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Defence Forces Pensions

Dáil Éireann Debate, Tuesday - 13 February 2018

Tuesday, 13 February 2018

Questions (98)

Lisa Chambers

Question:

98. Deputy Lisa Chambers asked the Taoiseach and Minister for Defence the reason former Army servicemen have not received an increase in their Army service pension in the past nine years; his plans to increase their Army service pension; and if he will make a statement on the matter. [6848/18]

View answer

Written answers

The last occasion that public service pensions, including Defence Forces pensions, were increased was on 1 September 2008. Up until then, public service occupational pensions, including Defence Forces pensions, were generally adjusted in line with, and from the same operative date as, relevant pay increases applied to other corresponding public servants. In the intervening years since end-2008, the Deputy will be aware that the Financial Emergency Measures in the Public Interest (FEMPI) Acts 2009 – 2013 reduced public service pay and pension rates.

The pre-existing non-statutory linkage of pension adjustments to movements in the pay of serving public servants – sometimes referred to as "pay parity" – lapsed in 2010, when the values of pensions in payment were left unchanged notwithstanding pay cuts at the beginning of 2010 that affected all public servants under the FEMPI legislation.

Moreover, due to a ‘grace period’ associated with the 2010 pay cuts, public servants who retired in the period up to end-February 2012 had their pensions based on the higher ‘pre-cut’ salary levels.  This has led to the current situation whereby post-February 2012 retirees, on a like-for-like basis, mostly receive lower pensions than their counterparts who retired before them. In addition, from the beginning of 2011, a progressively structured "Public Service Pension Reduction" (PSPR) had reduced the rates of public service pensions above specified thresholds.

The Minister for Public Expenditure and Reform in his reply to Questions Nos. 373 and 378 of 20th June 2017 indicated that the pension differential arising between pre and post-2012 retirees and the lapsing of pay parity have created the conditions under which – as we move beyond "FEMPI" legislation and the progressive removal of the PSPR towards more normal pay and pension setting conditions in the public service – the issue of how to adjust the post-award value of public service pensions through appropriate pay or other linkages has required consideration.

In this context, the Public Service Stability Agreement (PSSA) 2018-2020 sets out the policy on pension increases as now adopted by Government for the duration of that agreement, that is, to end-2020.  Section 6.2 of the PSSA states that policy on public service pensions in payment will be guided by the following three elements:

First, the need to adopt an equitable approach to the various public service pensioner cohorts differentiated by date of retirement (in particular pre and post end-February 2012) is affirmed. Second, for those who retired or will retire after end-February 2012, to the extent that they retired on reduced salaries for pension award purposes, they will receive pension increases in line with pay increases received by their peers currently in employment, in accordance with the terms of the collective Agreement. Third, when alignment is achieved between pre and post end-February 2012 pensioners, as will happen progressively for salary ranges up to €70,000 in 2020 under the proposed collective agreement, pay increases will continue to benefit pensions in payment for the duration of this Agreement.

Under the Lansdowne Road Agreement, certain public servants including relevant Defence Forces members received pay increases from 1 January 2016 (where basic salary was less than €31,000) and from 1 April 2017 (a €1,000 pay increase for all public servants with basic salaries below €65,000).  In December 2017, the Minister for Public Expenditure and Reform authorised the application of those 2016-2017 pay increases to certain public service pensions. Backdated to 1 September 2017, this pension increase is essentially confined to post-February 2012 retirees who retired on basic salaries of not more than €65,000 – in line with current pension increase policy as adopted by Government.  In January, 2018 the Minister for Public Expenditure and Reform authorised that the basic pay increases provided for in 2018-2020 during the period of the Public Service Stability Agreement also be passed on to the pensions of relevant public servants who retired post-February 2012.

I am advised that, in line with the current public service pension increase policy, my Department has commenced the detailed work of implementing these pension increases in the case of relevant military pensioners who retired since March 2012. I am also advised that this will be a significant undertaking for my Department and its payroll provider, as each pensioner rate will have to be examined at individual level on an ongoing basis as the various pension increases are worked through.

Finally, the progressive removal of the Public Service Pension Reduction (PSPR) from pensions in payment has been happening in three stages over the period 2016 to 2018.  As of 1 January 2018, it means that most public service pensioners, including about 95% of military pensioners, are not affected by PSPR at all.

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