Old Entrant Scheme/National Teachers Pension

The Primary School Teachers’ Pension Scheme is a contributory scheme. The basic average superannuation contribution is 5% of gross salary and allowances.

For those paying Class A PRSI superannuation contributions are 3.5% of net pensionable remuneration + 1.5% of gross pensionable remuneration.

Gross pensionable remuneration is pensionable pay plus any approved pensionable allowances. Net pensionable remuneration is gross pensionable pay less twice the value of the State Pension Contributory.

Teachers who are members of the Spouses’, Civil Partners’ and Children’s Pension Scheme pay an additional contribution of 1.5% of gross salary and allowances. A 2% deduction applies to those who had originally opted out of joining the scheme in 1981 when it became available to women and then chose to join the revised scheme in 2004/05

This pension scheme provides for one of the following:

• Payment of a pension and lump sum on retirement; or
• Payment of a disability pension and lump sum in the case of early retirement on the grounds of ill-health; or
• Payment of a lump sum to the estate of a teacher who dies in service (death gratuity); or
• Entitlement, in certain circumstances, to a deferred pension and lump sum at age 60 or
• 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.

Compulsory Retirement Age – There is a compulsory retirement age of 70 under this scheme. Pension and lump sum are paid to a teacher when they retire on compulsory grounds.

Normal Retirement Age – Teachers who have given at least five years of pensionable service may voluntarily retire with a pension and lump sum on, or after, reaching their 60th birthday.

Voluntary Early Retirement Age– Teachers may retire voluntarily and be awarded a pension and lump sum provided they have reached the age of 55 and have given the required number of years pensionable service based on their pre-service training.

The pensionable service requirement for Voluntary Early Retirement with pre-service training is:

• 2 years of initial teacher education training = 35 years’ service
• 3 years of initial teacher education (B.Ed) = 34 years’ service
• 4 years or more of initial teacher education (Post-Grad) = 33 years’ service

This is known as Voluntary Early Retirement (VER).

(Please note, no “added years” are given for completing three or more years pre-service training.)

The service requirement for Voluntary Early Retirement must be paid pension service. Any time on unpaid leave such as career break, parental leave or Temporary Rehabilitation Remuneration will not count towards this service requirement. Retiring before the age of 60 without meeting the service requirement for Voluntary Early Retirement would be on a Cost Neutral basis.

Teachers seeking to retire who have not reached the normal retirement age for the old entrant pension scheme (60), or the requirements for Voluntary Early Retirement, but who have pensionable service, will retire under the terms of a Cost Neutral Early Retirement. Read more about Cost Neutral Early Retirement here.

Cost Neutral Early Retirement is available from age 50 to members of the Old Entrant Pension Scheme.

Circular PEN07/05 outlines how Cost Neutral Early Retirement is calculated for Old 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.

For example, a teacher who retires at age 59 on a Cost Neutral basis, will get 94.8% of their pension and 98% of their lump sum, this is a permanent reduction, see: Circular PEN07/05.

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 until the teacher reaches the normal retirement age of their pension scheme (60). The Department will then, when you reach the retirement age of your pension scheme subject to your eligibility, pay out the Occupational Supplementary Pension up until the current state retirement age of 66.

The onus is on the retired teacher to apply for the Occupational Supplementary Pension.

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

‘Retiring salary’ means, the sum of:

• The gross annual rate of salary scale on the last day of pensionable service; and
• The gross 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 above does 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

(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).

For teachers paying Class A PRSI a portion of this pension will come from an Occupational Supplementary Pension/State Benefits/State Pension Contributory.

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.

There is currently a lifetime tax free limit of €200,000 on the retirement lump sums.

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 with Class D PRSI contributions only, have no entitlement to a state pension benefit and will receive their pension in full through the Department of Education.

Members 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 60) will not be entitled to an Occupational Supplementary Pension until they reach age 60, 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 Old Entrant 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 Old Entrant Scheme
Band	Rate
Up to €34,500	Exempt
Next €25,500 (€34,500 to €60,000)	10%
Balance (€60,000 plus)	10.5%

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.

Application forms for the payment of pension and lump sum are automatically forwarded by the Department of Education to teachers due to retire on compulsory grounds at age 70.

Advice on completing this form can be found 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.

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.
6. An application form for the Occupational Supplementary Pension OSP1

Pension payments are issued fortnightly, on the same day as teacher pay.

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 and Youth, Cornamaddy, Athlone, Co. Westmeath or use the online Contact Form.

A teacher can apply for a pension quote by completing and submitting the Query Form 1 to the Department of Education and Youth pension’s section – you can find this form here.

The Pensions Section prioritise pension quotations 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 Old Entrant Pension Scheme to use our pension calculator here.