Dinny McGinley
Ceist:74 Mr. McGinley asked the Minister for Finance his estimate of the likely increase in the Exchequer’s exposure with regard to public service pensions; and if he will make a statement on the matter. [13276/05]
Amharc ar fhreagraWednesday, 27 April 2005
Ceisteanna (52)
Freagraí scríofa
Expenditure on occupational public service pensions relates to the payment of pensions, lump sums and spouses pension to members of the various occupational public service pension schemes. In 2004, the total cost of occupational pensions in the public service was €1.7 billion or 1.4% of GNP. The level of expenditure in future years will depend on a variety of variable factors, including the future patterns of age and service at retirement, future life expectancy of pensioners and the level of pay increases. Assuming a continuation of current trends in improved life expectancy, the most up to date projections show that the level of expenditure is projected, in constant 2004 pay terms, to increase to around €2.5 billion in 2014 and to continue to rise thereafter to around €4 billion in 2044.
While, as noted, it is difficult to estimate with precise accuracy the increase in the Exchequer's pension exposure it is nonetheless clear that the cost of pensions will continue to rise into the future. In this regard, the Government has taken significant steps to ensure that everything possible is done now to reduce this burden to a significantly lower level than it would otherwise be.
The national pensions reserve fund was established in 2001 to ease, over the long term, the Exchequer burden arising from future pension commitments. In addition, following consideration of the report of the Commission on Public Service Pensions, the Government put in place immediate measures to secure the proper evolution of spending on public service pensions over the longer term. A major public service pension reform package was announced in budget 2004. This included raising the minimum pension age and abolishing mandatory age based retirement for new recruits to the public service. These changes were given effect in the Public Service Superannuation (Miscellaneous Provisions) Act 2004 in March 2004.
These and other related measures form part of the ongoing initiative by this Government to put in place timely and appropriate reforms in the pensions area which will help ensure budgetary stability in the decades to come.