Thursday, 8 November 2012

Questions (173)

Martin Heydon

Question:

173. Deputy Martin Heydon asked the Minister for Public Expenditure and Reform the terms of the Public Service Pension Reduction; the timeframe it remains in place; if it is paid by both public servants and civil servants; and if he will make a statement on the matter. [49346/12]

View answer

Written answers (Question to Public)

The Financial Emergency Measures in the Public Interest Act 2010 introduced the Public Service Pension Reduction (PSPR). At present, the position is that the 2010 legislation provides, with effect from 1 January 2011, for an average reduction of about 4% of pension, calculated in line with the following rates and bands:

Annual Public Service Pension (€)

Reduction Rate

First 12,000

0%

Between 12,000 and 24,000

6%

Between 24,000 and 60,000

9%

Between 60,000 and 100,000

12%

Balance above 100,000

20%

I legislated last year to add the 20% rate for the over €100,000 band with effect from 1 January 2012.

The measure secures annual savings estimated at €100 million and applies to over 130,000 pensioners. The PSPR applies to former civil and public servants and to the survivors pensions of spouses and children of former public servants. The measure is tapered to mitigate the effect on the lowest level of pension income and is consequently progressive in nature. Former public servants in receipt of high rates of superannuation benefit, including former members of the Government and the Oireachtas and other office holders, including the Judiciary, have and will bear the highest reduction.

The preamble to the 2010 legislation clearly establishes the PSPR as an emergency measure taken in the context of the financial and budgetary situation pertaining. There are also significant safeguards built into the Statute, including an annual review and report which must be laid before the Oireachtas in June each year, as well as provision for me as Minister to examine cases for full or partial exemption and to remove doubts, where appropriate.