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Pensions & Investment Office

Pensions & Investments FAQ:

All queries other than those answered below should be emailed to: pensionsnuigalway.ie

WHO SHOULD I CONTACT IF I WANT TO RETIRE BEFORE REACHING AGE 65?

Academic Staff: Liaise with the Registrar's Office & your Supervisor / Manager

Non-Academic Staff: Liaise with the Human Resources Office & your Supervisor / Manager

The Registrar's Office / Human Resources Office will formally advise the Pensions Office of the agreed retirement date.

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/

What is the PUBLIC SERVICE PENSION REDUCTION (PSPR)?
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

When should I apply for the State Pension (Contributory) from the Department of Social Protection?

Prior to an individual reaching retirement age, he/she should submit a claim for the State Pension (Contributory) to the Department of Social Protection (DSP) in respect of him/herself and his/her spouse/civil partner as an adult dependent, where appropriate. However, if the adult dependent is entitled to claim the State Pension (Contributory) in his or her own right, he/she should do so, as the personal rate is higher than the adult dependent rate. It should be noted that an individual can continue in employment or self employment and still be entitled to the State Pension (Contributory).

In addition, it is more tax efficient for each spouse/civil partner to have a separate entitlement to the State Pension (Contributory) in order to avail of the increased SRCOP and each spouse is entitled to claim a PAYE tax credit. All married couples/civil partnerships are entitled to the married/civil partnership tax credit.

Where only one spouse/civil partner qualifies for the State Pension (Contributory) and he/she also qualifies for an adult dependent payment, assuming the adult dependent has no income in his/her own right, the couple will only be entitled to the SRCOP for a couple with one income, married/civil partnership tax credit and only one PAYE tax credit. Although the DSP may make the adult dependent payment directly to the adult dependent, Revenue regard this as the income of the claimant, not the adult dependent.

Further information on claiming and taxation of the State Pension (Contributory) is available by clicking on:

http://www.welfare.ie/en/Pages/State-Pension-Contributory.aspx

and

http://www.revenue.ie/en/personal/dsp-pensions.html

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 29 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.

How is the PENSION LEVY calculated?

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 FIXED TERM SERVICE / PART-TIME SERVICE IS RECKONABLE FOR PENSION PURPOSES?
The HEA has advised the following in relation to the reckoning (for pension purposes) of fixed term or part-time service prior to the coming into operation of the Protection of Employees (Part-Time Work) Act, 2001 & Protection of Employees (Fixed Term Work) Act, 2003 :

The terms of the NUI Galway Joint Pension Scheme apply to members of that scheme i.e.

“All service rendered to the College by a participant in a permanent fulltime capacity or in a permanent part-time capacity pensionable by Statue, as well as fulltime continuous service in a temporary or probationary capacity immediately prior to and up to the date of his appointment in a permanent fulltime capacity shall be deemed to be pensionable service. “

The Protection of Employees (Fixed Term Work) Act 2003 provided for the inclusion of fixed term workers in the pension scheme, who met certain conditions (eg. a permanent comparator) from 14th July 2003. The Protection of Employees (Part Time Work) Act 2001 provided for the inclusion of part-time workers in the pension scheme, who met certain conditions (e.g. full-time comparator, working 20% of f.t.e.) from 20 December 2001.

As regards the reckoning (for pension purposes) of fixed term or part-time service prior to the coming into operation of the Acts on 14th July 2003 and 20 December 2001, the Acts do not specifically provide for retrospection and do not explicitly deal with how service prior to the implementation of the Act is to be treated. Accordingly, the issue of reckoning prior service depends on the terms of the relevant pension scheme. As there is no provision in the NUIG pension scheme to reckon CID service, any CID service prior to the implementation of the Fixed Term Work Act and the Part-Time Work Act cannot be reckoned under the NUIG pension scheme.

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. Details on both schemes are available at: http://www.nuigalway.ie/pensions_investment/welcome.html

WHAT ARE THE CONTRIBUTION RATES PAYABLE BY MEMBERS?

Staff employed post April 1995 in the public sector pay (i.e. paying A PRSI):

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)

Staff employed pre April 1995 in the public sector pay (i.e. paying D PRSI):

Salary x 1.5% Spouse & Children's

WHAT IS CLAW-BACK?
Each member of the Pension Scheme must contribute to the Spouse’s and Children’s Pension Scheme as detailed above.

On retirement or death a further contribution of 1% per annum will be deducted from the Lump Sum. This contribution will be in respect of every year in which a participant did not make a contribution. (This deduction is called the “Claw Back”). If the member opts not to take the lump sum the deduction is 1/9 of the claw back and is deducted from the pension.

WILL MEMBERS OWE PENSION ARREARS?
Yes, an email will be sent to each individual member advising the pension contributions arrears amount due for reckonable 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 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 (document link)

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).

CAN I TRANSFER SERVICE FROM A PREVIOUS EMPLOYER?

Yes – please contact pensionsnuigalway.ie :

- Transfer from private sector pension: An estimate of what your deferred benefits is worth in terms of years in the NUI Galway scheme can be advised on receipt of an up-to-date transfer value(request this from your former employer / pension provider)

- Transfer from Public Sector (Ireland): A request to your former public sector employer on receipt of confirmation of dates employed etc.

