Written Answers. - State Pensions.
Rory O'Hanlon
Question:
97
Dr. O'Hanlon
asked the
Minister for Finance
the estimated percentage increase in public spending on State pensions between 1980 and the year 2030; the plans, if any, he has to provide for this increase; and if he will make a statement on the matter.
[2064/97]
In my reply I will deal with public spending in relation to the occupational pensions of State employees, rather than social welfare pensions, which is primarily the responsibility of the Minister for Social Welfare.
Figures are not readily available to provide the information in the precise format sought by the Deputy. In 1986 the operations research section of my Department carried out, with actuarial advice, an examination of the emerging cost of public service pensions. This examination showed that in real terms the gross annual cost of pensions in four major areas of the public service, Civil Service, Garda Síochána, teachers, and the Defence Forces, was £164.1 million in 1985 and would increase by 95 per cent over the following 30 years.
A more recent estimate and projection of public service pension costs was done in 1995. This indicated that, in constant salary terms, expenditure on all public service occupational pension schemes (comprising the four groups included in the earlier study, and including the local authorities, other employees in the education sector, the health service, and non-commercial semi-State bodies) would increase from £540 million per annum in 1995 to £1.4 billion per annum in 2030, an increase of 160 per cent.
As regards providing for this increase, I should say that public service pensions are financed on a pay-as-you-go basis, with the cost being met on an ongoing basis from general taxation as part of the public service pay bill. However, the Deputy will be aware that the Government established a Commission on Public Service Pensions in 1996 to examine and report on the occupational pension arrangements of public servants. The question of the method of financing the long-term costs of pension schemes is to be considered by the Commission, whose report is to be submitted to Government in 1998.
