PLEASE CONSIDER THE ENVIRONMENT BEFORE PRINTING THIS DOCUMENT
“PENSIONS-RELATED DEDUCTION (PRD)”
Explanatory Information Leaflet
Note: This information document has been prepared with care by the TCD Staff Office and the TCD
Treasurer’s Office. It represents the College’s interpretation of the “Pensions-Related Deduction
(PRD)” and it’s application as provided for under the Financial Emergency Measures in the Public
Interest Act, 2009 (“the Act”). It is issued errors and omissions excepted with no attaching liability.
The provisions of the Act, including any subsequent amendments, will take precedence in the event of
d bt
Original Date of Issue: 2 March 2009
Updated: 7 May 2009 *
(*to reflect provisions of 2009 Emergency Supplemental Budget)
Background Information
On 3 February 2009, the Taoiseach announced in the Dáil a series of proposed measures to
be taken as part of the Government’s implementation of the ”Framework on Stabilisation,
Social Solidarity and Economic Renewal”.
One of the key measures is the proposed reduction in the Public Service pay-bill by €1.4
billion euro – “the great bulk of which will be achieved through a new pension-related
payment to be made by all public servants”.
The Financial Emergency Measures in the Public Interest Act, 2009 (the “Act”) was
subsequently enacted by the President of Ireland on 27 February 2009.
The stated primary purpose of this Act is to introduce a number of financial emergency
measures in the public interest. In addition to a number of other measures, this Act requires
the making of a “Pensions-Related Deduction” (PRD) from specified Public Service employees
with effect from 1 March 2009.
The Act specifies that all Pension-Related Deductions are to be remitted by employers for the
exclusive and immediate benefit of the Exchequer. The Act also stipulates that a PensionRelated Deduction is not a pension contribution and, furthermore, confirms that the payment
of a Pensions-Related Deduction by an individual does not confer any additional entitlement
or benefit under a Public Sector Pension Scheme.
In accordance with the provisions of this Act, the Higher Education Authority has instructed
the University Sector, including the University of Dublin, that arrangements must be made to
make “Pensions-Related Deductions” from all relevant employees with effect from the first
weekly or monthly payroll on or after 1 March 2009.
To assist members of the College community a series of Frequently Asked Questions,
complemented by Worked Examples, are detailed overleaf to assist with general queries
that staff may have in relation to the “Pensions-Related Deduction” and the general
application of The Financial Emergency Measures in the Public Interest Act, 2009.
2
Frequently Asked Questions (FAQs)
1. What is the Public Service “Pensions-Related Deduction” (PRD) ?
The PRD is one of the financial emergency measures introduced in the public interest by the
Government under the Financial Emergency Measures in the Public Interest Act, 2009 (the
“Act”) that was signed into law by the President of Ireland on 27 February 2009.
2. Who does the PRD apply to ?
In outline terms, this deduction will apply to an individual who, on 1 March 2009 or at any
time afterwards, is employed by or holds a position or office in a Public Service Body and



Is a member of a Public Service Pension Scheme (TCD or elsewhere); OR
Is entitled to a benefit under a Public Service Pension Scheme (TCD or elsewhere); OR
Receives a payment in lieu of membership of a Public Service Pension Scheme (TCD or
elsewhere)
3. What is a “Public Service Body” for the purposes of the PRD ?
The Act defines a “Public Service Body” and stipulates any bodies or organisations exempted.
In the Education Sector, a “Public Sector Body” means:




The Department of Education and Science
A statutory body
Any body financed wholly or partly by the Minister for Education & Science and in
respect of which a Public Service Pension Scheme exists, applies or may be made
Any other body wholly or partly funded out of public monies and in respect of which a
Public Service Pension Scheme exists, applies or may be made
4. Will the PRD apply to employees of the University of Dublin, Trinity College ?
Yes. The Higher Education Authority has confirmed that the legislation will apply to the staff
of all Universities, as well as staff employed in bodies under the Department of Education and
Science (or another Government Department’s) aegis.
