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Preserved Pension Benefits

Published on May 15, 2023

Last update on June 1, 2023

Table of contents

Overview

Where a pre-existing public service pension scheme member resigns prior to reaching their minimum pension age and having met the vesting period, their pension benefits accrued up to date of resignation will be ‘preserved’ or ‘deferred’ until they reach that age.

Where an individual resigns and has not met the vesting period, there is no entitlement to preserved pension benefits. In such cases, an individual will receive a refund of any pension contributions they have paid.

Background

Preservation of pension benefits was introduced at different times in the various pre-existing public service pension schemes.

In the civil service, the concept of a preserved pension did not exist prior to 1 June 1973. Under the Superannuation Acts, which govern the pension scheme for Established Civil Servants, in order to obtain a pension benefit an individual was previously required to retire from the civil service having reached their minimum pension age and having accrued a minimum of 10 years’ service.

Preservation of pension was introduced for members of the pension scheme for Established Civil Servants with effect from 1 June 1973 under Circular 46/1975. This circular also reduced the minimum qualifying period of 10 years' reckonable service for the grant of pension to 5 years for those civil servants serving in an established capacity on or after 1 June 1973.

Preservation of pension was introduced with effect from 1 January 1975 (Letter to Personnel Officers 13 July 1976) for members of the pension scheme for Non-Established State Employees who voluntarily resigned with at least 5 years’ service.

Although preservation of pension benefits was already a feature of most pre-existing public service pension schemes, pension providers were legally required to provide preservation of pension benefits for members resigning with 5 years’ qualifying service with effect from 1 January 1991, in accordance with the Pensions Act 1990. This qualifying service requirement was reduced to 2 years, in all pension schemes, with effect from 1 June 2002, in accordance with the Pensions (Amendment) Act 2002.

In public service pension schemes, the minimum service requirement for the grant of pension benefits is generally known as a “vesting period”. This means that on completing the prescribed period a member will have vested pension rights in their pension scheme.

Preserved benefits

Preserved benefits become payable, on application, once the former member reaches their preserved pension age. Preserved benefits are based on the member’s reckonable service up to their date of resignation and their pensionable remuneration at their date of resignation, uprated to include any pay increases applicable to the person’s grade which were passed onto to pensions in payment between the member’s resignation and reaching their preserved pension age.

Preserved pension age is generally the minimum pension age applying to the member in respect of their pension scheme membership, except for certain persons who are required to retire early due to the nature of their work. For example, prison officers may have a minimum pension age of 50 or 55 but a preserved pension age of 60. In general, for public servants who are not members of the Single Scheme, the minimum pension age is:

Preserved benefits include:

  • a) preserved lump sum and pension, or a preserved death gratuity (if the person dies before an entitlement to preserved pension and lump sum arises), and
  • b) preserved spouses' and children's pensions, where applicable.

Ill health

Where an individual with a preserved pension benefit incurs permanent ill health prior to reaching their preserved pension age, they may be granted early payment of their preserved pension benefits, subject to meeting the medical requirements for the granting of an ill health retirement pension. However, in such cases ill health added years will not apply.

Cost-Neutral Early Retirement (CNER)

Where a member of a pre-existing public service pension scheme resigns within 10 years of their minimum pension age, they may be eligible to apply for Cost-Neutral Early Retirement (CNER) in lieu of preserved pension benefits. CNER must be applied for prior to resignation; a member cannot resign with preserved benefits and subsequently seek to apply for CNER.

Further information on CNER is available at this link.

Supporting information