I propose to take Questions Nos. 145, 146 and 151 together.
The approach to the pension related deduction is that it applies generally given the fact that all public servants enjoy the benefits of a public service pension which provides for greater security and more favourable terms than the generality of private sector pensions. The graduated approach to the payment is to ameliorate somewhat the impact on lower paid public servants.
Due to the availability of tax relief at the marginal rate for pension contributions, in certain circumstances an individual on a higher gross income may incur a lower net loss than an individual on a lower income as a result of the new pension deduction.
This situation also applied before the deduction was introduced. However, it must be stated that the income tax, PRSI and health levy system is highly progressive. Those on higher incomes pay higher rates of tax. Across the entire public service, on all grades and on all pay scales, the total deductions (which include income tax, PRSI, health levy and the new pension deduction) will be higher as a percentage of gross pay as pay levels increase.
Integration takes into account the value of the Contributory State Pension (CSP) in calculating occupational pensions. Following a recommendation of the Commission on Public Service Pensions, a new system of integration was introduced, with effect from 1 January 2004, for public service pension schemes. The revised system improved the position for people on lower rates of pay and ensured that every person who meets the requirements of the pension scheme gets an occupational pension, regardless of income. It is proposed that the deduction will confer no additional pension benefit.