5. Is anybody employed by a Public Service Body exempt from the PRD?
Other than the President of Ireland and members of the Judiciary, the legislation does not
stipulate any exemptions.
Therefore, anyone employed by a Public Service Body would be prima facie subject to the
deduction unless they are not a member of (or not entitled to receive a benefit under) a
Public Service Pension Scheme and provided they do not receive a payment in lieu of same
(see Q.2. above).
3
6. What income will be subject to the PRD where it applies ?
All remuneration processed via College payroll will be subject to the PRD – regardless of
whether or not this income is deemed pensionable or non-pensionable. This includes, but is
not limited to, all overtime payments, “acting up” payments and allowances (pensionable or
non-pensionable) that are payable.
Note: Where an individual has entered into a salary sacrifice arrangement (e.g. Salary
deductions are made under the TaxSaver Commuter Ticket Scheme or, in due course, the
Government Cycle to Work Scheme), these salary sacrifice amounts will be deducted from the
gross income amount for each payroll period before the PRD is applied.
7. I work part-time. How will the PRD be applied ?
For a part-time employee, the PRD will be applied to an individual’s actual part-time
remuneration and not the full-time equivalent remuneration.
8. When does the PRD take effect ?
Under the legislation, the PRD must take affect from 1 March 2009. Payroll modifications
have been made to facilitate this deduction on both weekly and monthly College payrolls.
9. How will the PRD be calculated ?
The PRD is progressive and is based on a person’s gross remuneration.
Arising from the Government’s Emergency Supplementary Budget in April 2009, the Minister
for Finance announced amendments to the deduction rates with effect from 01 May 2009
onwards. These changes have been made to ameliorate the impact of deductions on lower
paid public servants, partly offset by an increase on higher earnings.
With effect from 1 May 2009, the Minister has confirmed that the new PRD annual deduction
rates are as follows:
Plus
Plus
On
On
On
On
first €15,000 of gross remuneration
next €5,000 of gross remuneration
next €20,000 of gross remuneration
any balance of gross remuneration
i.e.
i.e.
i.e.
i.e.
€0 - €15,000
€15,001 – 20,000
€20,001 – 60,000
€60,001+
=
=
=
=
0%
5%
10%
10.5%
Information on the initial annual PRD rates applying provided for under the Act prior to 1 May
2009 are detailed in Appendix A for reference purposes.
We recommend that you refer to the Worked Examples after this FAQ Section (CLICK HERE).
4
10. Will the PRD change in the future ?
Yes. The Act permits the Minister for Finance to amend the manner in which PRD is
calculated.
Update 07/05/2009: In the 2009 Emergency Supplementary Budget, the Minister for Finance
exercised his powers under legislation and amended the manner in which the PRD is
calculated with effect from 1 May 2009 onwards. The Minister advised that these changes
have been made to ameliorate the impact of deductions on lower paid public servants, partly
offset by an increase on higher earnings.
11. Does the rate of PRSI I pay affect the rate of the PRD that I will pay ?
No. The same rate of deduction applies to all individuals – regardless of whether or not an
individual pays Class A (full) or Class D (modified) PRSI.
12. Does the College Pension Scheme that I am a member of affect the rate of PRD
that I will pay ?
No. The same rate of deduction applies to all individuals – regardless of which College or
other Public Sector Pension Scheme an individual may be a member of.
13. I have a Medical Card – do I have to pay the PRD ?
Yes. Unlike the Income Tax Levy, the Act does not provide for any exemptions to be made
from the PRD should an individual hold a Medical Card.
14. Do I get tax relief on PRD amounts ?
Yes. The Act provides that the deduction will operate under what is known as the “net pay”
arrangement operated by employers for the Revenue Commissioners.
Under this
arrangement, pension contributions for PAYE employees are deducted from gross pay before
applying income tax, PRSI and the Health Levy. As a result, the amounts deducted in respect
of the PRD will be exempt for income tax, PRSI and the Health Levy purposes.
15. Will the PRD amounts paid reduce the amount that I will have to pay under the
Income Levy ?
No. The Income Levy applies to gross pay and includes any amounts deducted for pension
purposes. Consequently, there will be no reduction in the amount of the Income Levy
payable at present.