CAN I PURCHASE ADDITIONAL SERVICE?

Pension scheme members are eligible to buy notional years - subject to certain conditions. Contribution rates for monthly deduction contributions begin on your next birthday and end on your 60th or 65th birthday. Contribution rates for lump sum payments may be made at any time, subject to one such purchase per annum. Unpaid contributions for a period during a purchase agreement can be made good by way of lump sum or by doubling-up on periodic contributions for an equivalent period.

Further information at: http://www.nuigalway.ie/pensions_investment/purchase_of_notional_service.html

Max service that can be purchased is the lesser of (a) the amount specified in the table below or (b) the result of the formula 40-A-B, where A = Potential service and B = the service value of any retained benefits.

Job sharers/part-time workers may buy service to give 40 full-time equivalent years at either 60 or 65 (subject to the limit set out above).

Actual Reckonable Service (including transferred service but excluding purchased service and notional added service) which the officer would have if s/he remains in service until age 65		Maximum Service which can be purchased
20 Years or more		Difference between 40 years and reckonable service by age 65
19 years		17 years
18 years		15 years
17 years		13 years
16 years		11 years
15 years		9 years
14 years		7 years
13 years		5 years
12 years		4 years
11 years		3 years
10 years		2 years
9 years		1 year

IS THERE A MAXIMUM AMOUNT I CAN CONTRIBUTE?

Tax 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.

WHAT ARE MY OPTIONS ON LEAVING NUI GALWAY (PRIOR TO REACHING RETIREMENT AGE)?

If you leave NUIG with 2 years service or greater, you have the following options:

1. Entitlement to a deferred pension payable from Age 60 (if employed prior to 1 April 2004) or Age 65.

2. Transfer the service to a subsequent employer in the public sector in Ireland. Transfers to outside the public sector are not allowed.

If you leave NUIG with less than 2 years service, you have the following options:

3. Receive a refund of contributions nett of 20% tax (by cheque) and a refund of pension levy (through payroll) OR

4. Transfer the service to a subsequent employer in the public sector (in Ireland). Transfers to outside the public sector are not allowed.

Please Note:

· If the first option (refund) is chosen and you later want to reckon the service, pension contributions and levy refunded will be repayable plus interest.

· Pension Levy is not refundable where you have an entitlement to a public sector pension.

(Following the implementation of the Pension-Related Deduction with effect from 1st March 2009, staff are required to declare their overall personal pension status with regard to any public service pension scheme).

· If you are eligible for a pension levy refund please complete the PRD12A form (available at

http://www.finance.gov.ie/documents/publications/other/2011/prd12a.pdf) and return to the PAYROLL office. (Do not return to the pension’s office). Payroll will not process the levy refund until the PRD 12 is returned to them.

Please advise if you are opting for the refund of pension contributions and the pension levy. Please confirm the postal address where you would like the cheque sent to.

To confirm your options and should you have any questions please email pensionsnuigalway.ie. Refunds are not processed until after your finish date

HAVE I AN 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.

I AM A MEMBER OF THE JPS – AM I ENTITLED TO ADDED YEARS?

The Governing Authority has the absolute discretion to grant added years (to Statutory, Lecturer, Professor, Admin Officers upwards) and may do so at the date of your retirement. In the meantime, we estimate your ’potential added years’ entitlement.

We have been instructed by the HEA to advise the following in relation to added years:

“The Financial Measures (Miscellaneous Provisions) Act 2009 has not altered the rights and obligations of members under Scheme rules. Where the Scheme rules provide for discretion in relation to members' rights and benefits, that discretionary power now vests in the Minister for Education & Skills and the Minister for Finance. Please note that an Added Years award is one of the benefits subject to the discretion of the Minister for Education & Skills and the Minister for Finance and any decision on the granting of added years will only be made at retirement. Every effort has been made to ensure the accuracy of this Statement. However, as this is not a contractual document, it bears no right to benefit. All benefits from the pension scheme are governed by the scheme rules as set out in S.I. No. 98 of 2010 which is referenced in the Transfer Order (S.I. No. 125 of 2010) and by legislation in place at the date of the award. It should also be noted that this statement is not suitable for use in Family Law cases”.

As required by the Ministers since March 2010 Added Years are calculated as follows:

The greater of:

1. 1/3 of service (NUI Galway). This is further reduced by transferred / transferable service and

2 Gross Potential Years using the following formulae: Q + E, but only if Q+E+18 is greater than 25. This is further reduced by an adjustment for retirement prior to age 65 and by transferred / transferable service and previous reckonable service in NUIG

Any award at 1 or 2 is subject to:

- Reduction for retained benefits from other employments and, if on modified PRSI, any Social Welfare entitlements.

- A maximum of 10 added years being awarded and

- Overall pensionable Service from all employments not being greater than 40 years.

(Members are advised to inform the Pensions Office of such retained benefits in a previous employment - otherwise your estimated additional years will be incorrect)

I AM A MEMBER OF THE MODEL PENSION SCHEME – AM I ENTITLED TO ADDED YEARS?

