12th December 2019
Minimum Value of €250 per annum for members
In negotiating the PSSA (Public Sector Stability Agreement), INTO and other unions secured reductions to the Additional Superannuation Contribution (ASC) which is payable by public servants. The latest such reduction becomes effective from 1 January 2020 and is the subject of DES Circular 0072/2019.
How do reductions in the ASC benefit me?
There is an annual earnings threshold below which no ASC is paid. From January 1 2020, this threshold increases from its current €32,000 to €34,500. Therefore, €2,500 less income is exposed to the 10% ASC charge. This means that you pay €250 (€2,500 X 10%) less ASC in 2020 than you did in 2019.
Whose benefit is greater than €250?
Those who started teaching since 1 January 2013 are in the Single Pension Scheme, which is based on career earnings. To recognise the reduced value of such pensions, INTO and other unions secured a rate reduction (in addition to the above increase in threshold) for these members. The annual rate of ASC – from the threshold up to €60,000 earnings – was 6.66% for Single Scheme members in 2019; in 2020 this rate will be 3.33%.
- Teacher in pre-2013 Pension Scheme (Teacher Schemes – regardless of her/his income): Increase of threshold is worth €250 gross per annum reflected in payslip in a lower ASC contribution.
- Teacher in Single Scheme (post-1 Jan 2013 entrant): Value of €250 (regardless of income) due to increase in threshold with additional benefit from rate reduction, this benefit increasing with earnings, e.g.
Teacher A on point 3 of scale (€40,192) has a total annual gross benefit of €356 due to the threshold adjustment and rate reduction.
Teacher B on point 9 of scale (€47,717) has a total annual gross benefit of €607 due to the threshold adjustment and rate reduction.
The agreement states that ASC underpins the sustainability of public pensions, including parity with any pay increases for pensions in payment.