Just how are ministers' pensions worked out?
A TD who has also served at least two years as a minister receives a pension based on service as a TD plus a separate pension based on service as a minister, which are calculated on different criteria. The two sums are then added
1 Working out a TD’s pension entitlement.
To work out a TD’s basic pension you divide his or her salary by 40 and then multiply it by the number of years they’ve served in the Dáil. A cap of 20 years service applies.
If we take a TD with 20 years’ service, whose salary is €92,672, then to calculate that TD’s pension entitlement, we divide the salary by 40 and multiply it by 20, which means the TD is entitled to a €46,336 a year pension once they reach retirement age. TDs are also entitled to a one-off pension lump sum of three times their pension. So, in this example, the TD would receive three times €46,336 – a lump sum of €139,008
On top of this, TDs who have served more than six months in the Oireachtas are also entitled to a termination lump sum equal to two months’ salary (€15,445).
If TDs have served for longer than three years they are also entitled to up to 12 monthly payments based on their length of service (for a TD the maximum payment total over 12 months is €57,920). Only after these payments end do they receive their pension proper.
2 Working out the pension of a minister.
A number of positions attract a pension entitlement over and above that earned by a TD or senator. These positions are taoiseach, tánaiste, minister, attorney general and ceann comhairle (called “ministerial” offices for pension purposes) and minister of state, leas cheann comhairle, cathaoirleach, leas-chathaoirleach and leader of the Seanad (called “secretarial” posts for pension purposes).
To receive this pension entitlement you have to have served for at least two years in one of these offices. The pension is then worked out as a percentage of the office holder’s salary. After two years a retiring minister is entitled to a pension equal to 20 per cent of his or her salary. After three years this becomes 25 per cent, four years 30 per cent, and five years 35 per cent.
The maximum entitlement is 60 per cent after 10 years’ service. Service as a minister of state is reckonable for ministerial pension calculations, with half the service accrued being counted for pension purposes.
If you are entitled to receive a “ministerial” pension but previously served in a “secretarial” post then half the time you spent in the latter post is reckonable at the “ministerial” rate.
So a minister with the standard salary of €76,603 (this excludes the €92,672 they earn as a TD) and a maximum 10 years’ “ministerial” service would be entitled to 60 per cent of €76,603, making for a “ministerial” pension of €45,962.
3 Working out an office-holder’s long-term pension projection (ie how much the annuities would cost in the private sector).