(a) New Entrants whose post was advertised before 1 April 2005 and persons deemed not to be a new entrant by Section 2 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004 i.e. serving in a public body on 31 March 2004:

We have been instructed by the HEA to advise the following in relation to added years:

“Please note that any decision on the granting of discretionary benefits such as added years will only be made at retirement. Every effort has been made to ensure the accuracy of this Statement. However, as this is not a contractual document, it bears no right to benefit. All benefits from the pension scheme are governed by the scheme rules and by legislation in place at the date of the award. It should also be noted that this statement is not suitable for use in Family Law cases”.

Added years are awarded in accordance with circular letter 19 Nov 2004 to certain professional, technical and specialist staff

The following is a guide to the main provisions:

The gross award is calculated on the basis of the formula:

19 + Q + E – 25

Maximum Award is 10 years and shall not exceed actual service in the case of persons with between 5 and 10 years service & the Award is abated for:

· Previous reckonable service in NUIG (subject to certain provisions).

· Transferred/transferable service: where the member has previous service in another organisation which was / could be transferred to NUIG (subject to certain provisions).

· Retained benefits: where member has retained benefits from previous employment.

· Career break/unpaid leave/work sharing: Awards will be abated pro-rata.

· Retirement/resignations before age 60: Awards (abated on a pro-rata basis) may be granted where member retires before age 60 with a preserved pension.

(b) New Entrants whose post was advertised on or after 1 April 2005:

We have been instructed by the HEA to advise the following in relation to added years:

“Please note that any decision on the granting of discretionary benefits such as Added Years will only be made at retirement. Every effort has been made to ensure the accuracy of this Statement. However, as this is not a contractual document, it bears no right to benefit. All benefits from the pension scheme are governed by the scheme rules and legislation in place at the date of the award. It should also be noted that this statement is not suitable for use in Family Law cases”.

Added years are awarded in accordance with Circular 8/2005 to certain professional, technical and specialist staff. The following is a guide to the main provisions:

The gross award is calculated on the basis of the formula:

19 + Q + E – 25

Maximum Award is 5 years and shall not exceed actual service in the case of employees with between 2 and 5 years actual service & the Award is abated for:

· Previous reckonable service in NUIG (subject to certain provisions).

· Transferred/transferable service: where the member has previous service in another organisation which was / could be transferred to NUIG (subject to certain provisions).

· Retained benefits: where member has retained benefits from previous employment.

· Career break/unpaid leave/work sharing: Awards will be abated pro-rata.

· Retirement/resignations before age 60: Awards (abated on a pro-rata basis) may be granted where member retires before age 60 or resigns before age 60 with a preserved pension.

Note:

Q = the minimum number of years in which the required qualifications can be obtained;

E =" " the minimum number of years of essential experience required.

MARIE CURIE FELLOW'S: PENSIONABLE?
The Marie Curie exemption relates ONLY 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.

I am a pre 6 April 95 staff member (Paying D1 PRSI): How will I be affected by recent Social Welfare Changes?

Most pre 6 April 95 staff (ie. paying the modified rate of PRSI) are not affected by the Social Welfare and Pensions Act, 2011 as they do not have a social welfare entitlement. There may be some staff who are on modifed PRSI who worked in the Private Sector (paying full PRSI) prior to appointment to NUIG. Any Social Welfare entitlements they may have may be affected. Any Social Welfare entitlements which a person on modified PRSI has will reduce the added years' award.

I am a post 6 April 95 staff member (Paying A1 PRSI): How will I be affected by recent Social Welfare Changes?

A post 6 April 95 staff member pays full PRSI and has their pension calculated on a co-ordinated basis. They may receive a supplementary pension as follows:

"(a) Where a person who is in receipt of a pension or a preserved pension under this scheme is unemployed and due to causes outside his or her own control:

(i) fails to qualify for Social Welfare benefit or

(ii) qualifies for Social Welfare benefit at a reduced rate

then for so long as the preconditions set out in this subparagraph are met, the person concerned may, at the discretion of the University, be paid a supplementary pension under this Scheme.

(b) The amount of a supplementary pension payable pursuant to subparagraph (a) of this paragraph shall be the amount, if any, arrived at by the formula A -

(B+C), where A is the amount of the pension or preserved pension which would be payable to the former member if such pension or preserved pension had been calculated at the rate of 1/80th of his pensionable remuneration for each year of pensionable service, subject to a maximum of 40/80ths, B is the amount of the pension actually payable to the former member and C is the annual amount of the reduced rate of the Social Welfare benefit, if any, which is payable to the former member."

Note:

There is no change to the University retirement age. However "New Entrants" as defined in the Superannuation (Misc Provisions) Act 2004 have no compulsory retirement age and may continue to accrue pensionable service beyond age 65.”

Quailifying Age for State Pension:
At age 65 to 31 Dec 2013
At age 66 from 1 Jan 2014
At age 67 from 1 Jan 2021
At age 68 from 1 Jan 2028

Pensions & Investment Office
This page was last updated Friday, February 01, 2013