S.I. No. 73/2020 - Single Public Service Pension Scheme (Purchase and Transfer of Retirement Benefits – Permanent Defence Force) Regulations 2020


Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 17th March, 2020.

I, PASCHAL DONOHOE, Minister for Public Expenditure and Reform, in exercise of the powers conferred on me by section 8 (2)(f) of the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 (No. 37 of 2012), hereby make the following regulations:

Citation and commencement

1. (1) These Regulations may be cited as the Single Public Service Pension Scheme (Purchase and Transfer of Retirement Benefits – Permanent Defence Force) Regulations 2020.

(2) These Regulations shall come into operation on 1 April 2020.

Interpretation

2. (1) In these Regulations—

“Act of 2012” means the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 (No. 37 of 2012);

“actual purchase” shall be construed in accordance with Regulation 4(3);

“normal retirement age”, in relation to a PDF Scheme member, means 50 years of age;

“PDF Scheme member” means a Scheme member to whom section 26(1)(b) of the Act of 2012 relates;

“Principal Regulations” means the Single Public Service Pension Scheme (Purchase and Transfer of Retirement Benefits) Regulations 2019 (S.I. No. 252 of 2019);

“purchase multiplier”, in relation to a PDF Scheme member, means the factor specified in column (2) of the Table to this Regulation opposite the total period in years specified in column (1) of that Table that the person concerned will have spent as a Scheme member were the person’s membership to continue to his or her normal retirement age (and any period that is not a whole year shall not be counted for the purposes of this definition);

“relevant Scheme member” means a PDF Scheme member in respect of whom, subject to paragraphs (2) and (3), the following requirements are complied with:

(a) the member has completed the vesting period, and

(b) the member would have spent not less than 9 years as a Scheme member by the time he or she has reached his or her normal retirement age;

“transfer value” shall be construed in the same manner as subsection (2) of section 34 of the Pensions Act 1990 (No. 25 of 1990) provides that the expression “transfer payment” in that subsection is to be construed for the purposes of Part III of that Act.

(2) Paragraph (a) of the definition of “relevant Scheme member” in this Regulation does not apply in the case of a PDF Scheme member who is providing the consideration for the purchase of the referable amounts in accordance with Regulation 5(1) and as respects whom the completion of the vesting period before his or her normal retirement age is possible.

(3) Paragraph (b) of the definition of “relevant Scheme member” in this Regulation does not apply in the case of a PDF Scheme member who is providing the consideration for the purchase of the referable amounts in accordance with Regulation 5(1).

(4) A reference in these Regulations to—

(a) an agreement previously entered into by a relevant Scheme member under Regulation 4(1), or

(b) referable amounts previously purchased by a PDF Scheme member,

shall be construed, respectively—

(i) as a reference to such an agreement, irrespective of whether the method that it provides for the provision of consideration for the purchase of referable amounts (the “method of purchase”) is actual purchase or that provided for in Regulation 5(1), or

(ii) as a reference to referable amounts that have been previously purchased by the member, irrespective of whether the method of purchase was actual purchase or that provided for in Regulation 5(1).

Table

(1) Total period, in years, of Scheme membership to normal retirement age

(2) Purchase multiplier

9

1

10

2

11

3

12

4

13

5

14

7

15

9

16

11

17

13

18

15

19

17

20 or more

20

Periods equivalent to time served on a full-time basis to be reckoned

3. (1) For the purpose of any provision of these Regulations that operates by reference to the period spent by a person as a Scheme member:

(a) periods of service given, otherwise than on a full-time basis, by the member shall be as reckonable as periods given on a full-time basis by a member;

(b) the full-time equivalent of the first-mentioned periods in subparagraph (a) is the period that shall be used for the foregoing purpose.

(2) For the avoidance of doubt, nothing in paragraph (1) affects the construction of the following definitions, namely the definition of “E” in Regulation 7, the definition of “D” in Regulation 10, the definition of “E” in Regulation 12(3) and the definition of “D” in Regulation 12(5).

Agreement to purchase referable amounts

4. (1) The Minister for Defence may enter into one or more agreements with a relevant Scheme member providing for the inclusion of certain money amounts as referable amounts, in respect of the pension or lump sum of the member, for the purposes of the calculation of benefits sections.

(2) Subject to paragraph (6), each such agreement shall provide for its duration to be of 12 months and only one such agreement shall be entered into in any period of 12 months.

(3) The provision made by such an agreement, for the foregoing inclusion of money amounts, shall be by way of purchase by the member of referable amounts in accordance with—

(a) paragraph (4), or

(b) paragraph (4) and Regulation 5,

and, where such provision for that purchase is made in accordance with paragraph (4) (without the member’s availing himself or herself of Regulation 5), such purchase is referred to in these Regulations as “actual purchase”.

