1. University of Limerick Superannuation Schemes
Brief Outline

2. Superannuation Scheme
Membership is compulsory for all permanent and contract staff.
Schemes administered by UL and are based on the Public Sector Model Schemes.
Defined Benefit.
Pay-as-you-go.

3. Benefits On Retirement On Death in Service
Provides a retirement gratuity and pension for members who reach retirement age or who retire early on ill health grounds before normal retirement age.
On Death in Service
Provides for the payment of a lump sum death benefit to the member’s estate/legal personal representative should the member die in service.

4. Spouse’s & Children’s Scheme Benefits I
The schemes provide payments to the member’s spouse and/or children should the member die in service or retirement.
Death in Service or Ill-Health Retirement
The spouse’s and children’s pensions are based on the number of years the staff member would have served to age 65 (to a max. of 40 years).  

5. Spouse’s & Children’s Scheme Benefits II
Death in Retirement
Spouse’s and children’s pensions are based on the member’s pension already in payment.
Calculation of Spouse’s and Children’s Pensions
A spouse’s pension is normally half that of the pension or potential pension paid or payable to the member (called “the deceased’s pension” – DP). A child typically receives one third of the spouse’s pension where there are up to three children.

6. Spouse’s & Children’s Pensions III
Dependants
Fraction of DP to Spouse
Fraction of DP to Children
Total Fraction of DP
Spouse only
½ of deceased’s pension -
Spouse and 1 child
1/6 of deceased’s pension
2/3 of deceased’s pension
Spouse and 2 children
1/3 of deceased’s pension
5/6 of deceased’s pension
Spouse and 3 or 3+ children
Full amount
1 child no spouse
2 or 2+ children no spouse

7. Frequently Asked Questions I
How much do I pay?  
This is dependent on whether you pay Class A or Class D PRSI.
Those who pay Class D PRSI pay 5% of full salary.
Those who pay Class A PRSI pay 1.5% of full salary and 3.5% of net salary (salary less twice annual SW pension).
There is an additional contribution for the Spouse’s and Children’s Scheme which is 1.5% of full salary for all staff.
How many years do I have to work to qualify for a full pension and gratuity?
Your benefits are based on a maximum of 40 years service.

8. Frequently Asked Questions II
What counts as ‘service’?
Permanent service with UL
Contract or part-time service with UL for which contributions have been made, where relevant
Service transferred from Public Sector/Local Authorities
Purchased Service
Notional Added Years
Note: Time spent on career break or periods of unpaid leave are not counted as service.

9. Frequently Used Terms Class A PRSI – Integrated Pension
Staff receive a pension from UL and are also entitled to receive the State contributory old age pension
Class D PRSI
Staff are not entitled to State pension, therefore they receive their entire pension from one source, UL.

10. Pensions Act 2004 In summary, the Act:
The Public Service Superannuation (Miscellaneous Provisions) Act, 2004, came into effect on 1 April 2004. 
In summary, the Act:
makes 65 the minimum age at which pensions may be paid to all new entrants to the public service;
provides that all new entrants to the public service will not be required to retire on grounds of age;
The Act does not change the terms and conditions of public servants who were serving on 31 March 2004 (minimum pension age is 60 and membership must cease at end of academic year after reaching age 65).
The full text of the Act is available on the Department of Finance website –

11. Albert(a) has just turned 65 and is retiring after 40 years service
Albert(a) has just turned 65 and is retiring after 40 years service. His retiring salary is €68,450. He/she joined the Superannuation and Spouse’s & Children’s Schemes on entry to the organisation.
BENEFIT CALCULATIONS
CLASS A PRSI
Annual Pension
€40,057 x 40/200 = € 8,011
€28,393 x 40/80 = €14,197
Plus State Pension €12,017
€34,225
Gratuity
€68,450 x 40/80 x 3 = €102,675
BENEFIT CALCULATIONS
CLASS D PRSI
Annual Pension
€68,450 x 40/ = €34,225
Gratuity
€68,451 x 40/80 x 3 = €102,675

12. Ger has just turned 65 and is retiring after 20 years service
Ger has just turned 65 and is retiring after 20 years service. His retiring salary is €68,450. He/she joined the Superannuation and Spouse’s & Children’s Schemes on entry to the organisation.
BENEFIT CALCULATIONS
CLASS A PRSI
Annual Pension
€40,057 x 20/200 = € 4,006
€28,393 x 20/80 = € 7,098
Plus State Pension €12,017
€23,121
Gratuity
€68,450 x 20/80 x 3 = €51,338
BENEFIT CALCULATIONS
CLASS D PRSI
Annual Pension
€68,450 x 20/ = €17,113
Gratuity
€68,451 x 40/80 x 3 = €51,338

13. Transferring Service
The Public Service Transfer Network and Local Government Transfer Network allows service to be transferred between bodies. Members may operate under different transfer options but this does not normally affect the transfer of the individual’s service.
An example of organisations included in the transfer networks include:
Civil Service Departments
Education Sector
Health Sector
Semi State Bodies
State Agencies
Local Authorities

14. Leaving Service What happens if you leave UL?
If you are taking up employment within the public sector you can transfer your UL service to that body.
If you are taking up employment within the private sector or simply leaving employment altogether and (i) have more than 2 years service you must preserve your benefits which will become payable from age 60/65 or you may avail of cost neutral early retirement in certain circumstances, OR
If you leave with less than 2 years pensionable service you must take a refund of your contributions, less tax which is currently 20%.