16. Are the normal pension contributions payable by employees (where applicable)
affected by the introduction of the PRD ?
No. The existing rate of pension contributions payable by members, where applicable, to the
College Pension Scheme are NOT being increased. The PRD is a separate deduction to these
contributions and is being remitted for the exclusive use and benefit of the Exchequer and are
not being remitted to any Pension Fund.
5
17. Does the PRD affect the overall threshold levels for tax relief on pension
contributions ?
No. The legislation stipulates that amounts deducted in respect of the PRD do not count
towards a person’s limit to receive tax relief on any employee pension contributions. For
example, a Pension Scheme member aged between 40 – 49 years could contribute up to 25%
of their gross income towards pension and receive tax relief on those contributions. Amounts
deducted in respect of PRD will not count towards that 25%.
18. Do I receive any additional pension benefits as a result of paying a PRD ?
No. The Act also stipulates that a Pension-Related Deduction is not a pension contribution
and, furthermore, confirms that the payment of a Pensions-Related Deduction by an
individual does not confer any additional entitlement or benefit under a Public Sector Pension
Scheme.
19. I am a member of one of the College Pension Schemes. Can I opt out ?
No. If your Contract of Employment specifies membership of a Pension Scheme as a
condition of your employment with the College, OR if you were subsequently invited and
opted to join a College Pension Scheme, you may not opt out of a College Pension Scheme.
The only limited circumstance that the Act provides for an individual to opt out of the Scheme
is on resignation, but only for employees with short service. Specifically, “an employee who
on 1 March 2009 has less than two years pensionable service with no entitlement to a
preserved pension benefit under a Public Service Scheme may give, at any time before 1 April
2009, one month’s written notice to terminate his or her contractual arrangement” as an
employee. i.e. resign from their post.
20. I am a temporary employee – am I exempt from the PRD ?
No. There is no distinction made between permanent and temporary employees. If you are a
temporary employee, regardless of the length of your contract, the PRD will apply if you are a
member of a Public Service Pension Scheme (TCD or elsewhere), OR you are entitled to
receive a benefit under a Public Service Pension Scheme (TCD or elsewhere) OR you receive a
payment in lieu of membership of a Public Service Pension Scheme (TCD or elsewhere)
21. I am a Research funded employee – am I exempt from the PRD ?
No. There is no distinction made between College-funded (i.e. cista communis) and non
College-funded (non-cista communis) posts. The PRD will apply if you are a member of a
Public Service Pension Scheme (TCD or elsewhere), OR you are entitled to receive a benefit
under a Public Service Pension Scheme (TCD or elsewhere) OR you receive a payment in lieu
of membership of a Public Service Pension Scheme (TCD or elsewhere)
6
22. I am from overseas and will only work in TCD for a couple of months – am I
exempt from the PRD ?
No. The PRD will apply if you are a member of a Public Service Pension Scheme (TCD or
elsewhere), OR you are entitled to receive a benefit under an Irish Public Service Pension
Scheme (TCD or elsewhere) OR you receive a payment in lieu of membership of a Public
Service Pension Scheme (TCD or elsewhere)
23. I am a pensioner and receive a pension from a Public Service Pension Scheme.
Occasionally, I work part-time in the College. Is all of my income (pension and
additional College pay) subject to the PRD?
No. Where a pensioner returns to work periodically in the College, any pay in respect of that
work is subject to the PRD. However, the pension is not.
24. I only work periodically for TCD and I am always paid on the casual payroll. I
am not in a TCD Pension Scheme. Will I be exempt from the PRD ?
In accordance with the Act, the College is obliged to apply the PRD to all individuals unless
there are justifiable reasons for not doing so. i.e. You are not a member of a Public Service
Pension Scheme (TCD or elsewhere), OR you are not entitled to receive a benefit under an
Irish Public Service Pension Scheme (TCD or elsewhere) OR you do not receive a payment in
lieu of membership of a Public Service Pension Scheme (TCD or elsewhere).
