 September 2001 may seek to have made pensionable unqualified (including substitute) service given by him whether before or after that date. This service must be verified and does not include service required to be given as part of the Higher Diploma.
29. What is the Notional Service Purchase Scheme?
The scheme for the purchase of notional service allows teachers who would have less than 40 years pensionable service at 60 or 65 years of age (65 years of age only in the case of a new entrant), and who fulfil certain other conditions to purchase additional pensionable
service at full actuarial cost. This must be done by way of written application. The additional service purchased is treated as actual service in calculating pension and lump sum entitlements, including spouses’ and children’s benefits.
Payment may be made by a lump sum payment once in any calendar year or by periodic deductions from pay. Periodic contributions begin on the person’s birthday at any age up to 2 years before 60 or 65 years of age. Purchase rates depend on age at commencement of purchase. Contributions are normally allowable against income tax in the same way as contributions to the spouses’ and children’s scheme, subject to the rules, including limits, set by the Revenue Commissioners.
If you opt to purchase service by periodic contributions, please note that if you leave before the age at which you have agreed to purchase service until or you cease to make the periodic payments the amount of added years you will have purchased at retirement will be less than the amount you contracted to purchase initially. This will reduce your benefits. In addition, where a teacher who is not a new entrant and who is purchasing notional service by reference to age 65 chooses to avail of cost neutral early retirement, the notional service reduction factors will first be applied and then the cost neutral reduction factors (see question 12) would be applied. This is to reflect the fact that retirement is taking place before the age of 60 years.
Where a teacher opts to purchase by way of lump sum, payment must be made before retirement. In addition, it is not possible to purchase by way of lump sum by reference to age 60 where a teacher is over 60 years of age.
Teachers on career break can choose to reckon this period by purchasing it by way of notional service at the normal rates applicable. Teachers intending to purchase notional service to meet shortfall of career break should apply in writing prior to going on career break. In the case of a person who, having entered into a contract to purchase notional service, then takes unpaid leave, he or she may reckon this service by purchasing it by way of lump sum at retirement or within 6 months of return to duty, or can double up on his or her periodic payments for a period equivalent to the period of leave.
Information on the appropriate rates applicable is available from the Pensions Section.
30. What are AVCs?
Additional Voluntary Contribution (AVC) schemes are a facility available to teachers through their unions/ staff associations which allow them to enhance their pension benefits at their own expense, as permitted by the Revenue Commissioners. AVCs are essentially a private arrangement between the individual and a private sector pension provider. The benefit is generally in the form of an additional cash amount of pension or lump sum rather than the additional notional years of service under the purchase scheme. The cash benefit is ultimately dependent on the performance of the fund in which the AVC contributions are invested. Contributions are allowable against income tax, subject to Revenue rules. If you intend to use your AVC you must inform the Pensions Section prior to retirement.
Transfers may not be affected after the payment of pension benefits.
It may also be possible to transfer the value of an AVC to the Secondary, Community and Comprehensive School Teachers Pension Scheme in order to purchase notional service. Further information on the conditions attaching to this are available from the Pensions Section.
31. How are benefits and contributions treated for income tax purposes?
Under the current rules, the retirement lump sum, death gratuity or balancing gratuity (if appropriate) are not subject to income tax. The retirement lump sum is subject to tax if it exceeds €200,000. Pensions are subject to income tax in the normal way.
Contributions for personal benefits, Spouses’ and Children’s Contributory Pension Scheme and Purchase Scheme contributions would normally qualify for income tax relief, subject to Revenue Commissioners threshold.
32. What happens to my pension if I get divorced or separated?
Your pension will only be affected by divorce or judicial separation if there is a Pensions Adjustment Order (PAO) in force apportioning some of the pension entitlements to the spouse or dependent children. Death gratuity and spouses’ pension entitlements may also be affected by a PAO. Where there is no PAO then benefits will be payable in accordance with the rules of the scheme. Arrangements for making PAOs are primarily matters for the parties to the legal proceedings and the Courts. If you require information for family law purposes you should apply in writing to the Pensions Section.
33. Where can I get more information?
Further information on the Secondary Teacher's Pension Scheme can be obtained in the form of Circulars and the Statutory Instrument which governs the Scheme which is located on the Department of Education & Skills website.