Public Sector Pensions

The Irish Public Sector provides employment to around 13% of the Irish workforce. These employees get Public Sector Pensions as part of their employee benefits.  We work closely with the HSE, local government offices, third level education institutions and schools to cater to their employees’ very specific financial needs. There are specificities to the retirement planning and protection of Public Sector employees in every country. It is important to get financial advice from local experts who keep abreast of current changes in legislation and are familiar with public sector schemes in Ireland.

Book Now

Review Your Public Sector Pensions & Benefits

Book a complimentary review with a financial advisor online. We calculate what your take home pay at retirement will be. Review your pensions & investments. Advise on best income protection & life insurance
Book Now

Public Sector Pension Schemes

Public Sector Superannuation rules have been changing over the years resulting in four different “Pension Schemes”. Hence, the date an employee entered public sector service is a determinant of the contributions they pay and the benefits they will receive. However, breaks in service longer than 6 months will render an employee a new entrant when they resume service.

This can result in benefits being accrued in different pension schemes. It is important that public sector employees are clear about their scheme and benefits for best financial planning. We often meet with public sector employees who are not even sure which pension scheme they are in. Often, employees could have breaks in service or received pension contribution refunds.

Public Sector Pensions

Public Sector Pensions – Before 5th April 1995

All Public Sector pensions schemes in Ireland are Defined Benefit, which means that the benefits received are defined and guaranteed based on salary and years of service. Those who joined before April 1995 are on a different scheme to those who joined after. Public sector entrants before 5th April 1995  ‘the old pension scheme’ are independent of the state social benefits and pension. Members of this scheme pay a reduced rate of PRSI – Shown as “Class D” on payslips. However, they will not get the Contributory State Pension. They will receive half of their final salary as a pension from their public sector employer.

One of the services we provide at MadeSimple is securing the State Contributory pension for those who joined pre-1995 and otherwise would not have qualified for it. This has increased our clients’ annual pension benefits by up to €10,000 per annum.

Public Sector Pensions – After 6th April 1995

The rules have been tightened over the years with the rising life expectancy rate and increasing liability of the scheme. For those who joined the public sector from 1995 on, the occupational pension is integrated with the State pension. “Integrated” with social welfare, so pension is less, but it should end up being the same when Contributory State Pension (CSP) is paid. Public Servants employed during this time pay the “A Rate” of PRSI (full PRSI contributions). Therefore, they get the Contributory State Pension based on employment. The relevant department will usually “supplement” the shortfall until Contributory State Pension kicks in (there are conditions around if and when the supplementary pension will be paid).

Basic Benefits of Public Sector Pension Schemes

The public sector superannuation schemes all provide some basic benefits including sick pay, death-in-service benefit, annual pension at retirement and a tax free lump sum. The amount of benefits received by each member are determined by the years of service, salary and retirement age. However, there are some marked differences between the schemes in how benefits are calculated.

Tax Free Lump Sum (TFLS)

All public sector employees in Ireland receive at retirement a Tax Free Lump Sum (FTLS). This lump sum incurs no tax up the amount of €200,000.

Annual Pension

In addition to the FTLS, public sector employees receive a pension at their Normal Retirement Age (NRA). The amount of pension received at retirement is calculated differently for Pre 2004, 2004 – 2012 and Post 2013 Entrants. All four schemes are Defined Benefit Schemes, but the pre 95 is based on final salary only and not integrated with the Irish Contributory State Pension (CSP).

Sick Pay and Ill Health Early Retirement (IHER)

  • Sick pay – 92 days full pay in any year, 91 days half-pay in any year, subject to a maximum of 183 days in any 4 year period.
  • Public Sector Employees who have to pension on IHER receive a pension based on years service and salary. They have to have been a member of the scheme for a minimum of 2 years.

Death-in-Service Benefit

Scheme members receive a Death Gratuity which is paid out similar to a life insurance. Furthermore, the death-in-service benefit provides for a spouse’s pension and children’s pension.

What Does the Financial Planning Review Cover?

We review all your pensions and calculate what your retirement income will look like. Based on that analysis, we can recommend a course of action so you can maximise your benefits. Very few employees we talk to have entered full-time employment from day one and stayed with the same employer for their whole working life. Employees call us worried about old pensions, career breaks, job sharing, working abroad, etc. Things are never straightforward until we produce your free report. This is a fantastic no obligation review of your financial wellbeing.

We find that often employees do not fully understand all the fields on their payslip. This can lead to problems, such as not being on the right salary scale point for public sector employees, or not using all your tax breaks correctly.

Whether you need to protect you family’s future, mortgage or plan for inheritance taxes, it is key to have the right insurance policy for your needs. Furthermore, as part of the report, we will search the market for the best prices out there.

If you have more than 3-6 months pay in your bank account (your emergency fund), you are faced with questions how to use your money wisely. Should you increase your pension contributions, open a savings account for your children’s education, invest in bonds, etc.? The MadeSimple report makes these questions much easier to answer taking into account your tax position and financial objectives.

Step 1

You – Complete a short online application form

Step 2

We – Generate your personal report that outlines your current benefits.

Step 3

Together – We schedule a review online (we use Zoom, or a platform you may suggest) or over the phone to discuss what options are available to you.

Start Now! Book Your Review

After we complete the review, many employees are delighted to have their options regarding pension planning, salary protection, life protection, savings and investments explained to them so clearly. Not only that, but we can also set up policies for you all online in a very fast and efficient manner. 

Get your complimentary, personalised review today! You have nothing to lose!