Pension Scheme Membership and Contract Terms

In the case of persons taking up pensionable public service employment on or after 1 January 2013, pension scheme assignment is governed by section 10 of the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 (‘the 2012 Act’). In general, that section provides that membership of the Single Scheme will apply to all first-time new entrants to the public service on or after that date, as well as previous public servants unless they qualify for one of the exemptions provided in the 2012 Act.

The most common exemption applies where a public servant previously held membership of a pre-existing public service pension scheme and did not subsequently have a break in public service employment of more than 26 weeks. Such persons normally become members of the pre-existing public service pension scheme operating in their new workplace.

Further information on the Single Scheme is available at its dedicated website.

In order to determine pension scheme membership and the appropriate contract terms to apply to an individual, a pension administrator or HR unit must generally obtain and undertake a review of the following information:

(i) The individual’s full public service employment history (including exact dates of employment),

(ii) Details of any breaks in service (including exact dates and nature of the break),

(iii) Pension scheme membership associated with each employment,

(iv) PRSI class in each employment,

(v) Whether the appointment is to a permanent or temporary (fixed term) position,

(vi) the legal basis for the appointment (in the case of public service appointments)

Guidance on how to review the above information in order to determine the appropriate pension terms to apply to an individual is included in the Pension Scheme Membership Determination guidance document. Appendix 2 of the guidance document also includes template superannuation terms that may be included in the employment contract of any person taking up a pensionable public service employment. Other important information relating to pension and employment terms is set out below.

The guidance document and information below are intended as a guide only and should not be relied upon as a legal interpretation of pension scheme rules or legislation. At all times, the rules of the relevant pension scheme and governing legislation take precedence. Pension administrators/HR units are ultimately responsible for the correct pension classification of their employees and should take care to ensure that scheme membership is determined accurately from commencement of employment, in so far as possible.

It is imperative that a full employment history in respect of each new hire employee is obtained and reviewed to ensure their terms are set correctly from commencement of their employment. Failure to do so can result in inadvertent errors being made which will ultimately require correction. For example, such errors may lead to:

• payment of an incorrect pay rate resulting in overpayment of salary
• underpayment or non-payment of contributions resulting in overpayment of salary
• misinformation on pension terms leading to misrepresentation of pension entitlements
• non-application of pension abatement resulting in overpayment of pension.

In the case of persons taking up pensionable public service employment who do not qualify for membership of the Single Scheme, membership of the appropriate pre-existing public service pension scheme will apply.

The appropriate pre-existing public service pension scheme to apply to an individual will depend on the set of information set out under ‘Pension scheme membership determination’ above and the pension scheme rules and legislation applicable to the person in their new employment. The specific terms applicable under a pension scheme may also vary depending on an individual’s date of appointment.

The following pre-existing pension schemes apply in the civil service:

• The Pension Scheme for Established Civil Servants, comprising:
  • The Non-Contributory Pension Scheme for Established Civil Servants (sometimes known as “pre-1995” terms), and
  • The Contributory Pension Scheme for Established Civil Servants (sometimes known as “post-1995” terms).
• The Non-Contributory Pension Scheme for Non-Established State Employees

Those schemes also have associated Spouses’ and Children’s Pension Schemes that provide survivor benefits for the members surviving spouse and/or dependents.

Each public service body will usually have its own pre-existing public service pension scheme in place for its employees who do not qualify for membership of the Single Scheme. When a public service body is established, the legislation providing for its establishment will normally contain a provision that permits the relevant Minister to make a pre-existing public service pension scheme for employees of the body who do not become members of the Single Scheme. Such schemes are unique to each body but many follow the terms of the model pension scheme, which is set out in S.I. 582/2014 - ‘Rules for Pre-existing Public Service Pension Scheme Members Regulations 2014’.

Information on the pension scheme in operation in a particular public service body may be sought directly from that body.

Retirement ages in the public service are contained, for the most part, in pension scheme rules and legislation and generally depend on an individual’s pension scheme membership and date of recruitment to the public service.

The Public Service Superannuation (Miscellaneous Provisions) Act 2004 (‘the 2004 Act’) removed the compulsory retirement age and increased the minimum pension age for certain categories of new entrants joining the public service on or after 1 April 2004. Those public servants who are deemed to be ‘New Entrants’ in accordance with the 2004 Act generally have a minimum pension age of 65 and have no compulsory retirement age.

The Public Service Superannuation (Age of Retirement) Act 2018 amended the 2004 Act to provide for an increase in the compulsory retirement age for most ‘pre-2004’ public servants. Those public servants who are deemed not to be ‘New Entrants’ in accordance with the 2004 Act generally have a minimum pension age of 60 and a compulsory retirement age of 70.

Section 2 of the 2004 Act sets out certain exemptions from New Entrant status, including, most commonly, where a person who is not a New Entrant ceases to serve in a public service body on or after 1 April 2004, they will not be deemed a New Entrant on taking up a subsequent public service employment provided they do so within 26 weeks of ceasing the earlier employment.

Section 51 of the 2012 Act places a legal obligation on individuals taking up employment in the public service to declare any entitlement to pension benefits accrued under a public service pension scheme, whether already in payment or preserved. Public service bodies should be proactive in ensuring that such statutory declarations are obtained from individuals on commencing public service employment.