The Treasurer’s Office will shortly be engaging with all School Administrators in relation to
individuals on the College’s casual payroll. As part of a once-off exercise, each individual on
the casual payroll will be required to complete a PRD Employee Declaration Form declaring
whether or not they meet the criteria for the Pensions Related Deduction to be applied. This
form will be made available on the Treasurer’s Office website (CLICK HERE). The onus will be
on each individual to submit a new PRD Employee Declaration Form to the Treasurer’s Office
in the event that their circumstances change that would result in the Pensions Related
Deduction being/not being applied. Please note that in the absence of a completed PRD
Employee Declaration Form, the PRD will be applied to all casual payments.
P.T.O.
7
25. On resignation, will I be able to reclaim any PRD amounts paid through payroll ?
Only in limited circumstances. If you are resigning with less than 2 years pensionable service
and you do NOT have an entitlement to a preserved benefit under a Public Service Pension
Scheme and provided your pensionable service is not transferrable to another Irish Public
Service Pension Scheme, you may complete a PRD Application Form to claim a refund of any
PRD amounts paid separately to and in addition to any employee pension contributions. It is
unclear at this juncture whether or not tax will be levied on any PRD Rebate.
If you have more than 2 years pensionable service OR if you are eligible to transfer your
service to another Irish Public Service Pension Scheme, you will not be able to apply for a
PRD rebate or a refund of any employee pension contributions payable.
You should note that if you are issued with a PRD Rebate and you subsequently wish to have
the service credited (in respect of which that rebate applied) for superannuation purposes
under a Public Service Pension Scheme at a later date, you will be required to pay back the
original rebate amount refunded to you plus compound interest at rates advised by the
Minister for Finance. These amounts being in addition to any repayment (plus compound
interest due) on refunded employee pension contributions.
Please Note:
This Information Leaflet was made available initially to assist members to understand that
application of the statutory Pensions Related Deduction.
For further information and future updates on the application of the Pensions Related
Deduction, please refer to the Department of Finance website www.finance.gov.ie
PLEASE CONSIDER THE ENVIRONMENT BEFORE PRINTING THIS DOCUMENT
8
WORKED EXAMPLES – CURRENT WEEKLY PAID EMPLOYEE
Note: The annual thresholds for the
PRD have been divided by 44 weeks
for 2009 (Mar – Dec). In 2010, 52
weeks will be used.
Weekly PRD Threshold
First €340.91 @ 0%
Next €113.64 @ 5%
Next €909.09 @ 10%
All Other Pay @ 10.5%
Example 1
Basic Pay
+ Overtime
- Overtime (pre 1 March 09)
[Not liable for PRD]
Total Gross Pay for PRD
€299.42
€ 65.00
€ 75.00
Pensions Related Deduction
calculated as follows:
€364.42
First €340.91 @ 0%
Remaining €23.51 @ 5%
TOTAL PRD DUE
€ 0.00
€ 1.18
€1.18
Example 2
Basic Pay
+ Overtime
- Travel Pass Deduction
[Exempt from PRD]
Total Gross Pay for PRD
€500.00
€150.00
€ 75.00
Pensions Related Deduction
calculated as follows:
€575.00
First €340.91 @ 0%
Next €113.64 @ 5%
Remaining €120.45 @ 10%
TOTAL PRD DUE
9
€0.00
€ 5.68
€12.05
€17.73
WORKED EXAMPLES – CURRENT MONTHLY PAID EMPLOYEE
Note: The annual thresholds for the
PRD have been divided by 10 months
for 2009 (Mar – Dec). In 2010, 12
months will be used.
