Bernard Allen
Question:14 Mr. Allen asked the Minister for Finance when he will restore parity of pensions, which was removed under the PCW, to public service pensioners. [11289/99]
Other Questions. - Pensions Parity Policy.
Dan Neville
Question:45 Mr. Neville asked the Minister for Finance when he will restore parity of pensions to all retired public employees. [10927/99]
I propose to take Questions Nos. 14 and 45 together.
The question of restoring pensions parity does not arise since it has not been removed.
The position is that in June 1997, in An Action Programme for the Millennium, the Government undertook to protect public service pensions. In November 1997 the Government announced that the benefit of the restructuring pay deals under the Programme for Competitiveness and Work would apply on the basis of parity to public servants who had retired before the commencement dates. However, 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 one-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 Government also announced that, because those restructuring pay deals posed major difficulties in applying parity, it was referring the matter to the Commission on Public Service Pensions.
Following the Government decision in November 1997, my Department issued comprehensive guidelines for dealing with cases. Initially, there were difficulties in interpreting how these guidelines applied to certain groups of pensioners, particularly in the local authority and health board areas. These issues were subsequently resolved and my Department, along with other Departments, made every effort to ensure that public sector bodies implemented fully the terms of the Government decision.
The issues now being pursued by certain pensioner groups dispute aspects of settled pensions parity policy. For example, they want long service increments paid to certain serving staff on a personal basis under their PCW restructuring pay deals to be passed on to retired personnel. My Department has made it clear from the beginning that it is a core element of pensions parity policy that such payments are not passed on to pensioners because they are not a permanent feature of the pay scale. This was one of the key criteria set out in the guidelines issued to Departments.
As indicated, Government policy on PCW restructuring deals has been determined primarily on the basis of adhering as closely as possible to parity as traditionally applied, but with certain adjustments to protect the position of those groups of pensioners who would otherwise lose out because of the nature and complexity of the pay deals.
Is the Pensions Board still discussing aspects of parity which were referred to it by the Department of Finance?
The McAleese commission was set up in 1996. It gave me its interim report in early 1998. It had hoped to submit its final report before the end of 1998 but, due to the complexity of its work, it will not be due until later this year. The McAleese commission on public service pensions addresses a wide range of issues, as the Deputy is aware because he was in Government when it was set up it. This is one of the matters it will address.
As I understand it, the continuing difficulty with parity relates to long service increments, as the Minister said, and special allowances. How many pensioners are affected by the failure to apply parity in these areas? What is the likely cost to the Exchequer of applying parity in the way the pensioners are asking? Does the Minister not agree that the people primarily affected are former clerical officers in the local authorities and their equivalent in the health boards, who are hardly well paid workers even now, and that the amount of money involved is very small?
I do not have the details on the numbers involved. However, the cost issue is not the primary consideration – it is the principle involved. It is a serious principle regarding pensions policy that has been settled since the year dot. It was not brought in by this or the previous Minister for Finance but has always been there. A core element of pensions parity policy is that only permanent changes or additions to pay scales are passed on to pensioners. That was the situation long before my time. When I brought in this deal in November 1997 many pension groups expected me to not do it. I commend the public sector—
The Minister almost did not do it.
I sent people off on a dummy run. One group issued a statement saying that I had done what some people anticipated I would do. The floor I brought in was welcomed by the public service committee of ICTU which had recommended that provision. The matter was under consideration for some time by the previous Government. I am not saying the previous Government funked the issue as it is a very complex area. We found an acceptable formula, which I announced in November 1997. I do not mind pensioners' groups lobbying as it is part of the process, but some of them are trying to overturn pensions parity policy which has been settled since the foundation of the State. I cannot relent on that issue.
The whole point of the decision in November 1997 was to overturn established policy.
The reason it was so difficult in November 1997 and for the previous Government was the PCW restructuring deals. That is what brought this on to a different level—
The Minister established a principle in 1997, so why not go the whole hog?
We must move on to Question No. 15.