Thursday, 18 April 2013

Questions (31, 34, 36, 37)

Éamon Ó Cuív


31. Deputy Éamon Ó Cuív asked the Minister for Public Expenditure and Reform if he is examining payments of pensions in excess of €100,000 to former public servants; and if he will make a statement on the matter. [17869/13]

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Brendan Griffin


34. Deputy Brendan Griffin asked the Minister for Public Expenditure and Reform if he will introduce legislation that will tackle the pensions being paid to former politicians, bankers from bailed out institutions and senior civil servants; his views on whether the continued payment of these pensions, at the current rates, is socially acceptable in the context of the national economic recovery process; if he is prepared to examine constitutional amendments to tackle this injustice in the event of being unable to frame workable legislation; and if he will make a statement on the matter. [17744/13]

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Pearse Doherty


36. Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform if he will consider applying a special levy or charge to reduce the pensions of former Taoisigh, Ministers and other Oireachtas officeholders. [14065/13]

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Mary Lou McDonald


37. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform his views on whether pensions paid to former Taoisigh, Ministers and office holders cannot be significantly reduced on the basis that these payments are legally interpreted as property rights. [17837/13]

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Written answers (Question to Public)

I propose to take Questions Nos. 31, 34, 36 and 37 together.

As I have set out, on a number of occasions before, the position in relation to the pensions of senior public service retirees is kept under review by my Department. Over the course of recent years, several Government measures have been taken which serve to substantially reduce pension awards and pensions in payment to former senior public servants, Taoisigh, Government Ministers and other office holders.

A key measure in this context has been the Public Service Pension Reduction (PSPR), which applies to all public servants who retired on pensions of over €12,000 up to the end of February 2012. This progressively structured measure was introduced on 1 January 2011, based on a set of income bands and percentage reductions bearing most heavily on higher-pensioned retirees. Acting on foot of my concern in relation to high public service pensions, I subsequently acted to make the PSPR even more progressive in application, by legislating for an increase in the rate on pension amounts in excess of €100,000, from 12% to 20%, effective from 1 January 2012.

In the case of former public servants who retire or have retired from March 2012 onward, pensions have also been subject to a significant effective reduction, insofar as they have been impacted by the pay reductions applied under the Financial Emergency Measures in the Public Interest (FEMPI) legislation. These reductions have again been progressively structured, so that higher paid public servants and public service retirees, including the groups referred to by the Deputies, have proportionately been harder hit. In this context some of the most significant pay cuts have been imposed on ministerial pay, and these cuts will be fully reflected in the pension awards to current and future Ministers.

Future pension awards will also be moderated by the general pay ceiling of €200,000 for appointments to higher posts across the public service which I introduced in 2011. Revised salary rates in line with that ceiling are now in place for future Secretaries General in the civil service, who, in addition, can no longer get notional added years or immediate pensions before preserved pension age. These retrenchments in respect of salary and exit terms will ultimately reduce Exchequer pension costs in respect of senior civil servants.

Looking further ahead, the recently commenced Single Public Service Pension Scheme which applies to all new-joiner public servants, including civil servants, office holders and Ministers, will in time deliver significant savings to the public purse through reduced public service pensions. These long-term savings will derive from key features of the Single Scheme, principally an increase in pension age, inflation linkage of benefits and career-average accrual.

The various FEMPI and other measures which I have outlined indicate the significant action already taken in terms of reducing the pensions payable currently or in the future to former senior public servants, Taoisigh, Ministers and other office holders. In this general context it is important to point out that legal advice from the Attorney General states that it is possible to apply proportionate reductions to existing pensions, as has been done to date in the FEMPI legislation. However, due account must be taken of the fact that pension benefits are generally regarded as vested property rights, which must be considered in the public interest when taking action.

Finally, as Deputies will be aware, some of the institutions referred to in Deputy Griffin's question are the responsibility of my colleague Mr Michael Noonan, TD, Minister for Finance.