Dáil Éireann Debate, Tuesday - 4 December 2012
236. Deputy Seán Kyne asked the Minister for Public Expenditure and Reform if he will clarify the situation by which action on reducing or levying substantial State financed pensions is being curtailed on account of past legal interpretation which has placed pensions on a par with property thereby seemingly conferring the same constitutional rights to pensions as exists with property. [54454/12]
View answerI note that the Deputy initially put this question down to my colleague the Minister for Finance. In making this reply, it is assumed that the Deputy is referring to public service pensions, and in particular to the public service pension reduction, or PSPR, which was introduced by the Financial Emergency Measures in the Public Interest Act 2010.
The fact is that all occupational pensions are earned and represent a property right, and as such enjoy the constitutional protection afforded to property. This is not a situation created by use of a legal interpretation in the manner implied by the Deputy. Significant action has already been taken by Government in respect of the reduction of public service pensions, and in particular large public service pensions. The public service pension reduction (PSPR) has imposed a reduction averaging 4% on public service pensions awarded or in payment up to end-February 2012; it is currently 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% |
The existing reduction is estimated to save some €100 million in a full year. It applies to pensions paid to some 130,000 public service pensioners paid generally from the public purse. Last year, arising from my concern about large public service pensions, I amended the legislation to increase the reduction on pension amounts over €100,000 by introducing the 20% rate on this band. Public service pensions awarded from March 2012 onwards, while not subject to the PSPR, are also subject to a significant effective reduction, reflecting the full impact of the pay cut of 1 January 2010 and, where arising, other pay cuts. The average such pension reduction is estimated at 7%, but will be considerably more severe in the case of pension awards to ministerial and other higher paid public servants who have taken proportionately larger pay cuts.
