asked the Minister for the Public Service whether he proposes to apply parity to public service pensions as at the date of increases in the relevant public service salaries; and, if not, why.
Ceisteanna—Questions. Oral Answers. - Public Service Pension Parity.
50.
In accordance with the policy announced in the 1974 budget, public service pensions are revised each year with effect from 1st July by reference to rates of pay in force on that date.
The grant of pensions parity to public service pensioners by way of an annual review is more generous than the practice in occupational pensions schemes generally. For that reason, and because more frequent adjustment of pensions would add considerably to the cost and difficulty of administration, it is not proposed to change the present arrangements.
I put it to the Minister that the intention in this regard was to grant parity of pensions and that, for administrative reasons, it was decided to operate it from a particular date in the year. The situation in the last year or so has changed inasmuch as there are three, and sometimes four, increases in a year in serving salaries. Under the national pay agreement at present being negotiated this position will continue and, perhaps, there may be more numerous increases having regard to that fact and the fact that the rate of inflation is 20 per cent plus. Pensioners are losing out heavily as compared with their position a few years ago. Administrative convenience is not now a sufficient reason for imposing this hardship on pensioners.
In my view it is an exaggeration to speak of this situation as one of hardship. It is also wrong to assume that the current rate of world inflation is going to continue at the rate which the world experienced in recent times. Having regard to the more normal and much to be hoped for resumption of normal pay adjustments it would be wrong to make any alterations which would be trimmed to adjust to the present, and we hope temporary, situation. Even if we take the present situation it is not one in which immense loss arises in the earlier part of the year because the increases are small and they are staged. The particular arrangement under which complete parity is given once a year is, as the Deputy knows, more generous than what is normal in non-public sector pension schemes. I think we must maintain a relationship, otherwise we will be developing a feeling of envy on the part of people who are in the private sector.
Whatever may be said about the relative advantages or disadvantages of public service versus private service pensions, is it not a fact, having regard to the changes that have taken place in the last year or so, that the parity which was granted to pensioners has disimproved and that the position is worse for public service pensioners than it was two or three years ago?
No, I am afraid I could not accept that. The lag has been reduced in recent years, most recently under the budget of 1974. The date on which pensions were automatically increased was brought forward to 1st July.
But the benefit of that has been eroded.
It is wrong to say it has been eroded except in so far as everybody's income is lowered in value to some extent in a period of rapid inflation.
But vis-á-vis serving officers the position has eroded.
Everybody's income is eroded in a time when the value of money is eroded. It would be wrong to make any change to deal with what we hope is a temporary situation.