Dáil Éireann debate -
Wednesday, 19 Nov 1997

Vol. 483 No. 1

Written Answers. - Public Service Pensions.

Breeda Moynihan-Cronin

Question:

53 Mrs. B. Moynihan-Cronin asked the Minister for Finance if he will give details of the precise level of pension payment as a percentage of comparable salary in the relevant grade at which the pensioner retired for each category of public service employment, including teachers, nurses, gardaí, civil servants and others, which will prevail for pensioners as a result of the recent announcement he made on this issue; the date upon which his decision will take effect; the amount of additional money this measure will cost in 1997; the full year cost after 1997 in this regard; and if he will make a statement on the matter. [19699/97]

Minister for Finance (Mr. McCreevy)

Agreements under the local bargaining provisions of the Programme for Competitiveness and Work in respect of the groups mentioned by the Deputy tended to be very complex and to differ widely in their structure. Among the elements which were included in different agreements were salary increases, which varied depending on an individual's length of service and in some cases were confined to serving staff and did not apply to new recruits, selective up-gradings and promotions for a limited proportion of a grade, and non-pay items such as enhanced early retirement provisions and the reckonability in future of certain payments for pension purposes. As a result of the complexity of the settlements, it would not be possible to express, in a meaningful way, the value of the settlements in terms of the percentage payments being made to serving staff.

I assume, however, that the Deputy's main concern relates to the impact on pensioners of the decision which I announced on 4 November 1997. As I explained at the time, the effect of the Government's decision is that public servants who retired before the commencement dates of restructuring deals under the PCW will benefit from those deals on a parity basis subject to a minimum increase of 3 per cent (or 2 per cent in the case of any pensioners who have already received an advance payment of 1 per cent).

Accordingly, pensioners will in general get the same percentage increase as applied to the salaries of staff serving in the grade and on the scale point from which the pensioners retired. Traditional parity meant that pensioners could not benefit from some of the elements included in a number of deals (such as new allowances, personal long-service increments and higher scales which applied to limited numbers of staff). However, in order to protect those retired public servants who would have received less than 3 per cent had parity been applied in the normal way, the Government decided, as a once-off measure, that pensioners should be guaranteed a minimum increase of 3 per cent (or 2 per cent in the case of any pensioners who have already received an advance payment of 1 per cent). The decision on pension increases reflected the position put forward by the Public Services Committee of the Irish Congress of Trade Unions and has, I understand, been welcomed by them.

Where parity applies, the increases will be effective from the dates set out in the deals negotiated for serving staff, including phasing, where appropriate. The 3 per cent floor increase will take effect from 1 September 1995. In the case of a pensioner who did benefit from an advance payment of 1 per cent with effect from 1 April 1994, the 2 per cent floor will apply with effect from 1 May 1996.

As regards the cost of these increases, the Deputy will appreciate that my direct responsibility relates to Civil Service pensions only. An accurate estimate of the cost involved will only be available when the relevant Departments and organisations involved have implemented the increases. I can, however, say that when the decision was announced on 4 November, the best estimate of the cost was £23 million in 1997 and about the same in a full year.