asked the Minister for the Public Service if any consideration has been given to the statutory reduction in the retirement age as a means of creating employment.
12.
Ceisteanna—Questions. Oral Answers. - Reduction in Retirement Age.
11.
Mr. Ahern
asked the Minister for the Public Service if any consideration is being given to making conditions for early retirement more attractive throughout the public service with the object of creating more vacancies for young people attempting to join the public service.
I propose to reply to Questions Nos. 11 and 12 together.
In the course of examining job creation measures, generally, consideration was given to the question of reducing retirement ages in the public service. The extra costs of immediate pensions plus lump sums which would arise — even without any extra retirement incentives — were such as to make the matter prohibitive.
With regard to making conditions for early retirement more attractive, incentives to encourage such retirement on a voluntary basis at age 60 have been introduced in the Civil Service in recent years — for example, the qualifying service for maximum lump sum has been reduced from 45 to 40 years. Furthermore, persons who resign before the minimum retiring age can, provided they have at least five years' service, have their accrued entitlement to pension and lump sum preserved and paid on an uprated basis at age 60. I am, however, reviewing retirement ages in the context of the forthcoming White Paper on the Public Service.
Does the Minister think that there would be many employment opportunities in the public service if people retired early? Could he also say how many people have taken up the option of early retirement?
The answer to the first question is yes but, if it were to be implemented as an employment creation measure, it would be one of the more costly options which have been examined. A relatively small number of people retired before they reached 65 years of age. In 1983, 157 people in the category 60 to 64 retired and it is estimated that about 150 out of a total of 1,220 in that age category of serving civil servants will retire voluntarily during this year.
That is a fairly small percentage. The Minister said it would be a costly scheme to implement if it was orientated towards employment, has he the figures regarding the cost of early retirement?
If the retirement age in the public service generally was to be reduced from 65 to 60 years, the estimated cost of doing so in one fell swoop would be £97 million by way of superannuation lump sum, together with additional pension costs of £33 million. That is in the context of a public service superannuation, lump sum and pension bill this year of £157 million.
Will the Minister say if there is any other method that would not be as costly for the State? As I understand it, there are many civil servants who would like to go on early retirement if the conditions were right. Is the Minister saying it is financially impossible to have a pension scheme that would allow these people to get an amount at 62 or 63 years fairly relative to their pension at 65 years?
Various options have been examined and all of them have major cost implications. If they were to be used purely as an employment generating scheme for people coming into the workforce for the first time it would be a very expensive method of employment generation. However, there are other aspects, including that of the age of retirement generally. There is much to be said for having a flexible retirement age generally and that is one question which we hope may be addressed in the proposed White Paper. Of course the Deputy is now leading me down a path that I tried earlier not to tread upon.
We will nearly have a White Paper at the end of the day.
I am calling Question No. 13.