Vol. 468 No. 1
15 Mr. M. Smith asked the Minister for Defence if he will bring forward proposals to enable all members of the Defence Forces who are eligible to retire under the voluntary early retirement scheme to do so within a reasonable time; if he will publish the criteria for determining eligibility for the scheme to remove the inconsistencies contained therein; and if he will make a statement on the matter. [14638/96]
30 Mr. Power asked the Minister for Defence his views on whether it would be in the best interest of the Defence Forces to offer voluntary early retirement to 2,300 personnel in 1996, rather than over a three year period. [14433/96]
I propose to take Questions Nos. 15 and 30 together.
The voluntary early retirement (VER) scheme for the Permanent Defence Force was launched on 22 April 1996 and the closing date for applications was 7 June last. A total of 1,119 personnel made application under the terms of the scheme. A number of offers of early retirement have already been made and offers will continue to be made over the coming weeks.
In addition to their existing superannuation entitlements of pension and gratuity after 12 years service in the case of officers and 21 years service in the case of enlisted personnel, the VER package provides a once-off, tax-free lump sum payment of four weeks pay for each year of potential service up to the age of 60, subject to a cap of 18 months pay. Personnel who have gratuity entitlements only will receive tax-free lump sums of five weeks pay for each year of actual service subject to a cap of 24 months pay.
Some £13 million net was provided in this year's budget to fund the first phase of the scheme. This is the estimated cost to provide for the release of approximately 450 personnel. It would not be possible to fund the release of the total number in the first year. The purpose of the scheme is to allow for the release of up to 2,300 PDF personnel. It is expected that this target will be achieved over a three year period.
Aside from the budgetary considerations neither would it be desirable or practical from an organisational point of view to allow the release of the total number in the first year. The aim is to move to an organisation with a total strength of 11,500. There must be a gradual transition to the new organisation. This will be achieved through a carefully planned combination of early retirement, under the scheme, and recruitment.
A board was established to evaluate all applications for VER. The board is considering these by reference to carefully laid down criteria. The categories to which the scheme applied were as follows: personnel aged 50 and over by 31 December 1996; medical category C personnel; Naval personnel who suffer from chronic sea sickness; and members of the 46th to 53rd cadet classes and 3rd potential officers course.
This scheme is completely voluntary. Eligible personnel are free to apply for it at their own discretion. Similarly there is no onus on the Defence Forces to offer early retirement to anyone whose retirement is not in the best interests of the organisation.
I want to make it clear at the outset that I am not suggesting that the Minister should make all these voluntary early retirement offers in the first year. The voluntary early retirement scheme is in a shambles. I suggest to the Minister — I want to take budgetary considerations into account — that it is possible to avoid having significant numbers of disgrunted officers and enlisted personnel who are eligible for the scheme. He is devising criteria under which they can be prevented from retiring at present. He should consider seriously a method by which more can enter the voluntary early retirement scheme with whatever phased payments can be worked out with the Department of Finance. That is not an unreasonable request, and it will favour the Minister in having the benefits and gains available to the forces in future years. Will the Minister consider ways and means, which I know are at his disposal, to grant where possible some of the requests for early retirement within a much shorter time than the designated time span?
With respect Deputy Smith there is some misunderstanding. It was clear from the first day that the voluntary early retirement scheme would be phased in over a four year period. Everyone knew that. I do not accept that the scheme is a shambles. The reality is that more people applied than was anticipated by anybody. As I said 1,119 persons applied and there is a great deal of work involved in getting agreement with the associations, categorising people who are entitled in the first year to apply and making the offers. That is proceeding in an organised fashion.
Any voluntary scheme which is phased in over a three year period will have initial teething problems but we must remember that others will be entitled to apply next year, given the categories I have outlined to the Deputy.
I would not like a message to go from this House that the voluntary early retirement scheme is a shambles. It is not. My Department regularly meets the representative associations to get agreement as to the numbers who should be entitled to go from the category of NCO privates and the numbers from the category of officers. We have come to an arrangement where we have allocated numbers proportionately, which is the wise thing to do. After that you must decide within the four categories I have outlined the numbers in each category to be dealt with this year. There is no easy solution, particularly in the first year. I am quite satisfied that over a three year period we will be able to satisfy within the number of 2,300 all those who wish to take up the offer.
We have substantially exceeded our time.
The Minister stated he will be able to accommodate only 450 applications in the first year but up to 1,100 persons have applied and the total allocation over a three year period is 2,300. No one anticipated that the numbers who applied at this stage would be so high and this has changed the agenda, causing disgruntlement. The criteria and inconsistencies will cause further disgruntlement. The Minister should look at ways and means of sharpening the focus so that greater numbers may retire, avoiding the disgruntlement and disillusionment.
Through the structures within the Department we will be having ongoing discussions with the representative associations and where it is possible to oblige people particularly those who have the offer of employment outside, we will be delighted to try to come to an arrangement with them. When dealing with the voluntary scheme one will not be able to satisfy everybody but if proposals and suggestions come to the representative associations as to how to deal with this in a better way, I would be delighted to listen to them. I share the Deputy's concern but we do not want to make people disgruntled but where there are budgetary constraints we can deal only with x numbers of people in the first year, in the second and third greater numbers will be facilitated.
If the Deputy or representative associations have suggestions as to how that could be improved, I will be pleased to listen to them.
