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3.6 Final Remuneration
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Calculation of pension rests on the definition of final remuneration,
which may range from basic salary only up to full PAYE earnings.
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The Revenue will accept the following definitions:-
- Basic pay in one of the last five years before retirement date,
plus the average of three or more consecutive years' fluctuating
emoluments such as bonus or commission payments.
- The average of total earnings in three or more consecutive years
in the ten years prior to retirement date.
NB
- Taxable benefits in kind may be used in calculating final
remuneration.
- If the definition is anything other than the last twelve months'
earnings before retirement, then earnings during the definition
period may be increased in line with a suitable inflation index
to produce a higher national salary figure for calculating pension.
This is termed 'dynamisation'.
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The definition used takes no account of whether the pension in
payment will be flat rate, increasing at a fixed rate or, like Public
Sector schemes, linked to increases in the cost of living
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