Skip to main content
Normal View

Public Sector Pensions Legislation

Dáil Éireann Debate, Tuesday - 19 November 2013

Tuesday, 19 November 2013

Questions (262)

Terence Flanagan

Question:

262. Deputy Terence Flanagan asked the Minister for Public Expenditure and Reform if a referendum could be held on a matter (details supplied); and if he will make a statement on the matter. [48835/13]

View answer

Written answers

As with Public Servants generally, the pensions of politicians have been subject to a range of measures implemented over recent years which have had significant downward effects on pensions and pension awards.

Reforms have been introduced in relation to the age at which politicians receive a pension. Under the Public Service Superannuation (Miscellaneous Provisions) Act 2004, pension entitlements are not payable to ‘new entrant’ Members of the Oireachtas (as defined in the Act) until age 65. Furthermore, the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 introduced a new Single Public Service Pension Scheme, effective from 1 January of this year, with a new minimum pension age of 66, rising in due course with the age at which the State Pension (Contributory) will become payable. The scheme also provides for pensions based on career average earnings rather than the current final salary basis. This scheme will apply to all new Members of the Oireachtas, including Ministers, as defined in the Act.

As regards reductions to pensions, the Financial Emergency Measures in the Public Interest Act 2010 provided for an average Public Service Pension Reduction (PSPR) from 1 January 2011 of about 4% for those who retired prior to 1 March 2012, calculated in line with the following rates and bands:

Annual Public Service Pension (€)

Reduction Rate

First 12,000

Exempt

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 pensions of those who retired on or after 1 March 2012 were not subject to PSPR originally as such pensions were based on reduced rates of salary applicable at the time of retirement following the 1 January 2010 pay reductions.

In parallel with further pay reductions which came into effect from 1 July 2013, the Government decided that all Public Service pensioners, including former politicians, on pensions of €32,500 and above would be required to take a further pension reduction; this was deemed necessary and appropriate and would ensure higher-paid pensioners would make a fair and proportionate additional contribution to the fiscal consolidation measures. On that basis, the Financial Emergency Measures in the Public Interest Act 2013 provides that all Public Service pensions greater than €32,500 are subject to a reduction with effect from 1 July 2013; pensions below that level are not affected. This new reduction ranges from 2% to 5% on affected pensions and is being implemented by way of increasing and extending the existing PSPR rates outlined above. To secure the reduction, an appropriate increase in the rates is being applied to Public Service pensions above €32,500 for those who retired prior to 1 March 2012, as follows:

Annual Public Service Pension (€)

Reduction Rate

First 12,000

Exempt

Between 12,000 and 24,000

8 %

Between 24,000 and 60,000

12 %

Between 60,000 and 100,000

17 %

Balance above 100,000

28 %

In the case of those who retired on pensions above €32,500 since 1 March 2012 (i.e. those whose pensions were not subject to PSPR originally because their pensions were based on reduced salaries, unlike those who retired before 1 March 2012) the 2% to 5% pension reduction is being imposed by applying new separate PSPR rates. The new rates introduced for this group are lower than the above revised rates applicable to the earlier (pre-March 2012) retirees. The new rates are as follows:

Annual Public Service Pension (€)

Reduction Rate

First 12,000

Exempt

Between 12,000 and 24,000

2 %

Between 24,000 and 60,000

3 %

Between 60,000 and 100,000

5 %

Balance above 100,000

8 %

Finally, I would like to assure you that pay and pension costs will be kept under review as part of the Government’s ongoing strategy to bring the public finances to a sustainable level.

Top
Share