Wednesday, 13 May 2020

Questions (145)

Barry Cowen


145. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the reason for introducing the pension abatement in the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 by which a retiree who returns to work in the public service will have their pension reduced to match the pay of the previous public service employment; his views on whether this acts as an incentive to work in the private sector over returning to the public sector; if the pension of such a person returns to normal once they retire from the second public sector employment; the estimated cost if the abatement was removed; the potential issues if the abatement were removed; and if he will make a statement on the matter. [5078/20]

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Written answers (Question to Public)

The policy of abatement of a public service pension is long-standing within the rules of various public service pension schemes. It was not introduced in the Public Service Pensions (Single Scheme and other Provisions) 2012 Act (the 2012 Act) but rather it is a principle that dates back to the Superannuation Act of 1834.

With the introduction of the 2012 Act the application of abatement was widened. Previously, abatement generally applied only where the pensioner returned to work in the same sector or scheme from which the pension was drawn. As a result, the policy of abatement was not consistent in its application across sectors. Following the introduction of the Act, the principle of abatement is now applicable in respect of any public service employment obtained by a public service pensioner.

Sections 52(1) to 52(5) of the 2012 Act provides for the abatement of a public service pension where a retired public servant, whose pension is in payment, is re-employed in the public service such that no more of the pension when combined with the remuneration in the new job shall exceed the pensionable remuneration of the old job. Once a public service pensioner ceases to be employed in the public service their pension ceases to be abated.

The individual Pension Paying Authorities across the various sectors of the Public Service are responsible for ensuring that pension abatement is correctly calculated, processed and applied to pension payments as required. Information regarding the financial effects arising from the implementation of abatement is not routinely reported centrally as a matter of course.

Overall, I am satisfied that the measures taken in the 2012 Act were progressive, fair and necessary. The extension of abatement across the public service was appropriate as a modernising pension reform, and abatement continues to represent a suitable and measured response to legitimate public concerns about simultaneous payment of both a valuable pension and a salary to individuals working in the public service.

Finally, the Deputy may also be aware that in recent years some Public Service bodies have experienced retention issues in respect of experienced personnel. If retired individuals could return to work without being abated it could create incentives for more experienced staff to retire on pension and return to the public service workforce. In general retired staff should be used to fill posts in very limited circumstances and on a short-term basis only with policy directed toward filling posts through normal recruitment wherever possible.