Personal benefits build up gradually as separate "referable amounts" money tallies over the course of a member's career, based on the annual application of specified accrual percentages. Accrued and up-rated referable amounts over a complete career are added together to produce the pension and lump sum values on retirement.
For most members these accrual percentages and other details are as follows.
Pension: Accrual rate of 0.58% of pensionable remuneration up to a ceiling of 3.74 X State Pension Contributory (SPC) (currently €45,000, i.e. SPC of €12,017 x 3.74) PLUS (where applicable) 1.25% of pensionable remuneration above that level.
Lump sum: Accrual rate of 3.75% of pensionable remuneration.
Example of calculation
In Year 1 a new recruit earns €28,000. This yields a referable amount (a sum-towards-pension) of €162.40 using a 0.58% accrual rate (which applies up to €45,000 salary, above which an accrual rate of 1.25% applies).
Thereafter that €162.40 is indexed to the CPI (All Items).
Assuming 2% inflation annually and 40 years to pension age, the €162.40 will grow to about €359 at retirement.
Amounts towards pension are likewise calculated for all subsequent years of service. These referable amounts accrue, accumulate and are up-rated throughout the member’s career in the public service.
The total of these up-rated annual amounts at pension age constitutes the pension paid in retirement; the lump sum paid on retirement is built up in a similar way based on a 3.75% accrual rate.
Please note: Referable amounts are adjusted annually by reference to increases in CPI (Consumer Price Index) and aggregated referable amounts continue to be up-rated until retirement. If CPI falls, the pension is not reduced.