My Department estimates that the Single Public Service Pension Scheme will, in the long run, lead to a reduction of about one third in the cost of providing public service pensions, subject to the important caveat that long-term projections in this area are inherently subject to a high degree of uncertainty. This amounts to an eventual saving in terms of annual pension outgo of some €1.8 billion in current terms. The key features of the Single Scheme giving rise to this projected saving are career-average benefit accrual, higher pension age, and pension increases linked to consumer price inflation.
Since the Single Scheme only applies to new-entrant public servants, this foreseen long-term annual outgo saving of one third will not be fully achieved until pension payments to current pensioners and current, pre-Single Scheme, staff have ceased. On this basis, realization of the full dividend to the public finances should be approached early in the second half of this century, with meaningful annual savings emerging during the period 2040 to 2050.
At this early point in the year I am not in a position to give an estimate of the likely number of Single Scheme members who will be hired over the course of 2013. A particular uncertainty in this context is the fact that appointees to public service jobs who have worked in the public service in the 26 weeks preceding their appointment will generally not become members of the Single Scheme.
With respect to the operation of the Single Scheme, my Department is liaising closely with Government Departments and other public service employers. A key priority during the current start-up phase of the scheme is to ensure the reliable collection and remittance of member contributions. Looking further ahead I am determined to ensure that all aspects of scheme functioning, including benefit accrual recording, communication with members and periodic actuarial review are delivered in a reliable and cost-effective manner.