Dáil Éireann díospóireacht -
Tuesday, 23 Apr 2002

Vol. 552 No. 3

Written Answers. - Public Service Pensions.

Richard Bruton

Ceist:

101 Mr. R. Bruton asked the Minister for Finance the policy in relation to passing on to pensioners increases that are negotiated for serving public servants in respect of productivity or reorganisation deals; and the policy in relation to applying increases negotiated under benchmarking to pensioners. [12289/02]

Minister for Finance (Mr. McCreevy)

The position is that in An Action Programme for the Millennium the Government gave an undertaking to protect public service pensions. On foot of this undertaking, I announced in November 1997 the Government's decision that the benefit of the restructuring pay deals under the programme for competitiveness and work would apply on the basis of parity to public servants who had retired before the commencement dates of those deals, with a guaranteed minimum increase of 3%.

I also said that policy in relation to any future restructuring deals would be determined in the light of the recommendations contained in the final report of the Commission on Public Service Pensions. That commission had been established by the previous Government to examine and report on the occupational pension arrangements of public servants. In the meantime, in the period since November 1997 the benefit of all relevant pay increases under Partnership 2000 and the Programme for Prosperity and Fairness has been passed on to pensioners.

The final report of the Commission on Public Service Pensions was published in January 2001. On 28 September 2001 the Government announced that it had decided to accept the thrust of the package of reforms recommended by the commission and to establish the working group to advise on implementation provided for in the Programme for Prosperity and Fairness. The operational details of the implementation of the commission recommendations will be agreed by the Government following receipt of a report from the implementation working group.

The working group was established on 10 January 2002 and its main subgroup has met on a regular basis since then. It is hoped the working group will be in a position to report within the next few months. Parallel structures, subject to the same timeframe and remit, have been established in the case of the Garda Síochána and the Defence Forces.

The commission recommends, inter alia, continuation of pension increases in line with public service earnings and also that serving public servants make an additional explicit contribution towards the cost involved. In a change from the existing form of pay parity, the commission proposes that a single index of public service earnings be used in the future, with pension increases based on changes in the index to be paid automatically on a twice yearly basis.

It should be noted that the public service union representatives on the commission welcomed, in general terms, the "recommendations for the establishment of a public service pensions index and the recommendation, through the use of this mechanism, for the maintenance of the system of pension increases by reference to the pay increases of serving staff".

Public service pensioners clearly have a very significant interest in these recommendations. For this reason, the Government has decided to facilitate pensioner group representation in the working group process in relation to the commission's recommendations on pensions increase policy. As a first step, a number of pensioner groups attended a preliminary meeting with my Department on 11 December 2001. The information and consultation process, the arrangements for which are currently being finalised, will include the issue of an information leaflet to pensioners, the holding of information seminars in venues around the country, and the convening of a pensioner representative forum for the purpose of electing pensioner nominees to participate in a pension index sub-committee of the PPF implementation working group referred to earlier.

What I have said clearly sets out the Government's commitment to public service pensions and the actions which the Government has taken to deliver on that commitment. As I have shown, pensioners and their representative groups will have an opportunity in the months ahead to have the commission recommendations explained and examined in more detail and to participate in the consultation process which I have initiated on future pensions increase policy.

As regards benchmarking, the Deputy might note that when setting up the Public Service Benchmarking Body in 2000, I announced that the implementation of the benchmarking body's recommendations will be discussed between the parties within the context of any successor to the Programme for Prosperity and Fairness which might be agreed between the social partners, or whatever other arrangements may be in place on the expiry of the programme. The body is due to report at the end of June and the report will form the basis of discussions between the public service employers and the unions, with decisions being a matter for the next Government. However, it is my view that any agreed increases arising from the report of the benchmarking body should be passed on to pensioners in accordance with existing pensions increase policy.