Cost-Neutral Early Retirement (CNER) is a mechanism which allows public servants to receive early payment of their pension benefits, subject to eligibility criteria, where they resign prior to their preserved pension age. Benefits paid under CNER are subject to actuarial reduction to take account of the early payment of the lump sum and the longer period over which pension will be paid.
Benefits paid on foot of CNER are taken in lieu of preserved benefits. The actuarially reduced rate of pension is paid for the lifetime of the pensioner, there is no option to subsequently switch to payment of a preserved pension from preserved pension age. Survivor benefits payable under the terms of a Spouses' and Children’s Pension Scheme continue to be calculated based on the member’s unreduced pension amount.
The information on this page relates to CNER arrangements in pre-existing public service pension schemes. For information on the CNER arrangements under the Single Scheme, please see https://singlepensionscheme.gov.ie/.
Individuals who wish to apply for CNER must be eligible for preserved benefits from their pre-existing public service pension scheme and be within 10 years of their preserved pension age. Eligibility therefore commences from:
- Age 50, in the case of public servants with a preserved pension age of 60
- Age 55, in the case of public servants with a preserved pension age of 65
An overview of retirement ages in the public service is available here.
In addition to meeting the requirements relating to age above, an individual wishing to apply for CNER must:
- be serving in a public service body as defined in the Public Service Superannuation (Miscellaneous Provisions) Act 2004
- be a member of the superannuation scheme of that body
- have an entitlement to a preserved superannuation benefit at age 60 or 65
- make their application prior to resignation
Where an individual avails of CNER, their preserved pension and lump sum benefits will be actuarially reduced in accordance with the rates and methodology set out in Circular 10/2005.
The reduction to apply will depend on the member’s exact age at resignation, relative to their preserved pension age. These rates, when applied to the individual’s preserved pension and lump sum, make them equivalent, in actuarial terms, to the preserved benefits which would otherwise have become payable from preserved pension age.
The Cost-Neutral Early Retirement feature on the pension modellers allows scheme members to obtain an estimate of their pension benefits under CNER, based on their inputs.
Please note that figures obtained from the pension modellers are based on the information input by the user and are illustrative estimates only. They bear no right to benefit and do not indicate an entitlement to avail of CNER where no such entitlement exists in accordance with the relevant scheme rules.
Where an individual has purchased, or is currently purchasing, service under the Purchase of Notional Service scheme and they avail of CNER, the amount of service they have opted to purchase will be impacted as follows:
- In the case of lump sum purchase or periodic purchase linked to the individual’s preserved pension age, the service actually purchased at date of resignation will be combined with the individual’s other reckonable service. Preserved Benefits based on total reckonable service will then be subject to actuarial reduction in accordance with Circular 10/2005.
- In the case of lump sum purchase or periodic purchase agreements linked to an age higher than the individual’s preserved pension age, two actuarial reductions will apply:
(a) An Actuarial Reduction under the rules of the purchase scheme will apply to the service actually purchased up to date of resignation. The resulting service is then added to the individual’s other reckonable service.
(b) Preserved Benefits calculated based on total reckonable service will then be subject to actuarial reduction in accordance with Circular 10/2005.
An individual who avails of CNER may be paid a supplementary pension, in line with the normal rules governing supplementary pensions, on reaching their preserved pension age only (age 60 or 65 as appropriate) and not from the date of their early retirement.
Further information on CNER is available in the circulars and letters below. Scheme members who wish to enquire about their eligibility for CNER should contact their HR or pension administrator.
Circular 10/2005: Public Service Pension Reform: Introduction of cost-neutral early retirement
Public Service Superannuation (Miscellaneous Provisions) Act 2004
Letter to Personnel Officers 13 July 2005: Supplementary note to circular 10/2005
