Dáil Éireann Debate, Wednesday - 19 October 2016
15. Deputy Thomas Pringle asked the Minister for Public Expenditure and Reform the savings to the Exchequer if public sector pensions were capped at €50,000 per annum; and if he will make a statement on the matter. [30928/16]
View answerThis is a question on the potential for savings that could be achieved if there was a cap on public service pensions of €50,000 per year. As the Minister knows, there are approximately 90,000 public servants in receipt of a pension at a cost of about €2.9 billion per annum.
Based on data sets that are available to my Department in respect of public service pensioners across all sectors, it is estimated that savings of the order of €85 million per year would be generated for the public finances if pensions were capped at €50,000. I should point out, however, that the payment rates and award levels of higher value public service pensions have been significantly decreased under the financial emergency measures in the public interest, FEMPI, legislation. These decreases are attributable in particular to the public service pension reduction, PSPR, measure, which is in place since 1 January 2011 and was made more severe for most pensions above €34,000 on 1 July 2013.
While FEMPI 2015 amelioration provisions mean that the burden on pensioners is being eased over the 2016 to 2018 period to the particular benefit of those receiving low to middle value affected pensions, higher value pensions and specifically most of those in excess of €50,000 will continue to be paid at a reduced rate following the completion of that amelioration on 1 January 2018. These phased PSPR changes across the public service will cost an estimated €90 million annually in 2018 and will ensure that the top 20% higher value public service pensions will continue to be impacted by the PSPR.
