The Public Service Pension Reduction (PSPR) was a reduction imposed on public service pensions which exceeded applicable exemption thresholds. PSPR came into effect on 1 January 2011 via the Financial Emergency Measures in the Public Interest Act 2010 (“FEMPI”) as part of the government’s programme of financial emergency measures to address the serious position of public finances.
PSPR was designed in a progressive manner with proportionately larger reductions imposed on relatively higher value pensions. Pensions below applicable exemption thresholds were exempt from PSPR.
PSPR was significantly extended via the FEMPI Act 2013. When applied at peak rates, PSPR secured savings in the region of €135 million per year, providing a significant contribution to the stabilisation of the public finances.
A three-stage partial reversal of PSPR was provided for in the FEMPI Act 2015, with rate reductions occurring from 1 January in each of the years 2016, 2017 and 2018. The Public Service Pay and Pensions Act 2017 provided for the substantial further lessening of the impact of PSPR by way of rate and/or threshold changes in each of the years 2019 and 2020. These changes meant that approximately 97%-plus of public service pensions were free from PSPR from 1 January 2020.
PSPR was removed from the remaining group of affected pensions from 1 July 2021 in accordance with the Public Service Pay and Pensions Act 2017 (Section 27(3)) Order 2020. This included those pensions awarded prior to 1 March 2012 with a gross value over €54,000, and those pensions awarded from 29 February 2012 – 1 April 2019 with a gross value over €60,000.
Circulars
- Circular 18/2015 - Changes to the Public Service Pension Reduction (PSPR)
- Circular 02/2018 - Pension increase policy in the public service until end-2020
Acts
- Financial Emergency Measure in the Public Interest Act 2010
- Financial Emergency Measure in the Public Interest Act 2013
- Financial Emergency Measure in the Public Interest Act 2015
- Public Service Pay and Pensions Act 2017
- S.I. 632/2020 - Public Service Pay and Pensions Act 2017 (Section 27(3)) Order 2020
Letters
- Letter to Payrolls 27 August 2013 – Aggregation of Pensions for the Purposes of PSPR
- Letter to HR Managers 18 December 2019 - Public Service Pension Reduction (PSPR) thresholds/rates changes and pension increases with respect to Pensionable Rate of Pay-affected grades
- Letter to HR Managers 21 May 2021 - Removal of the Public Service Pension Reduction (PSPR)
