Thursday, 5 July 2012

Questions (81)

Terence Flanagan


81 Deputy Terence Flanagan asked the Minister for Public Expenditure and Reform the plans he has to reduce the levels of pension paid to former politician and Ministers; and if he will make a statement on the matter. [32835/12]

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Written answers (Question to Minister for Expenditure)

A number of reforms have been introduced in relation to Public Service pension entitlements which affect Ministerial pensions. Under the Public Service Superannuation (Miscellaneous Provisions) Act 2004, Ministerial pensions are not payable to new Oireachtas Members (as defined in the Act) before 65 years of age and, under the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices Act 2009, Ministerial pensions are no longer payable to sitting Members of the Oireachtas following the last general election, or to Members of the European Parliament following the next elections to the Parliament.

Public Service pensions for former Ministers who retire after February 2012 will be reduced in line with the substantial pay reductions applied under the Financial Emergency Measures in the Public Interest (FEMPI) Acts, and for those who retired before the end of February the Public Service Pension Reduction (PSPR) applies. I recently provided for an increase in the rate of PSPR that applies to pensions over €100,000 to 20%. Furthermore, the Public Service Pensions (Single Scheme) Bill, which is currently before the Dáil, will introduce a new Single Public Service Pension Scheme with a new minimum pension age of 66, rising in due course with the age at which the State Pension (Contributory) will become payable. This will apply to all new Members of the Oireachtas, including new entrant Ministers, as defined in the Bill. This Bill also provides pensions for all Public Servants who are subject to this Bill to be based on career average earnings, as opposed to the current final salary basis.

It is important to point out that legal advice from the Attorney General says that it is possible to apply proportionate reductions to existing pensions, as has been done to date in the FEMPI legislation. However, account must be taken of the fact that pension benefits are considered to be property rights, which limits the action that can be taken. Finally, I would remind you that Members of the Oireachtas, including Ministers, have not been insulated from the financial crisis which has affected and continues to affect all sectors of the economy; and, as the above demonstrates, they have been required to make a significant contribution to the national effort to restore the public finances to a sustainable path.