15. Increasing Pension Benefits I
For members who will have less than 40 years service at retirement it is possible to increase service by one of the following methods:
Purchase of Additional Years OR
Additional Voluntary Contributions
Tax relief if available on both methods subject to limits set by the Revenue Commissioners.

16. Increasing Pension Benefits II
Purchase of Notional Service
The cost of purchasing service is based on actuarial tables produced by the Department of Finance. Each additional year costs a percentage of salary, and the percentage increases with age.
There are two sets of tables, one for those wishing to retire at 65 and another for those who intend to retire at 60 (age 60 not available to new entrants).
Normally, added years are purchased by periodic contribution up to retirement age, however, it is possible to purchase added years by lump sum.

17. Maximum PNS Service Purchasable
Actual service at 60/65 Maximum service which may be bought
20 years or more 40 years minus projected service at 60/65
19 years 17 years
18 years 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

18. Increasing Pension Benefits III
AVC Scheme
Additional voluntary contributions are deducted from salary each pay day or on a once off basis and invested by brokers on your behalf.
Under the AVC Scheme (which is a DC scheme) your eventual benefits depend on the performance of your contributions.
For further information full details of the University of Limerick AVC plan are available on the HR website

19. Tax Relief
Under Irish tax regulations, you can get full tax relief for superannuation purposes subject to the following limits:
up to 30 years of age 15% of annual salary
years of age 20% of annual salary
years of age 25% of annual salary
years of age 30% of annual salary
years of age 35% of annual salary
Over % of annual salary
Maximum salary allowable for relief = €150,000 (in 2010)
No relief allowable on income levy

20. Pension Changes Budget 2010 (1)
Public Service pay cuts will not affect the pension (and lump sum) entitlements of those retiring in 2010 – the position of those retiring in 2011 and beyond to be considered further – now extended to end February 2012 (National Recovery Plan 2011 – 2014 and Budget 2011).
Retirement lump sums below €200,000 will not be taxed.
The treatment of retirement lump sums above €200,000 and the tax treatment of pensions, including the consolidated 33 per cent rate of relief on contributions (recommended by the Commission on Taxation) will be considered as part of the Government’s response to the National Pensions Framework published by the Minister for Social and Family Affairs.

21. Pension Changes Budget 2010 (2)
A new single pension scheme for all new entrants to the public service will be introduced. The legislation will be introduced in 2010 and the scheme will be in place by the end of 2010.
As part of the reform of public service pension arrangements, the current pension increase arrangements will be reviewed.
Consideration will be given to linking pensions to increases in the cost of living.
Pending that review, it is not the intention to apply the pay cuts announced in the Budget to existing public service pensioners.

22. PRSI & Levy Changes Budget 2011 (1)
Health Levy (4%/5%) and Income Levy (2%/4%/6%) to be replaced by a single universal social charge
Standard rate of income tax (20%) plus PRSI changes plus universal charge = effective 31% tax rate
Higher rate of income tax (41%) plus PRSI changes plus universal charge = effective 52% tax rate

23. PRSI & Levy Changes Budget 2011 (2)
Universal Social Charge Rates
Those earning less than €4,004 pa exempt
2% on all income up to €10,036
4% on income between €10,037 and €16,016
7% on income above €16,016
Old System
6% on income between €26,000 and €75,036 (combined health and income levies) – income levy only (2%) on income up to €26,000
PRSI
Ceiling of €75,036 removed
Self employed workers rate increased from 3% to 4%
Modified PRSI rate increased to 4% for earnings above €75,036

24. Tax Treatment of Pensions Budget 2011
Employee PRSI and Health Levy (now the universal social charge) relief on pension contributions abolished – approx. 8% reduction in relief (49% to 41% for a person earning less than €75,036) – and National Recovery Plan 2011 – 2014 says the relief will reduce to 34% in 2012, 27% in 2013 and 20% in 2014.
Earnings cap for tax relievable pension contributions reduced from €150,000 pa to €115,000 pa
The portion of retirement lump sums above €200,000 will be taxed (20% up to 25% of SFT - €575,000 wef 2011 – and balance at 41%
Maximum allowable tax relieved pension fund (Standard Fund Threshold - SFT) reduced (from €5.4 million to €2.3 million)
PRSI exemption for employers on payments to staff pension schemes to be reduced by 50% in 2011

25. Public Sector Pay &Pension Changes Budget 2011 (1)
Number of public service pensioners increased by 36% between 2006 and 2010
Cost of public service pensions increased by 53% in the same period
Therefore => public service pension cuts from 2011
Pensions below €12,000 pa unaffected
6% reduction in pension income between €12,001 and €24,000
9% reduction in pension income between €24,001 and €60,000
12% reduction in pension income above €60,000

26. Public Sector Pay & Pension Changes Budget 2011 (2)
New entrants to the public service will be paid 10% less than the rates paid to current staff and will start at the first point of the salary scale
Those who retire after February 2012 (who will have their benefits based on reduced pay as introduced in January 2010 – on average a 7% reduction) will not be subject to the pension cuts being applied to public service pensioners from 2011

27. New Single Pension Scheme Budgets 2010/2011
To apply to new entrants to public service from 2011 (what date?) onwards.
Raise minimum pension age to 66 and link to State Pension age.
Maximum retirement age of 70.
Career average earnings.
Pension Increases to be linked to CPI.
Employee pension contribution and accrual rate to be considered as part of new scheme.
Legislation for new scheme to be published shortly

28. Contact Information
Copies of this presentation will be available on the University’s intranet.
If you would like to discuss any specific questions please contact