Calculation of Pension

Pension Calculation Extended to 2011

The former Minister for Finance, Brian Lenihan, TD, signed the statutory instrument extending to the end of 2011 the current provision whereby the pensions and lump sums of retiring teachers are based on the salary levels in effect in 2009. This is an important and welcome development for those contemplating retirement during 2011.

Calculation of Pension and Lump Sum

This page is applicable only to teachers in service prior to 1 April, 2004 who have not broken service and become 'new entrants' under the terms of DES Circular 10/04 New Entrants to Employment from 1 April 2004:- Raising the minimum pension age to 65. Abolition of the maximum age for retirement.

• Please see the pension calculators below.

Pension and lump sum are calculated on the basis of 'retiring salary'.

'Retiring salary' means, [in relation to a teacher], the sum of -

• the annual rate of scale salary on the last day of pensionable service; and
• the annual rate of any allowance payable on the last day of pensionable service, if:
  • the teacher dies in service more than three years before her/his compulsory retirement date, or
  • the teacher retires on grounds of disability before the earliest date at which s/he would be eligible for pension on voluntary retiral, or
  • the teacher has held the allowance for the last three years of pensionable service, and during that period there has not been an increase or decrease in the allowance payable to her/him due to a change in posts, or a change in the grading of a post, or the gain or loss of an allowance.
• in the case of an allowance to which the provisions of the second clause above do not apply, an amount calculated by dividing by 1095 the annual rate of that allowance and multiplying the result by the number of days on which the teacher held the allowance during the last three years of pensionable service

Compulsory and Voluntary Retirement

Pension is calculated at the rate of one eightieth of retiring salary for each year of pensionable service at the date of retirement subject to a maximum of 40 years. For example, a teacher on a 'retiring salary' of €60,000 with 40 years' contributions to the scheme will receive an annual pension of €30,000 (i.e. 1/80th of €60,000 x 40).

A teacher on the same salary with 35 years' pensionable service will receive an annual pension of €26,250 (i.e. 1/80th of €60,000 x 35).

Pensions are deemed to be income and as such are subject to income tax.

Retired teachers' pensions increase in line with salary increases awarded to serving teachers.

Lump sum is calculated at the rate of three eightieths of retiring salary for each year of pensionable service at the date of retirement subject to a maximum of 40 years. For example a teacher on a retiring salary of €60,000 with 40 years' or more contributions to the scheme will receive a lump sum of €90,000 (i.e. 3/80ths of €60,000 x 40).

A teacher on the same salary with 35 years' pensionable service will receive a lump sum of €78,750 (i.e. 3/80ths of €60,000 x 35).

The lump sum payable on retirement is not subject to income tax.

How to use the calculator

To calculate your gross pension and lump sum, please insert the following 2 pieces of information to the calculator, under the relevant section:

1. Your fortnightly total gross pay which is found on the left hand side of your payslip (don’t forget to use the 2009 salary only, if retiring on or before 29th February 2012).    

2. Your total number of years service, including months/days of a partial year, up to the chosen date of retirement.

Please note, the calculators will give two estimates automatically, one without Supervision Allowance and one with the allowance.