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Pensions & Investment Office

WHAT CHANGES WERE INTRODUCED IN BUDGET 2011 IN RELATION TO PENSIONS?

Pension Related Changes in Budget 2011

Reduction in the Standard Fund Threshold
Taxation of Retirement Lump Sums
Annual Earnings Limit
Approved Retirement Funds
Extension of Flexible Options on Retirement

Further Information is available at: http://www.revenue.ie/

PUBLIC SERVICE PENSION REDUCTION
The Government has decided that a reduction in the cost of public service pensions of €100m, or 4% in overall terms, is necessary in 2011. The reduction will apply to existing beneficiaries of public service pensions; this group includes former Presidents, other former office holders and retired members of the judiciary. More Information

ON RETIREMENT WHAT PAYROLL CHANGES ARE MADE?
Payroll has advised the following changes on retirement:

1. Payslip address changed to home

2. Prsi class M

3. Pension levy ceases.

4. Pension deduction ceases

5. USC levy continues.

6. PSPR deduction set up if above threshold. – this only applies if retirement is on or before 28 Feb 2012. The average pension deduction is 4% and is calculated as follows:

First € 12,000                                   0%
Between 12,001 and 24,000             6%
Between 24,001 and 60,000             9%
Between €60,001 and €99,999           12%
Balance above €100,000                    20%

7. All deductions cease except VHI, Bank savings, insurance policies or charity subs. Usually the employee instructs the payroll office on such deductions.

PENSION LEVY

Pension Related Deduction (PRD) rates effective May 2009

First 15,000 of Earnings - Exempt

Between €15,000 & €20,000 - 5%

Between €20,000 & €60,000 - 10%

Above €60,000 - 10.5%

WHAT IS THE DATE OF THE FIXED TERM WORK ACT?
The Protection of Employees (Fixed Term Work) Act, 2003 was implemented on the 14th of July 2003.

WHAT FIXED TERM SERVICE IS RECKONABLE FOR PENSION PURPOSES?
Fixed-term employees who meet the relevant criteria are eligible to have their service with effect from 14 July 2003 reckoned for pension purposes. A fixed-term member of staff must work a minimum of 20% of their full time equivalent comparator to be eligible for pension.

WHAT IS THE DATE OF THE PART TIME WORKERS ACT?
Protection of Employees (Part-Time Work) Act 2001 came into operation on the 20th December 2001.

WHAT SERVICE IS REQUIRED TO QUALIFY FOR DEFERRED BENEFITS?
To be eligible for a deferred benefit on termination the member must have completed a minimum of two years service. If the service is less than 2 years the employee will receive a refund of his/her pension contributions paid after deduction of 20% tax.

WHICH PENSION SCHEME IS APPLICABLE?
New entrants from January 2005 will be entitled to pension benefits as outlined in the Model Scheme. Staff recruited prior to this date will be entitled to benefits as outlined in the Joint Pension Scheme.

The Joint Pension Scheme and Model Scheme are both Defined Benefit (DB) Pension Schemes.

WHAT ARE THE CONTRIBUTION RATES PAYABLE BY MEMBERS?

Salary x 1.5% Spouse & Children's
Salary x 1.5% Lump Sum
Salary minus 2 (OACP) x 3.5% Pension
(OACP - Old Age Contributory Pension: € 11,975.58 p.a effective 1 Jan 2009)

WILL MEMBERS OWE PENSION ARREARS?
Yes, an email will be sent to each individual member advising the pension contributions arrears amount due for periods prior to becoming a member of the Model Scheme. The repayment period allowed will be the relevant arrears period. Arrears can however be repaid over a shorter period. Arrears will be processed through payroll to facilitate tax and PRSI relief.

WHAT HAPPENS IF A MEMBER LEAVES THE COLLEGE PRIOR TO PAYING THEIR ARREARS IN FULL?
If a member leaves the college prior to paying his/her arrears in full, any outstanding balance can be paid by cheque. It is strongly advised that arrears are paid within the agreed arrears period, as any amounts unpaid after this period will attract compound interest.

CAN I CLAIM TAX & PRSI RELIEF ON THE AMOUNTS PAID BY CHEQUE?

You can apply for tax refund from revenue - the Pensions office will write to revenue confirming the amount paid and provide a copy of the letter to you in support of your refund application. Claims for refunds of PRSI (only allowed to year end 31/12/10) in respect of pension contributions should be made by completing Form CGPRS 1

Completed forms together with a copy of your P60 for the tax year to which the claim relates should be sent to:
PRSI Refunds Section, Collector-General’s Division, Sarsfield House, Limerick.

(Prior to making a claim for a pension PRSI refund, an application for a refund of tax on the pension contributions must be made to the applicant's tax district at the end of the tax year).

IS THERE A MAXIMUM AMOUNT I CAN CONTRIBUTE?

Tax & PRSI Relief on Pensions (Pension & AVC's) is restricted to the following age thresholds:
Under 30     15%
30-39          20%
40-49          25%
50-54          30%
55-59          35%
60 and over 40%

Also the recent budget (2010) has restricted the income threshold for pension funding to €115,000 p.a.

ENTITLEMENT TO RETIRE FROM AGE 60 (STAFF EMPLOYED PRIOR TO 1 APRIL 2004) IF A BREAK IN SERVICE?
Where there was an intention in the original contract for it to end and a new (un-related) contract commences within 26 weeks, the entitlement to retire from age 60 continues BUT the pension scheme the staff member is en-rolled in on re-commencement will be determined by the date of re-commencement and NOT the original start date i.e. if re-commencement date is on or after 1 Jan 2005 the Model Scheme benefits apply.

Where there was NOT an intention in the original contract for it to end and a new (related) contract commences within 26 weeks, the entitlement to retire from age 60 continues AND the pension scheme the staff member is en-rolled in on re-commencement will be determined by the date of the original contract and NOT the re-commencement date i.e. if original contract date is before 1 Jan 2005 the JPS Scheme benefits apply.

MARIE CURIE FELLOW'S
The Marie Curie exemption relates to staff that come to the University for the first time, work on a Marie Curie contract for 2 or less years and then leave the University.

Marie Currie Fellow's are not pensionable where the contract period is less than or equal to 2 years. Marie Curie Fellow's are pensionable where the contract period is greater than 2 years.

Where after the end of the original Marie Curie award (less than or equal to 2 years) an employee:

Remains as an employee of NUIG - pensionable status starts at next contract if eligible - the staff member can purchase the 2 years under the notional purchase scheme if they so wish.
Returns after a period of time - pensionable status starts at next contract if eligible - the staff member can purchase the 2 years under the notional purchase scheme if they so wish.

Pensions & Investment Office
This page was last updated Tuesday, January 24, 2012