How public servants dodge pension bullet

Changes to laws delaying retirement to 66 apply only to private sector workers

PUBLIC servants have escaped controversial new pension rules that delay the payment of the State pension.

Thousands of workers in the private sector are being forced to draw the dole as their employers compel them to leave work at the age of 65.

The State contributory pension is now paid only from the age of 66, forcing these retirees to claim Jobseekers’ Benefit – meaning they are getting almost €50 a week less than if they were able to get their pension.

However, the Irish Independent can reveal that public servants are immune to the rule change.

Pensions experts said it showed the State has one rule for its own and another for the rest.

It has emerged that public servants get what it called a “supplementary pension” until they qualify for the State contributory pension at the age of 66.

This is despite public servants recruited since 1995 being part of the Pay Related Social Insurance (PRSI) system that funds State pensions.

They get the full supplementary pension payment even if they do not have sufficient PRSI contributions to give them the maximum State pension.

The Department of Public Expenditure has confirmed the existence of the “supplementary” pension, which is basically a substitute State pension until public servants reach the State pension age.

Pension experts said this meant that public servants had insulated themselves from the decision to raise the State pension age.

HERE is how public servants avoid having to wait to get the State pension – and even those who retire early from public service jobs can get a State contributory pension-type payment as soon as they leave their job.

Take a garda who joined in May 1995 at age 25. They pay PRSI, so their public service pension is integrated with their State contributory pension entitlement. But they are not due to get the State pension until 68.

Let’s say that they retire in 2025 at the age of 55 after 30 years’ service, on full pension. Their salary at retirement is, say, €90,000. The public service defined-benefit element of their pension will be €32,348.

The garda is not due to get the State contributory pension until 68, a wait of 13 years.

However, provided they remain unemployed and are not receiving any social welfare benefits, they will get a “supplementary pension” of €12,652 a year between now and 68. This will bring their total public service pension up to 50pc of their salary at retirement. But the goodies don’t end there.

Let’s say that because they only paid PRSI for 30 years, out of a possible 43-year working life, they will not get the maximum rate of the State pension at 68. They might, because of the averaging system, get €218 a week, or €11,372 a year, instead of the maximum €12,652 year. But that’s not a problem because they will get a supplementary pension to bring them up to the maximum State pension amount. All told, the total pension payments will amount to €45,000 a year.