This amending legislation is concerned with the abatement of public service pensions where the pensioner is re-employed in the public service. It deals with pensions which are subject to statutory abatement provisions which can be amended only by an Act of the Oireachtas. Where provisions for abatement in pension schemes can be amended by regulation or otherwise without recourse to legislation, they are not dealt with in this Bill. The Defence Forces Pensions Schemes can be amended in this way and it is for this reason, and not any sinister one, that they are not included in the Bill. It is intended that when it has been enacted, provisions which can be amended by statutory instrument will then be duly amended. When the Bill was going through the Dáil, some members expressed concern about the Defence Forces Pensions Schemes but I can assure the House that, since then, I have received a proposal from the Minister for Defence to amend these Schemes on the lines of this Bill.
At this stage, I should, perhaps, explain how abatement works at present and to what extent it will be changed by the Bill. The normal abatement provision ensures that, when a public service pensioner is re-employed anywhere in the public service, his pension is reduced by any sum by which the total of his annual salary on re-employment plus his pension exceeds the annual salary which he had on retirement from the position in respect of which his pension was awarded. Take a simple example, say of a man who retires on a pension of £500 a year, having been employed at £1,000 a year. He is subsequently re-employed in the public service. The normal abatement provision at present ensures that whatever the pay on re-employment, only sufficient of the pension will be paid to bring the pay on re-employment plus the pension up to £1,000 a year. Thus, if the pay on re-employment is £1,000 a year or more, no pension is payable. If it is £500 or less, the pension is payable in full. Of course, the normal case is where the pay on re-employment is just lower than that on retirement, say £800 a year in the example I have given. Here, only £200 of the pension would be payable, that is just enough to bring the aggregate of pension plus pay on re-employment to the £1,000 retiring salary. This provision was based on the concept that if a public service employee was worth a salary of £1,000 a year and no more before his retirement, he should not be paid more than this by way of pension plus pay if re-employed subsequent to his retirement.
So much for the existing provisions. The Bill changes these so that, in future, abatement will apply only where re-employment is secured in the same service as that from which the pensioner retires. As an example, if a local authority pensioner were employed in the Civil Service, abatement would not affect his pension. It would under the present law. Thus, future abatement will be of much more limited scope than at present.
Secondly, although the Bill retains abatement where re-employment is in the same service, it provides that the Minister for Finance, or in the case of local authority pensioners, the Minister for Local Government, may waive this abatement where the re-employment is in the public interest.
Thirdly, the Bill provides that where abatement still applies—because the re-employment is in the same service and it has not been waived on grounds of public interest—it will no longer be tied to pay on retirement from the pensionable position but rather, to that pay as revised from time to time to keep it in line with current pay levels.
These changes are all for the benefit of re-employed pensioners and will effect a considerable improvement in their position. Moreover, they will take effect retrospectively from the 1st January last.
Strong representations were made in the Dáil to give the Bill even greater retrospection, but on consideration I think this is asking too much. It is the old story of giving an inch and being asked for a mile. In fact, in this case a lot more than an inch has been given in that the Bill as circulated provides for considerable retrospection. The case for making the Bill retrospective to an earlier date than that chosen was largely based on the fact that many Army pensioners have received demands for considerable sums of money because, due to the retrospective status increases recently awarded to them in respect of their present employment, abatement of their Army pensions was inadequate. However, I have been in touch with the Minister for Defence on this matter and I find that, although there are some 25 pensioners affected by these demands, the amendment of the Defence Forces Pensions Schemes on the lines of the Bill with retrospection to 1st January last will result in the Minister for Defence owing money to 24 of them.
In the other case, the man has a relatively large pension and his pay since he was re-employed in the public service about a year and a half ago has been increased. For the future this man will be allowed to draw his relatively large Army pension without any abatement, so that he will be much better off than he was while in the Army, and very much better off than before this Bill was introduced. I do not think his can fairly be described as a hardship case and it certainly would not warrant my making the Bill retrospective and thus give him still more benefits. In all the circumstances, I think I must adhere to the decision that the effective date of this Bill will be the 1st January, 1965.
I recommend the Bill to the House for its approval.