(4) The rate - expressed as a certain amount of euro to provide—

(a) one euro of pension payable per annum from a certain age, or

(b) in the case of lump sum - one euro of lump sum payable at a certain age,

at which referable amounts may be purchased, pursuant to an agreement under paragraph (1) (in the Schedule referred to as the “appropriate rate”), is set out in the relevant Table contained in the Schedule.

(5) Subject to paragraph (6), no agreement under paragraph (1) shall be entered into if—

(a) the referable amounts proposed, under that agreement, to be purchased by the relevant Scheme member concerned, or

(b) the referable amounts, so proposed to be purchased, taken together with the referable amounts, if any, purchased by the relevant Scheme member pursuant to the one or more agreements previously entered into by him or her under paragraph (1) and the referable amounts, if any, purchased by the relevant Scheme member pursuant to one or more agreements previously entered into by him or her under Regulation 4(1) of the Principal Regulations,

would (were the agreement carried into effect) have the effect that the aggregate of the referable amounts purchased by that member exceeds the limit provided under Regulation 6 or 9, as the case may be, in respect of him or her.

(6) Paragraphs (2) and (5) do not apply if the agreement or agreements concerned provide for the purchase of the referable amounts by the means referred to in Regulation 5.

(7) In paragraph (4) “certain amount of euro” includes, where the context of the particular Table (contained in the Schedule) admits, a certain amount of cent.

Transfer of existing retirement benefits

5. (1) The consideration for the purchase by a person of referable amounts in accordance with an agreement under Regulation 4(1) may be provided by way of encashment of the transfer value of amounts—

(a) in respect of service of the person referred to in section 18(a) of the Act of 2012,

(b) accrued under a retirement benefit scheme (of which the person is or was a member) approved by the Revenue Commissioners in accordance with Chapter 1 of Part 30 of the Taxes Consolidation Act 1997 (No. 39 of 1997), other than a pre-existing public service pension scheme, or

(c) from a Personal Retirement Savings Account (held by the person) approved by the Revenue Commissioners in accordance with Chapter 2A of Part 30 of the Taxes Consolidation Act 1997 .

(2) All transfer values relating to any of the amounts referred to in paragraph (1) shall be included in the provision of consideration, in accordance with paragraph (1), for the purchase of referable amounts.

(3) Regulation 12 imposes a limit on the referable amounts that may be purchased in the case of the provision of consideration, in accordance with paragraph (1), for the purchase of referable amounts.

Limit (as mentioned in Regulation 4(5)) on purchase of referable amounts in respect of pension

6. The limit referred to in Regulation 4(5), in respect of pension, is whichever of the following amounts is the lesser, namely—

(a) the amount calculated in accordance with the formula set out in Regulation 7 - referred to in that Regulation as the “first formula for Regulation 6”; and

(b) the amount calculated in accordance with the formula set out in Regulation 8 - referred to in that Regulation as the “second formula for Regulation 6”.

First formula for purposes of Regulation 6

7. The first formula for Regulation 6 is:

A/2 – B – C – (D x E)

where, as at the end of the most recent year—

A is the PDF Scheme member’s annual pensionable remuneration,

B is the annual maximum personal rate of the contributory State Pension payable to a person who has no adult dependant or child dependant,

C is the total of referable amounts in respect of pension accrued or previously purchased by the PDF Scheme member, whether by way of an agreement under Regulation 4(1) or an agreement under Regulation 4(1) of the Principal Regulations,

D is the referable amounts in respect of pension calculated for the PDF Scheme member in that year, and

E is the period of time in years to the PDF Scheme member’s normal retirement age (and any period that is not a whole year shall not be counted for the purposes of this definition).

Second formula for purposes of Regulation 6

8. The second formula for Regulation 6 is:

A x B

where—

A is the referable amounts in respect of pension calculated for the PDF Scheme member in the most recent year, and

B is the purchase multiplier in respect of the PDF Scheme member.

Limit (as mentioned in Regulation 4(5)) on purchase of referable amounts in respect of lump sum

9. The limit referred to in Regulation 4(5), in respect of lump sum, is whichever of the following amounts is the lesser, namely—

(a) the amount calculated in accordance with the formula set out in Regulation 10 - referred to in that Regulation as the “first formula for Regulation 9”; and

(b) the amount calculated in accordance with the formula set out in Regulation 11 - referred to in that Regulation as the “second formula for Regulation 9”.

First formula for purposes of Regulation 9

10. The first formula for Regulation 9 is:

(A x 1.5) – B – (C x D)

where, as at the end of the most recent year—

A is the PDF Scheme member’s annual pensionable remuneration,

B is the total of referable amounts in respect of lump sum accrued or previously purchased by the PDF Scheme member, whether by way of an agreement under Regulation 4(1) or an agreement under Regulation 4(1) of the Principal Regulations,

C is the referable amounts in respect of lump sum calculated for the PDF Scheme member in that year, and

D is the period of time in years to the PDF Scheme member’s normal retirement age (and any period that is not a whole year shall not be counted for the purposes of this definition).