Monthly PRD Threshold
First €1,500.00 @ 0%
Next €500.00 @ 5%
Next €4,000 @ 10%
All Other Pay @ 10.5%
Example 1
Basic Monthly Allowance
+ Allowance
- Salary Arrears (pre 1 March 09)
[Not liable for PRD]
Total Gross Pay for PRD
€5,500.00
€ 300.00
€ 450.00
Pensions Related Deduction
calculated as follows:
€5,800.00
First €1,500 @ 0%
Next €500 @ 5%
Remaining €3,800 @ 10%
TOTAL PRD DUE
€0.00
€25.00
€380.00
€405.00
Example 2
Basic Salary
+ Overtime
- Travel Pass Deduction
[Exempt from PRD]
Total Gross Pay for PRD
€3,000.00
€300.00
€ 180.00
Pensions Related Deduction
calculated as follows:
€3,120.00
First €1,500 @ 0%
Next €500 @ 5%
Remaining €1,120 @ 10%
TOTAL PRD DUE
10
€0.00
€25.00
€112.00
€137.00
APPENDIX A
Historical Reference Information
Pension-Related Deduction rates applying 1 March 2009 to 30 April 2009
(prior to amendments announced in 2009 Emergency Supplementary Budget)
Prior to 1 May 2009 when the Minister exercised his powers to amend the PRD rates, the
following PRD rates applied for March and April 2009:
Plus
Plus
On first €15,000 of gross remuneration
On next €5,000 of gross remuneration
On any balance of gross remuneration
i.e. €0 - €15,000
=
i.e. €15,001 – 20,000 =
i.e. €20,001+
=
3%
6%
10%
Worked Examples of the rates applying for March and April 2009 are detailed overleaf for the
Weekly and Monthly Payrolls (for reference purposes)
PLEASE CONSIDER THE ENVIRONMENT BEFORE PRINTING THIS DOCUMENT
11
Historical Reference Information
WORKED EXAMPLES – WEEKLY PAID EMPLOYEE
Pension-Related Deduction rates applying 1 March 2009 to 30 April 2009
(prior to amendments announced in 2009 Emergency Supplementary Budget)
Note: The annual thresholds for the
PRD have been divided by 44 weeks
for 2009 (Mar – Dec). In 2010, 52
weeks will be used.
Weekly PRD Threshold
First €340.91 @ 3%
Next €113.64 @ 6%
All Other Pay @ 10%
Example 1
Basic Pay
+ Overtime
- Overtime (pre 1 March 09)
[Not liable for PRD]
Total Gross Pay for PRD
€299.42
€ 65.00
€ 75.00
Pensions Related Deduction
calculated as follows:
€364.42
First €340.91 @ 3%
Remaining €23.51 @ 6%
TOTAL PRD DUE
€10.23
€ 1.41
€11.64
Example 2
Basic Pay
+ Overtime
- Travel Pass Deduction
[Exempt from PRD]
Total Gross Pay for PRD
€500.00
€150.00
€ 75.00
Pensions Related Deduction
calculated as follows:
€575.00
First €340.91 @ 3%
Next €113.64 @ 6%
Remaining €120.45 @ 10%
TOTAL PRD DUE
12
€10.23
€ 6.82
€12.05
€29.10
Historical Reference Information
WORKED EXAMPLES – MONTHLY PAID EMPLOYEE
Pension-Related Deduction rates applying 1 March 2009 to 30 April 2009
(prior to amendments announced in 2009 Emergency Supplementary Budget)
Note: The annual thresholds for the
PRD have been divided by 10 months
for 2009 (Mar – Dec). In 2010, 12
months will be used.
Monthly PRD Threshold
First €1,500.00 @ 3%
Next €500.00 @ 6%
All Other Pay @ 10%
Example 1
Basic Salary
+ Allowance
- Salary Arrears (pre 1 March 09)
[Not liable for PRD]
Total Gross Pay for PRD
€5,500.00
€ 300.00
€ 450.00
Pensions Related Deduction
calculated as follows:
€5,800.00
First €1,500 @ 3%
Next €500 @ 6%
Remaining €3,800 @ 10%
TOTAL PRD DUE
€45.00
€30.00
€380.00
€455.00
Example 2
Basic Salary
+ Overtime
- Travel Pass Deduction
[Exempt from PRD]
Total Gross Pay for PRD
€3,000.00
€300.00
€ 180.00
Pensions Related Deduction
calculated as follows:
€3,120.00
First €1,500 @ 3%
Next €500 @ 6%
Remaining €1,120 @ 10%
TOTAL PRD DUE
13
€45.00
€30.00
€112.00
€187.00