New Single Public Service Pension Scheme Presented by Séamus O’Dwyer in association with Liam Mannion, Rockcourt Financial Services Ltd 1

 PUBLIC SERVICE PENSIONS (SINGLE SCHEME AND OTHER PROVISIONS) ACT 2012  “Other Provisions” ◦ Current serving staff come within the scope of some of these provisions

 Duty to give information (S.49)  Use of PPSN (S.50)  Duty to make declarations (S.51)

 Context  Drivers  Key Features  Scope 4

 Pension Arrangements in General  Occupational Pension Schemes  Existing P.S. Pension Schemes 5

PENSION ARRANGMENTS IN GENERAL  Pillar 1.S.W. Pensions  Pillar 2.Occupational Pension  Directly linked to employment  Pillar 3.Personal, Voluntary Pensions  AVC/PRSA 6

Occupational Pension Schemes ◦ Defined Benefit (DB) ◦ Defined Contribution (DC) ◦ Hybrid This is the trend in the private sector: A new recruit to a private sector scheme would not be offered membership of a D.B. Scheme. Many members of private sector DB schemes are being moved to DC. Many DB schemes cannot meet their DB promise. Some DB scheme funds have been wound up. 7

8 EXISTING P. S SCHEMES  Defined Benefit  Final Salary  Integrated with S.W. Pension  Pension Increases based on Pay (up to now!)  Contributory  Hundreds of Schemes with (Slightly) Varying Terms NEW SCHEME  Defined Benefit  Career Average  Integrated with S.W. Pension  C.P.I. Pension Increases  Contributory  One Scheme (Except…)

 Cost:  In 1997 Accrued Liabilityest.€25 Billion ◦ Most recent estimate€100 Billion  Equity  Part of P.S. Pension Reform (Green Paper, Government Programme)  Uniform Terms (Single Scheme) Across all Public Service Bodies (with some exceptions)  Terms set out in Primary Legislation 9

 Defined Benefit  Career Average  Integrated with S.W.  C.P.I. Uprating of accrued pension credit and Pension Increases  Minimum Pension Age 68 if under 55 ◦ Increase in line with S.W. Pension Age  Maximum Retirement Age of 70 10

 On commencement on 1 January 2013, Scheme applied to all Public Service Bodies ◦ Excluded Bodies (Commercial) listed in schedule to Act.  Applies to all staff except: ◦ Staff Serving in pensionable post on commencement date or on secondment /leave of absence with right to return ◦ Recruited after 1 Jan 2013 but written offer of appointment to pensionable post prior to 1 Jan 2013 ◦ Pensionable staff returning on same contract of employment * ◦ Pensionable staff returning to Public Service within 26 weeks* * These conditions may be terminated by Ministerial Order

 The Calculation  Integration in the Scheme  Practical examples and Impact on Pension Benefits  Contributions from Scheme Members  Contributions v Benefits debate  Additional Features of the New Scheme

Principles of Career Average Pension Scheme 13

Reflecting the career average principle:  Accrual (pension credit) no longer calculated in terms of service but in terms of:  “Referable Amounts” ◦ This is the pension credit a member earns in a calendar year. It is expressed as a money amount and is uprated each year to pension age by C.P.I. ◦ There is a separate Pension and Lump Sum referable amount calculation

Referable Amounts:  For Annual Pension ◦ 0.58% of pensionable pay and allowances which are less than 3.74 x contributory state pension (CSP) – about €45,000 ◦ 1.25% of pensionable pay and allowances greater than 3.74 x CSP  For Lump Sum ◦ 3.75% of pensionable pay and allowances

 Referable amounts are ‘banked’ for each year  What is a year? ◦ A year is the Tax Year 16

 Pension at retirement is the sum of the career “pension referable amounts” increased by CPI during career  Lump Sum is the sum of the career “lump sum referable amounts” increased by CPI during career 17

 The Pension Calculation (0.58% %) reflects integration of pension with CSP but includes a tapering element to favour the lower paid.  Pro-Rata applies for work-sharing. This will impact on how referable amounts are “tracked” by employers 18

A “referable amount” is calculated during each Tax Year for each member for Pension and Lump Sum. CPI is added at the end of year 2 and up to the beginning of the final year of service. The Examples in the next 2 slides show how Pension and Lump Sum accrue independently 19

**In addition State Pension (Contributory) is also payable 20

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 3.5% of net pensionable remuneration  3% of pensionable remuneration Note: “net pensionable remuneration” is pensionable remuneration minus twice the single rate of Contributory State Pension. 22

The Contributions v Benefits debate 23

 Vesting Period  Minimum Pension age  Maximum Retirement Age  Pensionable Allowances  Ill- health retirement - added years?  Preserved Benefits ◦ Ill-health ◦ death 24

 Death in service  Cost Neutral Early Retirement  Simultaneous employments  Transfer Values  Re-employment having received a refund of contributions 25

 Purchase of Referable amounts?

 Survivor’s Pension  Children’s Pension 27

 Church annulment  State Decree of Nullity  Divorce abroad  Marriage abroad  Legal Separation  Judicial Separation Family Law Act  Divorce Family Law (Divorce) Act  Civil Partnership Act

 A member’s Pension, Lump Sum and Death in Service entitlements along with an actuarial valuation of the pension entitlement may be used by the Courts to make a Pension Adjustment Order for the spouse or dependants  A PAO can be made against the Death Gratuity, Retirement Lump Sum, Member’s Pension or Spouse’s Pension 29

 PAOs – made by a Court under the Family Law Acts  These bind the Scheme to pay to the non-member spouse a specified part of the pension which would normally be paid to the member or the member’s current spouse  Can be varied in some circumstances  PAOs override the Scheme rules 30

Provision for Review of the Scheme 31

Obligations on Employers in the Act  Single Scheme ◦ Calculation of referable amounts and contributions in each pay period ◦ Statement to each scheme member within 6 months of end of tax year or on leaving service:  Total contributions paid in that tax year  Referable amounts accrued in that tax year  Cumulative amount of Pension Credit (Uprated) ◦ Accounting for Contributions 32

Scheme Booklet 33

 Defined Benefit  Allowances  CPI  No 40 year cap  Mobility  Scheme is in Primary Legislation 34

 Superannuation Advice  Non Union affiliated  Independent Advice on: Income Protection Additional Death in Service Cover Investments  Transfer of UK Pensions 35 Regulated by the Central Bank Reg. No. C134810

 Rockcourt Financial Services Ltd, 6-9 Trinity Street, Dublin 2.  Rockcourt Financial Services Ltd, Main street, Glenamaddy, via Castlerea, Co. Galway.  Tel: /  Rockcourt Financial Services Ltd, trading as Rockcourt, is regulated by the Central Bank of Ireland C

 The University is pleased to facilitate this presentation but it does not endorse Rockcourt or any Financial Services Company.  This Presentation is intended as a guide only. It is not a legal interpretation of the Scheme. Benefits will only be payable on the basis on the rules, relevant legislation and circulars in force at the time of payment.  Rockcourt Financial Services Ltd is regulated by the Central Bank ref. C