The position on the pensions of senior public service retirees, including the groups referred to in the Deputy’s question, is kept under review constantly by my Department. In this context, it is important to point out that, over the course of recent years, several measures have been taken by the Government which serve to substantially reduce pension awards and pensions in payment to former senior public servants, office holders, Taoisigh and Ministers.
A key measure in this context has been the public service pension reduction, PSPR, which applies to all public servants who retired on pensions of over €12,000 up to the end of February 2012, including retirees in the groups referred to in the Deputy's question. This progressively structured imposition on pensions was introduced on 1 January 2011, based on a set of income bands and percentage reductions and bearing most heavily on higher pension retirees. Acting on foot of my concerns with regard to high public service pensions - I acknowledge this is a concern for the public - I subsequently acted to make the PSPR even more progressive in application by legislating for an increase in the rate of PSPR on pension amounts in excess of €100,000, from 12% to 20% on the excess amount, effective from 1 January 2012.
In the case of former public servants who retired from March 2012 onwards, pensions have also been subject to a significant effective reduction, in so far as they have been impacted on by the pay reductions applied under the Financial Emergency Measures in the Public Interest Act, the FEMPI legislation. These reductions have again been progressively structured such that higher paid public servants and public service retirees, including in the groups referred to by the Deputy, have proportionately been harder hit. In this context, some of the deepest pay cuts of all have been imposed on ministerial pay and these pay cuts will be fully reflected in the pension awards to current and future Ministers.
Future pension awards will also be moderated by the general pay ceiling of €200,000 for appointments to higher posts across the public service which I introduced immediately on coming into office. Revised salary rates in line with that ceiling are now in place for Secretaries General in the Civil Service who, in addition, can no longer receive notional added years or immediate pensions before preserved pension age.
Additional information not given on the floor of the House
The LRC recommendations this week for a new public service agreement contain further pay reductions which are concentrated on higher paid public servants. When implemented, these pay cuts will in due course impact on the pensions awarded to future retirees from the groups covered by the Deputy's question. In line with the LRC's recommendations, the Government also intends to align the reductions in public service pensions in payment with the reductions applied to serving staff, in respect of pensions in payment greater than €32,500. Further details of these pension impacts, including details of the necessary legislative changes, will be drawn up shortly.
Looking further ahead, the recently commenced single public service pension scheme which applies to all new joiner public servants, including civil servants, office holders and Ministers, will in time deliver significant savings to the public purse through reduced public service pensions. These long-term savings will derive from key features of the single scheme, principally an increase in pension age, inflation linkage of benefits and career average accrual.
The various FEMPI Act and other measures I have outlined indicate the significant action already taken in reducing the pensions payable currently or in the future to former senior public servants, office holders, Taoisigh and Ministers. In this general context it is important to point out that legal advice from the Attorney General states it is possible to apply proportionate reductions to existing pensions, as has been done to date in the FEMPI legislation. However, due account must be taken of the fact that pension benefits are generally regarded as vested property rights, which must be considered in the public interest when taking action.