Second formula for purposes of Regulation 9

11. The second formula for Regulation 9 is:

A x B

where—

A is the referable amounts in respect of lump sum calculated for the PDF Scheme member in the most recent year, and

B is the purchase multiplier in respect of the PDF Scheme member.

Limit (as mentioned in Regulation 5(3)) on purchase of referable amounts in respect of pension or lump sum

12. (1) In this Regulation—

(a) “relevant purchase agreement” means an agreement under Regulation 4(1) that provides for the purchase of referable amounts by the means referred to in Regulation 5; and

(b) a reference to the purchase of referable amounts—

(i) in a case where the context is limited to the purchase of such amounts under a relevant purchase agreement, shall be construed as a reference to the provision of consideration, in accordance with Regulation 5(1), for the purchase of such amounts, and

(ii) in a case where the context is not so limited, shall be construed in the same manner as Regulation 2(4)(ii) provides that a reference to referable amounts previously purchased by a PDF Scheme member is to be construed.

(2) No relevant purchase agreement shall be entered into if—

(a) the referable amounts proposed, under that agreement, to be purchased by the relevant Scheme member concerned, or

(b) the referable amounts, so proposed to be purchased, taken together with the referable amounts purchased by the relevant Scheme member pursuant to the one or more agreements under Regulation 4(1) previously entered into by him or her and the referable amounts, if any, purchased by the relevant Scheme member pursuant to one or more agreements previously entered into by him or her under Regulation 4(1) of the Principal Regulations,

would (were the agreement carried into effect) have the effect that the aggregate of the referable amounts purchased by that member exceeds the limit provided under—

(i) paragraph (3) as concerns pension, or

(ii) paragraph (5) as concerns lump sum,

in respect of him or her.

(3) The limit referred to in paragraph (2)(i) is the amount calculated in accordance with the following formula:

A/2 – B – C – (D x E)

where, subject to paragraph (4), as at the end of the most recent year—

A is the PDF Scheme member’s annual pensionable remuneration,

B is the annual maximum personal rate of the contributory State Pension payable to a person who has no adult dependant or child dependant,

C is the total of referable amounts in respect of pension accrued or previously purchased by the PDF Scheme member, whether by way of an agreement under Regulation 4(1) or an agreement under Regulation 4(1) of the Principal Regulations

D is the referable amounts in respect of pension calculated for the PDF Scheme member in that year, and

E is the period of time in years to the PDF Scheme member’s normal retirement age (and any period that is not a whole year shall not be counted for the purposes of this definition).

(4) In the case of a PDF Scheme member who has been a Scheme member for less than one year, A and D shall be calculated as if the pensionable remuneration in respect of that member for the most recent year were equal to the pensionable remuneration in respect of that member for the most recent pay period, annualised as appropriate.

(5) The limit referred to in paragraph (2)(ii) is the amount calculated in accordance with the following formula:

(A x 1.5) – B – (C x D)

where, subject to paragraph (6), as at the end of the most recent year—

A is the PDF Scheme member’s annual pensionable remuneration,

B is the total of referable amounts in respect of lump sum accrued or previously purchased by the PDF Scheme member, whether by way of an agreement under Regulation 4(1) or an agreement under Regulation 4(1) of the Principal Regulations,

C is the referable amounts in respect of lump sum calculated for the PDF Scheme member in that year, and

D is the period of time in years to the PDF Scheme member’s normal retirement age (and any period that is not a whole year shall not be counted for the purposes of this definition).

(6) In the case of a PDF Scheme member who has been a Scheme member for less than one year, A and C shall be calculated as if the pensionable remuneration in respect of that member for the most recent year were equal to the pensionable remuneration in respect of that member for the most recent pay period, annualised as appropriate.

Reduction or refund of purchased referable amounts in certain circumstances

13. (1) Where a PDF Scheme member has entered into an agreement under Regulation 4(1) of the Principal Regulations to purchase referable amounts on the basis of retirement at a specified age and subsequently retires or is discharged at an age that is less than the specified age (other than where the PDF Scheme member is a person to whom section 29(2) of the Act of 2012 applies), the referable amounts purchased shall, for the purposes of the calculation of benefits sections, be reduced by reference to the PDF Scheme member’s age at the date of retirement or discharge in accordance with actuarial tables approved and issued from time to time by the Minister.

(2) Paragraph (3) or, as appropriate, paragraphs (4) and (5) applies or apply where a PDF Scheme member enters into an agreement under Regulation 4(1) or, prior to being a PDF Scheme member, entered into an agreement under Regulation 4(1) of the Principal Regulations, and subsequently ceases to be a Scheme member.

