New Entrant Pension Scheme

The basic average superannuation contribution is 5% of gross salary and allowances.

Teachers who are members of the Spouses’, Civil Partners’ and Children’s Pension Scheme pay an additional contribution of 1.5% or 2% of gross salary and allowances.

This pension scheme provides for one of the following:

• Payment of a pension and lump sum on retirement
• Payment of a disability pension and lump sum in the case of early retirement on the grounds of ill-health
• Payment of a lump sum to the estate of a teacher who dies in service (death gratuity)
• Entitlement, in certain circumstances, to a deferred pension and lump sum at age 65
• Entitlement to transfer pension rights to an organisation participating in the Transfer Scheme
• The payment of a pension to a surviving spouse and/or eligible children following death (either in service or following retirement).

Please note: The Additional Superannuation Contribution (ASC) is a government levy and is not a contribution to the pension scheme.

There is no compulsory retirement age for members of the New Entrant Pension Scheme. Members are not obliged to retire on age grounds. See Section 2 of the Public Service Superannuation (Misc. Provisions) Act, 2004. See also DE Circular 10/04 (PDF).

There is no voluntary early retirement option for members of the New Entrant Pension Scheme.

Yes. Teachers seeking to retire who have not reached the normal retirement age for the New Entrant Pension Scheme (65) but who have pensionable service, can retire under the terms of cost neutral early retirement from age 55 on.

Circular PEN07/05 outlines how Cost Neutral Early Retirement is calculated for the New Entrant Pension Scheme. Retiring on a cost neutral basis means that a teacher’s pension will be actuarially reduced to take into account the early payment of lump sum and the longer period over which pension will be paid. The Department of Education spreads out the pension over more years.

For example, if a new entrant teacher retired at age 59 on a cost neutral basis, they will get 71% of their pension and 89% of their lump sum for their pensionable years.

Where a teacher has Class A PRSI contributions and retires on Cost Neutral Early Retirement, the Department will not pay out any Occupational Supplementary Pension (OSP) until the teacher reaches the normal retirement age of their pension scheme (65). The Department will, when you reach the retirement age of your pension scheme, then pay out the OSP up until age 66, the current State retirement age.

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 their compulsory retirement date, or
  • The teacher retires on grounds of disability before the earliest date at which they would be eligible for pension on voluntary retirement, 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 them 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.

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 (ie 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.

The INTO Pension Calculator has been developed specifically for INTO members to assist in the calculation of an estimated pension and lump sum. Figures supplied on the calculator are for illustrative purposes only. Access the calculator here. Estimates provided should not be considered a substitute for professional financial advice. The DE will supply the final figures.

Important note: The INTO calculator is not designed to calculate Cost Neutral Early Retirement (CNER) estimates. Access the DE Pensions Calculator.

How To Use The Calculator

To calculate your gross pension and lump sum, please input the following 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.

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

On retirement members of this scheme who have Class A contributions, or a mix of Class A and Class D may have an entitlement to the State Pension from the state pension age (currently 66) or to Job Seeker’s Benefit/Age 65 Benefit if they retire before the state pension age.

 

These members now have the option of interacting with the Department of Social Protection on retirement to claim any benefits they may be entitled to, or of claiming an Occupational Supplementary Pension immediately when they retire from the Department of Education. The Occupational Supplementary Pension is a payment that will bridge the gap in overall pension entitlement until they have claimed the State Pension Contributory.   See our page on Pensions and Pay Related Social Insurance for further information.

Members of this pension scheme who retire on Cost Neutral Early Retirement basis (prior to age 65) will not be entitled to an Occupational Supplementary Pension until they reach age 65, the normal retirement age for this scheme.

Additional Superannuation Contribution (ASC) was introduced on 1 January 2019 and is a permanent contribution in respect of pensionable remuneration. ASC confers no additional pension benefits but underpins the sustainability of public pensions. The table below details the current rates of ASC payable by members of the Single Pension Scheme.

Circular 0072/2019 introduced further revised thresholds for the payment of ASC. These changes were effective from January 2020.

