For all public servants who are fully insured (Class A PRSI) and who have been appointed before 1 January 2013 (introduction of Single Scheme) pension payment comprises of three components:
1. Public Service Occupational Pension payable by the public service employer from Voted expenditure, the calculation of which takes account of Social Insurance benefits that may be payable to the individual,
2. Social Insurance Benefit(s) (Jobseeker’s Benefit, State Pension Contributory (SPC) etc.), payable, subject to eligibility, by the Department of Social Protection (DSP) from the Social Insurance Fund and
3. Where the full rate of SPC is not payable, a supplementary pension equivalent to a non-integrated pension i.e. a pension based on 1/80th per year of service to max of 40 years, referred as an ‘Occupational Supplementary Pension’, which is payable, subject to eligibility, by the public service employer from Voted expenditure.
This approach is often referred to as an ‘integrated’ pension, as it takes into account the fact that employees are fully socially insured and includes the value of the social insurance benefit(s) in the total value of the pension. This is to prevent “double pensioning” where both an occupational public service pension and the SPC would be payable.
Integration/Coordination
A significant number of occupational pension schemes (both private and public sector) make an allowance for the State Pension when providing a pension from the scheme. This is known as ‘integration’, also sometimes referred to as 'coordination'.
An integrated scheme looks at the State Pension as part of the total pension package promised to employees on retirement. One reason for this is that both employers and employees make PRSI contributions and these, in turn, entitle scheme members to Social Welfare benefits, including the State Pension Contributory.
Integration is used as a means of taking into account the benefits payable under the Social Welfare system to calculate:
• the amount of pension payable from a pension scheme, so that the combined pension from both sources (State pension and occupational pension) is at the level being aimed for in the scheme's design; and
• the level of contributions payable by the employee towards the cost of their occupational pension, so that the contributions payable to an occupational pension scheme reflect the offset from scheme benefits to allow for the State pension.
Typically this is achieved by using an offset from salary in respect of the State Pension and calculating pension benefits and contributions based on this lower 'pensionable salary'. In public service pension schemes, the offset is calculated at the time of retirement based on the rate of “pensionable remuneration” and the rate of SPC at that time.
Occupational Supplementary Pension
Where a Public Servant retires before State Pension age (for example because they have an entitlement to retire from age 60 or in the case of Gardaí, Defence Forces, Prison Officers etc. to retire from age 50/55 and must retire at age 60) they may be entitled to an occupational supplementary pension subject to meeting certain criteria. This supplementary pension is designed to give eligible members not in receipt of the contributory state pensions or other relevant social welfare supports pension benefits equivalent to those they would have received if integration had not applied to their occupational pension.
The occupational supplementary pension is not paid automatically; the public service pensioner must apply for an occupational supplementary pension. The public service pensioner must have reached minimum pension age in accordance with their pension scheme rules and be in receipt of their occupational pension. In addition, the grant of an occupational supplementary pension is conditional upon a number criteria as follows:
1. The individual must not be engaged in full time paid employment;
2. The individual must not qualify for social insurance benefit or fail to qualify for such benefit at the maximum rate; and
3. The failure to qualify for a social insurance benefit must be due to causes outside his or her control.
The second condition is important to ensure no duplication of payments from public funds. To verify this condition, prior to payment of the occupational supplementary pension, a retired public servant must engage with the Department of Social Protection and obtain proof that they have exhausted any relevant benefits for which they may be eligible under the social insurance system.
My Department is aware of the issues have been raised previously with regard to the current procedure for applying for supplementary pensions, and is actively engaging with stakeholders to develop a more streamlined administrative process.
