Public service employees who are fully insured (primarily those who pay Class A PRSI) under the social insurance system operated by the Department of Social Protection may be entitled to a range of social insurance related payments from that department by virtue of their PRSI contributions. One such payment is the State Pension (Contributory) (SPC), which is payable to eligible persons on reaching age 66.
Many occupational pension schemes, including pre-existing public service pension schemes, take account of these social insurance entitlements when providing a pension under the occupational pension scheme. This is known as ‘integration’, and is sometimes referred to as ‘co-ordination’.
In pre-existing public service pension schemes, integration takes account of certain social insurance benefits (Relevant Benefits) that may be payable to an employee under the social insurance system to calculate:
- the amount of occupational pension payable from their pension scheme, so that the combined pension from both sources (occupational pension and Relevant Benefit) is at the intended level under the scheme's design; and
- the level of contributions payable by the employee towards the cost of their occupational pension, so that these contributions reflect the offset of the SPC against their scheme benefits.
The calculation of pension benefits under an integrated public service pension scheme assumes that the public servant concerned is entitled to social insurance benefits by virtue of their PRSI classification, and is eligible for the maximum rate of those benefits. In the case of members of an integrated pre-existing public service pension scheme who retire and who do not qualify for the SPC, or qualify for a Relevant Benefit (including the SPC) at a rate that is lower than the maximum rate of SPC payable at State Pension Age (currently age 66), they may be entitled to an Occupational Supplementary Pension (‘OSP’), subject to certain conditions being met.
In general, in cases where an individual does not qualify for a Relevant Benefit on retirement, or on discharge from the PDF, or where the individual qualifies for a Relevant Benefit at less than the full rate of SPC, pre-existing public service pension schemes make provision for an award of an Occupational Supplementary Pension (OSP), subject to meeting certain eligibility criteria.
This ensures that a fully insured member of the scheme receives an overall pension package (including occupational pension, Relevant Benefits, and OSP) equivalent to the pension which would have been payable if their occupational pension had not been integrated.
Where payable, the rate of OSP under a pre-existing public service pension scheme is calculated as the difference between:
- the member’s actual occupational pension payable, plus the personal rate of any Relevant Benefits payable, and
- the occupational pension that would have been payable to the member if integration had not applied.
An OSP is not intended to bridge the shortfall in pension up to the maximum rate of SPC. Instead, it will give eligible members pension benefits equivalent to those they would have received if integration had not applied to their occupational pension.
Circular 12/2024 – ‘Arrangements for Occupational Supplementary Pensions (OSP)’ sets out the process and administrative arrangements that apply in respect of Occupational Supplementary Pensions under pre-existing civil and public service pension schemes.
Payment of the OSP is not automatic and is subject to an individual meeting the eligibility criteria as set out in Circular 12/2024. The main eligibility criteria which must be met in order to qualify for payment of an OSP are:
(i) The individual must be retired and have reached Minimum Pension Age, or retired on grounds of ill-health,
(ii) The individual must have been a member of a pre-existing public service pension scheme, the pension benefits payable in respect of such membership must have been integrated with the social insurance system, and the pension scheme rules must provide for payment of an OSP,
(iii) The individual must not be engaged in full-time paid employment, and the individual must not be self-employed,
(iv) The individual must be in receipt of an overall pension package (occupational pension and Relevant Benefits, where appropriate) that is less than the occupational pension which would have been payable, had it not been integrated,
(v) The individual must meet the criteria set out in section 4 & 5 of Circular 12/2024 with regard to claiming/qualification for Relevant Benefits.
An OSP is not payable to the following public servants:
a) Persons recruited before 6 April 1995 paying a modified rate of PRSI (Class B, C or D) and whose pension benefits were not integrated with the social insurance system,
b) Members of the Single Scheme.
Any public servant wishing to enquire about their eligibility for an OSP should contact their pension administrator. Any public servant wishing to apply for an OSP should request an application/declaration form from their pension administrator, and return the completed form to that pension administrator.
Application forms should not be sent to the Department of Public Expenditure, NDP Delivery and Reform.
Template application and declaration forms, as well as process flowcharts, are available for use by civil and public service bodies under Supporting Information below. When using these templates, departments/bodies should ensure to amend/adapt these as required, for example, including the relevant departmental logo and the contact details for that Department.
- Circular 12/2024 – Arrangements for Occupational Supplementary Pensions (OSP)
- Declaration Form for those under State Pension age
- Declaration Form for those on or after State Pension Age
- Flowcharts for Applying for OSP
