Budget 2010 provided for a reduction in the pay of public servants with effect from 1 January 2010. Public servants who retire on or before 31 December 2010 will have their pension benefits calculated based on pensionable remuneration, i.e. the aggregate of retiring salary and pensionable allowances, by reference to the scales applying on 31 December 2009, with incremental credit on those scales, if appropriate. The Financial Emergency Measures in the Public Interest (No. 2) Act 2009, which gave effect to the pay reduction, provides that I may, having considered the potential legal, superannuation and personnel management issues and impacts for the public service, extend the period mentioned above beyond the specified date of 31 December 2010.
Department of Finance Circular 10/2008 introduced a revised method of reckoning variable pensionable allowances for pension purposes with effect from 1 April 2004. It provides, inter alia, that the method of reckoning be changed from the previous averaging of the last three years of allowances, to an average of the variable pensionable allowances received in the best three consecutive years in the ten years preceding retirement, as uprated to the date of retirement. In the case of the health sector, the Department of Health and Children Circular 8/2008 refers.
Public servants who retire on or before 31 December 2010 therefore will, where appropriate, have the pensionable value of their variable pensionable allowances determined by reference to an average of the allowances received in the best three consecutive years in the ten years preceding retirement in 2010. In calculating and uprating the value of allowances paid in 2010, pay rates applying at 31 December 2009 will be used.