Financial Adviser Paul Heverin has spent many year’s working with teachers across Ireland. This means he has a particular expertise in the area. Learn more about the teachers’ pension in this article.
Teacher pensions are not straightforward or easy to understand. So, it is not surprising that you find yourself reading this blog. I could write a thesis on the topic of teachers and their pensions, but, chances are, no one would read it!
There are currently 4 different pensions within the Department of Education, which are outlined in the below table. This table also covers people who teach in different parts of the public sector, for example, Education Training Boards, the Prison Service and so on.
Year | Retirement Age | Pension type | Stamp |
Pre 5th April 1995 | 55 | Employer pension only, no Social Welfare payments | D1 |
Post 5th April 1995 | 55 | Employer pension plus Social Welfare payments | A1 |
Post 5th April 2004 | 65 | Employer pension plus Social Welfare payments | A1 |
Post 1st Jan 2013 | 66 | Employer pension plus Social Welfare payments | A1 |
Pension age Ireland
Your pension scheme is determined by your first date of paid employment in the public sector. In the past, I have successfully upgraded teachers into the previous pension group because they were subbing at least one day in the previous 6 months before the threshold date, or they worked in a different section of the public sector and did not know the rules. Post 2013, teachers are on a different pay-scale and some may get an extra teaching allowance, so it is very important to be in the correct pension scheme. It can be very costly if you find yourself landed in the wrong bracket.
To get a full pension, you need to have 40 years of service. If you have less than 40 years, then it is pro rata. If you have more than 40 years, you do not get extra payment or benefits from your contributions and your pension will be the same as having 40 years service.
To make things more complicated, there are different rules for the four different pensions. There is also a small difference between Primary and Secondary Teachers.
Your pension; a timeline
Pre 5th April 1995. Teachers receive a pension from the Employer and do not get a social welfare pension on top. If you have 40 years of service, this will be half of your final pension salary plus your best 3 years pay in the last 10 and a once off tax free gratuity of 1.5 times. You are allowed to retire under what is called the 35-year rule. Once you have been teaching for 35 years you can retire without any penalties. Pre 1995 can also do PAYE work in retirement without affecting their pension
Post 5th April 1995 this is very similar to the above. Your pension will be the same amount, you can also retire under the 35-year rule. The main difference is the way you are paid. You will get your pension from 2 sources. Your Employer will pay your pension, but you will also get a payment from Social Welfare. If you do any PAYE work in retirement between 55 and 66 you will lose this payment from Social Welfare.
Post 5th April 2004 Your pension will be calculated the same way post 1995 teachers, you are not entitled to the 35-year rule like the two groups above. You will get your pension from 2 sources. Your Employer and a Social Welfare payment. Your retirement age has gone from potentially 55 up to 65. If you wish you can work post retirement without losing your Social Welfare payment.
Post 1st Jan 2013 you have a totally different pension than the 3 groups above. With the above 3 groups, their employer uses their final salary to calculate their pension. Post 2013 have a career average pension. This means your employer takes your starting salary and your final salary and bank your entitlements annually. So, it’s very likely that after 40 years’ service, your pension will be less than the other groups. You should be receiving an annual statement from your Employer showing how much of a pension that you have built up to date.
As you can see, a Teacher’s pension is very complicated and this is a brief synopsis of it!
- Are you being paid correctly? You should get recognition for teaching abroad or in private schools. If you have practical experience working in the industry in the subject you are teaching, you should get extra points of scale. This rule also counts if you are/were a SNA. The maximum point of scale that you can claim is 5 points.
- Applying for tax credits. Teachers also get an extra tax credit, but many Teachers don’t realise you have to apply for it.
- Exploring job sharing opportunities. Job sharing does not affect your retirement age, but it does affect your pension. If you want to job share, the best way to do it is through parental leave. This means you get full pay during the holidays rather than sharing it with a sub.
If you’re still curious as to how the teacher’s pension works or if you have some burning questions, I’d be delighted to speak with you about it. Please contact me by emailing paul@sysgroup.ie.
Do you need to review your pension and plan for retirement? Make your appointment today and request a call back!
