The Financial Emergency Measures in the Public Interest (FEMPI) Act 2015 is delivering significant boosts to the occupational pensions of most retired public servants. This is being done by way of a substantial part-reversal, or restoration, of the cuts imposed on those pensions since 2011 by the Public Service Pension Reduction (PSPR).
These effective pension increases are being delivered by changes to the applicable PSPR tables effective from 1 January 2016, 1 January 2017 and 1 January 2018. When fully rolled-out from 1 January 2018, these changes mean that all public service pensions with pre-PSPR values of up to €34,132 will be fully exempt from PSPR, while those pensioners not fully removed from the reach of PSPR will, in general, benefit by €1,680 per year. The cost of these changes is estimated at about €90 million on a full-year basis from 2018.
Looking beyond PSPR restoration, it will be necessary in due course to consider the question of how to adjust the post-award value of public service pensions in the medium term. I expect the Government will return to this issue at the appropriate time, as we move beyond the FEMPI era towards a more normal environment for pay and pension setting, all the while continuing to ensure the affordability of the cost of the public service over the long term.