Richard Bruton
Question:108 Mr. R. Bruton asked the Minister for Finance if he will make a concession in respect of pension rights in response to a case set out to him by a person (details supplied) in County Dublin. [4344/01]
Written Answers. - Pension Rights.
The position is that the person in question resigned from the Civil Service in 1960 at age 37. Under the superannuation provisions which applied at that time he thereby automatically forfeited any entitlement to superannuation benefits. Section 6 of the Superannuation Act, 1909, was later amended to allow preservation of benefits in the case of established civil servants who, having given at least five years of reckonable service, resigned before age 60. The amendment of the Act applied only to people who resigned on or after 1 June 1973.
Any concession in this person's case would require amending legislation and would be costly because, inter alia, it would, in equity, have to be applied in the case of all the other people who resigned before the cut-off date. The point at issue has been considered by me and my predecessors on a number of occasions.
I would also draw the Deputy's attention to the report of the commission on public service pensions which considered this issue on the basis of a number of submissions it had received. While the commission had some sympathy with the views expressed in the submissions, it was of the view that, prior to the introduction of preservation, the foregoing of pension was clearly understood to be an integral part of the decision to leave the public service prior to retirement age. The commission also considered that it was appropriate to apply a cut-off date when preservation was being introduced in the mid-1970s. The report goes on to say that the approach adopted by public service schemes, that is, to preserve benefits of all qualifying individuals, not just service accrued after the effective date, was more favourable than that provided for in the Pensions Act, 1990. For those reasons, the commission did not recommend any change in the conditions which were applied when preservation of benefits was first introduced into public service schemes.
Noel Ahern
Question:109 Mr. N. Ahern asked the Minister for Finance if he will clarify the regulations in relation to the payment and taxation of pension lump sums to part-time workers; the reason a pension fund for a person (details supplied) in Dublin 11 has had to reduce payments due to Revenue rules (details supplied); if he will outline the tax free sums available from pension funds; if part-time staff are given an equal amount; his views on whether the treatment of part-time workers involves discrimination; and if he will make a statement on the matter. [4368/01]
The calculation of retirement benefits, both pension and lump sum, is governed by the rules of the pension scheme of which an employee, whether part-time or full-time, is a member. Lump sums are paid "tax-free" provided the maximum permissible benefits payable under the rules of the scheme do not exceed the following limits: pension 1/60 x salary x service, not to exceed 40 years, lump sum 3/80 x salary x service, not to exceed 40 years.
As the salary and length of service of an employee are used to calculate the tax-free lump sum to be paid, it is to be expected that the tax-free lump sum payable to a part-time employee on retirement would, generally speaking, be lower than that payable to a full-time employee. This would not be regarded as discrimination in the circumstances.
Benefits payable under the taxpayer's pension scheme referred to by the Deputy are linked to the taxpayer's social welfare pension entitlement. This has the effect of reducing the payments payable by the pension scheme. There are no Revenue rules that would reduce "payments due" to a scheme member or pensioner. The rules of the particular scheme, subject to compliance with the limits specified above, determine the benefits payable. I have been informed by the Revenue Commissioners that the relevant inspector of taxes has no specific information about the pension fund payments of the taxpayer in question.