I thank the committee for the opportunity to present for its consideration the 2011 Supplementary Estimate for Vote 37 - Army Pensions, which is for a net sum of €15.6 million. The Army Pensions Vote makes provision for retired pay, pensions, allowances and gratuities payable to or in respect of members of the Defence Forces. The original Estimate provided a net sum of €202 million to cover a total of more than 11,300 pensioners, comprising some 9,200 retired members of the Defence Forces and 1,750 spouses and children of deceased members and some 320 spouses of deceased veterans of the War of Independence. The number of Defence Forces pensioners has continued to increase during the past year but there are now fewer than 260 spouses of deceased old IRA veterans.
Subhead B is the main subhead of the pensions Vote and covers expenditure on all superannuation benefits of former members of the Defence Forces and their dependants. It accounts for over 95% of all Army pension expenditure and is primarily demand led and non-discretionary. The original provision of €198 million for this subhead will be inadequate to meet all requirements. That is, of course, the provision made by the previous Government. The gross shortfall on the Vote is estimated at €15.8 million. A shortfall of €300,000 is also expected in appropriations-in-aid. The overall supplementary requirement will be offset by expected savings of €500,000 in subheads C, D, E and F and, when these are taken into account, the net shortfall is €15.6 million.
The reason for the shortfall is essentially twofold. First, the original approved financial allocation for Vote 37, of which subhead B constitutes the lion's share, was considerably below the funding level that my Department required to cover the projected cost of military pensions for 2011. Second, higher than anticipated numbers retired on pension from the Permanent Defence Force during 2011 and this continues the underlying upward trend over recent years and is in line with the general public service trend. In the period to the end of October 2011, 542 personnel retired from the PDF compared with a total of 534 for all of 2010. It is expected that some 650 personnel in total will retire in 2011. The number of military pensioners under subhead B of Vote 37 is currently 10,776. This Supplementary Estimate will be met by an appropriate adjustment to the Defence Vote This is a technical Supplementary Estimate. There will be no extra demand on the Exchequer over what was initially voted for 2011.
On the specific matter of personnel turnover, the committee may be aware that I have recently clarified that there has been no departure from the terms of the public service recruitment moratorium in the Defence Forces. Rather, the factual position is that limited recruitment is proceeding because the strength is below the ceiling of 9,500 as set by Government. The strength at the end of October this year was 9,393, the lowest since the early 1970s. The Defence Forces have the highest turnover rate in the public service as a matter of policy. The regular recruitment of young soldiers is an absolute necessity to ensure the pool of fit personnel. I hold strongly to my view, as previously articulated on a number of occasions in Dáil Éireann, that the Defence Forces personnel numbers should be maintained at 9,500 to ensure it has the capabilities to meet its international and domestic obligations. The recruitment that is taking place will ensure this. I commend this Supplementary Estimate to the committee.