Examples of Changes from January 2020

Members of the New Entrant Scheme
Band	Rate
Up to €34,500	Exempt
Next €25,500 (€34,500 to €60,000)	10%
Balance (€60,000 plus)	10.5%

The following is a summary of the scheme of preserved pension benefits:

• If a teacher resigns voluntarily from the service, but without immediate entitlement to a pension and lump sum, they may preserve their pension rights provided they have at least two years of pensionable service. This means that if pension contributions are not withdrawn, an annual pension and lump sum will become payable when the teacher reaches 65 years of age following application to the Department of Education.
• Pension and lump sum will be calculated as for ordinary retirement under the New Entrant Pension Scheme. Furthermore, for calculation purposes, retiring salary will be determined with reference to the salary scales in operation at the time the teacher reaches 65 years of age.
• Preserved benefit applies only where some pensionable teaching service is given after 30 June 1977. Teachers who are entitled to a preserved pension and lump sum should apply three months prior to their 65th birthday, to the Department of Education to claim benefit.
• Where a teacher, having left the service with entitlement to preserved benefits dies before reaching 65 years of age, a preserved death gratuity is payable to her/his legal personal representative on application to the Department. Letters of Administration or Grant of Probate of Will must be produced. The preserved death gratuity will be based on the teacher’s pensionable service only (ie the minimum of one year’s annual salary that applies in the case of death in service will not apply). For calculation purposes, ‘retiring salary’ is updated to its equivalent value at the date of the teacher’s death.
• Should the teacher have been a member of the Spouses’ and Children’s Pension Scheme, benefit may be payable in accordance with the terms of the scheme. The spouse’s and/or children’s pension will be based on the teacher’s actual pensionable service only.

To apply for pension the teacher must submit a RET 1 form to the Pensions Section of the Department of Education, this can be downloaded from the DE website.

 

Completed applications forms should be returned to the Department, (Primary Pensions Section, Athlone, Co. Westmeath), ten to twelve weeks in advance of the effective date of retirement, in order to ensure payment of the pension and lump sum on retirement.

Advice on completing this form can be found in our advice on Retirement section here.

Please note there is also a requirement for three months notice, in writing, to the Chairperson of your Board of Management/ETB to retire.

Teachers retiring at the end of the school year should date their retirement effective from 31 August in order to ensure payment of full salary for the months of July and August.

A teacher’s retirement lump sum is normally issued by the Department of Education within one month of retirement.

Thereafter pension is paid fortnightly on the same day as teacher pay.

The following documentation is issued to a teacher approximately one week before the lump sum is issued:

1. A statement of the benefits being paid and a pension number.
2. Pension Declaration Form. This declaration must be returned to the Office of the Pay Master General (PMG) which issues pensions. The first pension payment will not be issued until this form is returned. Normally the first pension payment will contain any arrears of pension due.
3. A form for claiming a rebate of income tax in respect of deductions (if any) from the lump sum e.g. for outstanding contributions to the Spouses’ and Children’s scheme/Substitute Service.
4. A general information leaflet.
5. An application form for membership of the Retired Teachers’ Association.

VHI contributions can be deducted directly from retired teachers’ pensions. However, the Group Scheme for retired teachers operates on a calendar year basis and accordingly retired teachers should contact VHI and arrange direct payment of premiums for the period during their retirement date and the renewal date of the retired teachers’ scheme which is 1 January.

Queries regarding teachers’ pensions are dealt with in the Primary Pensions Section, Department of Education, Cornamaddy, Athlone, Co. Westmeath.

Email pensions@education.gov.ie or use the online Contact Form.

 

A teacher can apply for a pension quote by completing and submitting this Query Form 1 to DE Pensions – here.

The Pensions Section prioritise pension quotes for teachers in order of their proposed retirement date and will only give a quotation during the school year that the teacher has indicated they wish to retire in.

While awaiting a quote we advise teachers on the New Entrant Pension Scheme to use our pension calculator here.

Pension payments are issued from the Department of Education offices in Athlone.