A Section 51 declaration is important to ensure proper application of the Benefit Cap, that pension abatement is applied where required, and can be helpful to establish an individual’s prior public service employment history in the context of determining the appropriate pension scheme membership to apply in respect of their new public service employment.

A template Section 51 Applicant Declaration Form, which may be used for all persons taking up public service employment, is available here on the Single Scheme website.

Whether an employment is deemed to be permanent or temporary (fixed-term) in nature may have implications for the pension terms of an individual. This is because persons appointed to fixed term/temporary positions are generally required to pay Class A PRSI contributions in accordance with the regulations governing PRSI classification (S.I. 312/1996). Many pre-existing public service pension schemes provide integrated pension terms for those members who are liable for Class A PRSI (‘full social insurance’) and non-integrated pension terms for members paying Class B, C or D PRSI (‘modified social insurance’).

Persons who hold permanent public service positions, in respect of which they pay a modified rate of PRSI, who are considering applying for fixed-term public service positions should therefore make themselves aware of any implications for their pension terms arising from this. Continuation of modified social insurance on moving from a permanent and pensionable public service post is contingent on immediately taking up another permanent civil or public service employment and therefore taking up any non-permanent job may alter an employee’s PRSI classification.

The PRSI classification of employees is ultimately a matter for the scope section in the Department of Social Protection (DSP).

Further information about PRSI is available at this page on the gov.ie website.

In the civil service there are two rates of pay in place for the majority of civil service grades, known as the ‘PPC rate’ and the ‘non-PPC rate’. The pay rate to apply (either PPC or non-PPC) is determined by the pension scheme that the person is a member of and whether a Personal Pension Contribution, or ‘main scheme’ contribution, is required within that scheme. It is not based on date of appointment to the civil or public service, nor is it contingent on whether a person has been paid a PPC or Non-PPC pay rate in the past.

The PPC scales apply where an individual is required to make a Personal Pension Contribution to their pension scheme, while the non-PPC scales apply where a Personal Pension Contribution is not required. A Personal Pension Contribution, also known as a main scheme contribution, is distinct from Spouses’ and Children’s contributions and the Additional Superannuation Contribution (ASC) which may also be payable in respect of pension scheme membership.

For example, PPC scales apply where a person is a member of the contributory pension scheme for Established Civil Servants. However, non-PPC pay scales apply where a person is a member of the non-contributory pension scheme for Non-Established State Employees, as such persons are not required to make a main scheme pension contribution.

The terms ‘established’ and ‘non-established’ are used in the civil service to refer to the particular pension arrangements that apply to a civil servant. The classification of a civil servant as ‘established’ stems from the Civil Service Regulation Acts 1956 to 2005, which provide that an ‘established position’ is one in respect of which a pension under the Superannuation Acts 1834 to 1954 may be granted, i.e. where membership of the pension scheme for Established Civil Servants applies.

A ‘non-established’ or ‘unestablished’ position is one that is not an established position, i.e., the position does not attract a pension under the Superannuation Acts and membership of the pension scheme for Established Civil Servants does not apply. Instead, the non-contributory pension scheme for Non-Established State Employees (or ‘unestablished’ pension scheme) usually applies to persons employed in a ‘non-established’ capacity in the civil service. This is an administrative scheme that is not linked to the Superannuation Acts. Therefore, members of this scheme cannot be considered ‘established’ in line with the legislative definitions referenced above.

Although these terms derive from the pension status of an individual, over the years they have incorrectly been used to refer to the nature of the employment or the capacity in which a person is employed. For example, temporary positions have become associated with the term ‘unestablished’ because civil servants employed in a temporary capacity generally join the non-contributory pension scheme for Non-Established State Employees. Similarly, permanent positions have become associated with the term ‘established’ because civil servants employed in a permanent capacity generally join the pension scheme for Established Civil Servants. Although there is often a link between employment status and pension terms, such as established and permanent and unestablished and temporary, these terms do not mean the same thing and should not be used interchangeably. Any reference to the nature, or tenure, of employment should use the terms 'permanent' and 'temporary'.

The terms ‘established’ and ‘non-established’ do not exist in a public service context as public service pension benefits do not derive from the Civil Service Regulation Acts or Superannuation Acts from which those terms originate.

The pension terms applicable to any person appointed as a CEO of a Non-Commercial State Body (NCSB) will be determined in the context of their prior public service employment history and on the legislative provisions governing appointment to that position. However, it should be noted that the standard terms and conditions prevailing in the public service at the time of being offered an appointment will apply.

A template contract and template Principal Conditions of Service for such staff are available at this link.

The pension terms applicable to any person appointed as ministerial personal staff, such as civilian drivers and special advisers, will be determined in the context of their prior public service employment history. Such staff are generally employed on a contract basis, and tenure is co-terminus with the relevant minister.

Template contracts for such staff are available at this link.

• Public Service Superannuation (Miscellaneous Provisions) Act 2004
• Public Service Pensions (Single Scheme and Other Provisions) Act 2012
• Public Service Superannuation (Age of Retirement) Act 2018
• Circular 06/1995: Revised social insurance status and conditions of service of certain civil servants