Page 15 - Group Insurance and Retirement Benefit IC 83 E- Book

Pensionable service

This will be defined in the rules of the scheme. It may be service as an employee, or
service as a member of the scheme. It may be expressed in complete years, years and

months or even years and days. It may be continuous, or could include periods of broken
service. Service with other companies in a group may also be included.

Pensionable Salary
This is the part of your salary which is taken into account for pension purposes. It could

be your gross annual pay but is usually something lower than that. The usual starting

point for calculating this is basic salary. If the scheme is ―integrated‖ with social welfare
benefits (see below), it may be subject to a deduction. Anything included in pensionable

pay must be taxable under Schedule E of the tax code and the Revenue Commissioners

require that anything which is not a fixed part of pay (such as bonuses, commissions, etc.)
must be averaged over 3 or more years, or any shorter period for which it has actually

been paid. What is included in pensionable salary in your case will depend upon the rules
of your own scheme.

Final Pensionable Salary
This will be based on your pensionable salary (see above). It may be that salary taken at

the date of your retirement or at some date close to that, or it could be an average over

several years.
How the Social Welfare Pension can influence your Occupational Pension

It is common in Irish pension schemes that the benefits provided under the occupational
pension scheme are ―integrated‖ with the benefits paid under the Social Welfare system.

In the public sector, this is known as ―co-ordination‖. This can be done in a number of
different ways. Sometimes it is done simply by subtracting all or part of the amount of

the individual‘s Social Welfare retirement pension from the pension calculated on the

scale or the formula contained in the rules of the scheme. Most commonly, however, it is
done by means of a salary ―offset‖. This works by reducing the salary for pension

purposes by an amount which is related to the Social Welfare pension currently payable.
Members‘ benefits and contributions would then be based on this lower pensionable

salary. The thinking behind this is that the Social Welfare pension is regarded as catering