(3) If, in the case of the PDF Scheme member’s cesser of membership, as referred to in paragraph (2), the circumstances are such that the minimum number of years, referred to in the requirement specified in paragraph (b) of the definition of “relevant Scheme member” in Regulation 2(1), spent by him or her as a Scheme member has not eventuated, then all referable amounts purchased in accordance with the agreement under Regulation 4(1) or Regulation 4(1) of the Principal Regulations or under both of those provisions, as the case may be, shall be refunded to the PDF Scheme member.

(4) If, in the case of the PDF Scheme member’s cesser of membership, as referred to in paragraph (2), the circumstances are such that both of the conditions specified in paragraph (5) are satisfied, then there shall be refunded to the PDF Scheme member the value of the referable amounts equal to the difference between the sum first-mentioned in subparagraph (b) of paragraph (5) and the sum referred to in that subparagraph (b) as the notionally recalculated sum of referable amounts.

(5) The conditions referred to in paragraph (4) are—

(a) the minimum number of years, as referred to in paragraph (3), spent by the person as a Scheme member does eventuate, and

(b) the number of years the person continues to spend (following that minimum number of years) as a Scheme member has the result that the sum of the referable amounts purchased by the person in accordance with the one or more agreements under Regulation 4(1) and the referable amounts, if any, purchased by the relevant Scheme member pursuant to one or more agreements previously entered into by him or her under Regulation 4(1) of the Principal Regulations, exceeds the following notionally recalculated sum of referable amounts, that is to say, the sum of the referable amounts that the person would have been permitted (by virtue of Regulation 8 or 11, as the case may be) to purchase under those agreements had the formula, in Regulation 8 or 11, as appropriate, been applied on the date of the person’s ceasing to be a Scheme member.

(6) A reference in paragraphs (3) to (5) to a referable amount shall not include a reference to a referable amount purchased by the means referred to in Regulation 5(1) or Regulation 5(1) of the Principal Regulations.

SCHEDULE

Rate at which amounts must be paid for the purpose of purchasing referable amounts

1. The appropriate rate is set out in—

(a) Table 1 - in a case where the amount concerned is pension;

(b) Table 2 - in a case where the amount concerned is lump sum.

2. For the foregoing purposes, there is set out in column (2) of whichever of the aforementioned Tables is appropriate the amount referred to in Regulation 4(4)(a) or (b), as the case may be, that shall apply opposite the mention in column (1) of that Table of the age next birthday of the relevant Scheme member (that is to say, the member’s age at the next anniversary of the member’s birth falling after his or her application for purchase of the referable amounts).

Table 1

Pension purchase rates by reference to Normal Retirement Age 50

Age Next Birthday (1)

Cost of purchasing €1 Pension p.a. from age 50 (2)

50

38.24

49

38.29

48

38.35

47

38.41

46

38.46

45

38.52

44

38.58

43

38.64

42

38.69

41

38.75

40

38.81

39

38.87

38

38.93

37

38.98

36

39.04

35

39.10

34

39.16

33

39.22

32

39.28

31

39.33

30

39.39

29

39.45

28

39.51

27

39.57

26

39.63

25

39.69

24

39.75

23

39.81

22

39.87

21

39.93

Table 2

Lump-sum purchase rates by reference to Normal Retirement Age 50

Age Next Birthday (1)

Cost of purchasing €1 Lump-sum from age 50 (2)

50

1.00

49

1.00

48

1.00

47

0.99

46

0.99

45

0.99

44

0.99

43

0.98

42

0.98

41

0.98

40

0.98

39

0.97

38

0.97

37

0.97

36

0.97

35

0.96

34

0.96

33

0.96

32

0.96

31

0.95

30

0.95

29

0.95

28

0.95

27

0.95

26

0.94

25

0.94

24

0.94

23

0.94

22

0.93

21

0.93

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GIVEN under my Official Seal,

11 March, 2020.

PASCHAL DONOHOE,

Minister for Public Expenditure and Reform.

EXPLANATORY NOTE

(This note is not part of the Instrument and does not purport to be a legal interpretation)

These Regulations provide for the establishment of a facility to enable members of the Permanent Defence Force (PDF) who are Single Scheme members to purchase additional retirement benefits in the Single Scheme and to enable such members to transfer retirement benefits accrued in certain other Revenue approved Schemes and PRSAs into the Single Scheme. The Regulations prescribe the eligibility criteria for the facility and the method for determining the limit of additional benefits available to a PDF Scheme member, whether for actual purchase or for purchase by way of transfer. The costs associated with the facility are also detailed in the Regulations. A similar facility was established for other Single Scheme members by way of S.I. 252/2019.