Pensions and Retirement

Important note: Are you a member of a pre-2013 Teachers’ Pension Scheme and not currently on a contract with a school? In the current circumstances you need to pay close attention to the rule that requires you not to allow more than 26 calendar weeks to pass without making a contribution from salary to your pension scheme. You can only make such a contribution from pay for your work as a teacher: from the DES if in a voluntary or community school or college, or from the ETB if in an ETB school. If you fail to make such a payment you will be entered into the Single Public Service Pension Scheme when you eventually return to teaching. Note: This does not affect teachers who are on an approved leave of absence from their school. Please contact Head Office for further advice if you think you might be affected by this rule
 
Knowing about your pension scheme is important at every stage in a teacher’s career. Decisions you make during your career can have a significant effect on the value of your pension benefits when you come to retire. Your pension is part of your pay as a teacher. It is an essential part of the total financial package that you earn for the work you do. It is, however, a complex part of your benefits package. We will take you through these complexities and the key features of your occupational pension scheme in the following pages. We will signpost where you can go for further support and information on your pension scheme. First of all we need to determine which pension scheme you are a member of:

Three different pension schemes

There are essentially three occupational pension schemes for teachers:

(a) Secondary, Community & Comprehensive Teachers Superannuation Scheme


(b) Education & Training Board Teachers Superannuation Scheme


(c) Single Public Service Pension Scheme

The first two schemes are open to teachers who began their teaching careers prior to 2013, and, with the exception of some minor differences, provide largely the same benefits. These schemes provide a pension and lump sum on retirement which is based on a teacher’s length of service and their final salary on the date they retire. The structure and calculation of pension benefits is also affected by the class of Pay-Related Social Insurance (PRSI) you have paid. Variants of these schemes allow for teachers to retire early at different ages with and without actuarial reductions.

The Secondary, Community & Comprehensive Teachers Superannuation Scheme is operated by the Department of Education & Skills (DES) for teachers paid by them and employed by a school Board of Management. The Education & Training Board Teachers’ Superannuation Scheme is operated by the Education & Training Boards (ETB) for teachers employed and paid by them.

All teachers who first entered the profession since 1st January 2013 are enrolled in the Single Public Service Pension Scheme which applies across the public service. In addition, teachers who return to a Department/ETB-paid teaching post after 1st January 2013 following an unapproved break in service of more than 26 weeks also become members of this new scheme. The 26-week rule does not apply to teachers on approved unpaid leave of absence, e.g. career break, maternity or sick leave. This scheme also provides a pension and lump sum on retirement, but which is broadly based on the average of a teacher’s salary over their career uprated for inflation. This scheme provides a common retirement age but also allows for teachers to retire early with actuarially-reduced benefits.

Which pension scheme am I in?

Your payslip will tell you which pension scheme you are a member of. If you are paid by the Department of Education & Skills the following deductions on the right-hand side of your payslip will say either:

Pensions Grouped
Secondary, Community & Comprehensive Teachers Superannuation Scheme
 
Single Public Service Pension Scheme

If you are paid by an Education & Training Board the following deductions on your payslip will say either:

Superannuation
Education & Training Board Teachers Superannuation Scheme
 
Single Public Service Pension Scheme
 

Secondary, Community & Comprehensive Teachers Superannuation Scheme

The Secondary, Community & Comprehensive Teachers Superannuation Scheme is a “final salary defined benefit scheme”. Scheme members are not dependent for their pension benefits on the performance of anonymous pension fund managers, but have guaranteed benefits on retirement. The value of these benefits is determined by your salary on the day you retire and the length of service you have earned or bought in your pension scheme. Once you know your final salary and your pensionable service, you can calculate your pension benefits. These pension benefits include a fortnightly pension for the rest of your life, a tax-free lump sum and, generally, a survivors’ pension for your spouse or civil partner and qualifying children in the event of your death.

There are, in fact, two different pension arrangements that cover members of this Superannuation Scheme depending on when you joined the teaching profession. The first arrangement covers teachers who joined the scheme before 1st April 2004 and are considered ‘original members’ of this pension scheme. The second arrangement commenced from 1st April 2004 and members of this scheme are referred to as “new entrants” to the scheme. There are different early retirement ages and associated options for these teachers.

 

Education & Training Board Teachers Superannuation Scheme

The Education & Training Board Teachers Superannuation Scheme is a “final salary defined benefit scheme”. Scheme members are not dependent for their pension benefits on the performance of anonymous pension fund managers, but have guaranteed benefits on retirement. The value of these benefits is determined by your salary on the day you retire and the length of service you have earned or bought in your pension scheme. Once you know your final salary and your pensionable service, you can calculate your pension benefits. These pension benefits include a fortnightly pension for the rest of your life, a tax-free lump sum and, generally, a survivors’ pension for your spouse or civil partner and qualifying children in the event of your death.

There are, in fact, two different pension arrangements that cover members of this Superannuation Scheme depending on when you joined the teaching profession. The first arrangement covers teachers who joined the scheme before 1st April 2004 and are considered ‘original members’ of this pension scheme. The second arrangement commenced from 1st April 2004 and members of this scheme are referred to as “new entrants” to the scheme. There are different early retirement ages and associated options for these teachers.

 

Single Public Service Pension Scheme

The Single Public Service Pension Scheme is a defined benefit scheme which applies across the public service. Scheme members are not dependent for their pension benefits on the performance of anonymous pension fund managers, but have guaranteed benefits on retirement. This Pension Scheme is open to teachers who entered the profession since 1st January 2013, and also those teachers who return to teaching after that date having previously left teaching for more than 26 weeks (this does not apply to teachers on an approved leave of absence, e.g. career break, unpaid sick leave or maternity leave).

There are significantly different terms in this scheme compared to the previous teacher-only pension schemes which have a real effect on the value of the pension benefits that a teacher can expect to receive on retirement. The calculation of pension benefits under the pre-2013 pension schemes is based on a teacher’s final salary, typically the point at which a teacher’s salary is at its highest. By contrast, under the new scheme, pensions are based on a teacher’s average salary over their career, which, given the length of the teaching pay scale, will inevitably mean a reduction in the comparative value of pension benefits over the long term.

Members of the Single Public Service Pension Scheme do not generate the pensionable service that members of the pre-2013 Schemes accumulate. Instead, these teachers make two separate contributions to the Pension Scheme every time they receive their salary. These regular payments are called ‘referable amounts’ with one going to build their retirement pension and the other to their retirement lump sum. Every year the value of accrued referable amounts held in the Scheme is uprated by the Consumer Price Index (CPI). Over the course of a teacher’s career these amounts build up and fund the defined pension benefits that the Scheme delivers on retirement. These benefits are co-ordinated with the State Contributory Pension and which is paid in addition to the retirement benefits delivered by your Pension Scheme. The following chart describes how benefits are built up in the Pension Scheme.

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