Dáil Éireann Debate, Thursday - 22 September 2011
135 Deputy Michael McGrath asked the Minister for Public Expenditure and Reform the changes he intends to introduce in the area of pension and severance arrangements for retiring senior civil and public servants; and if he will make a statement on the matter. [25514/11]
Amharc ar fhreagraThe matter of pension arrangements for retiring Secretaries General, heads of other State offices and non-commercial State agencies, is at present the subject of a review by my Department, following which I will bring forward proposals. This review is dealing with the terms of future appointments. The Government will be ensuring that the new terms reflect our changed economic circumstances.
The new single public service pension scheme will introduce a career averaging system, rather than one based on final salary. There is no provision in the scheme for enhanced exit terms for Secretaries-General. I will introduce legislation on this shortly.
It should be noted that Secretaries General have had their salaries cut from €285,000 to €214,000, which will have a significant impact on the superannuation benefits of those retiring after February 2012. Secretaries General have also taken a voluntary reduction of €14,000 to bring their salaries down to €200,000. Those retiring before end February 2012 will be subject to a reduction in their pension, which in the case of a Secretary General is around 10 per cent. Lump sums over €200,000 are also being taxed.
136 Deputy Michael McGrath asked the Minister for Public Expenditure and Reform if he has compiled information on the deficits in the pension schemes of the full range of State bodies, including commercial and non-commercial State sponsored bodies and agencies; if so, if he will provide the full details available on the overall position; his response to such deficits; and if he will make a statement on the matter. [25515/11]
Amharc ar fhreagraThe vast majority of public service occupational pension schemes are financed on a pay-as-you-go basis with the annual cost of pensions being met from current revenue and therefore do not have funds. The commercial semi-state bodies do have pension funds as they are responsible for their own pension arrangements and funding. Deficits on pension funds are the responsibility of the State Companies in line with standard commercial practice. Details of the pension funds of individual State companies can be found in their Annual Report and Accounts. As Minister for Public Expenditure and Reform, I am generally required to consent to pension schemes made by these public sector bodies. The legal requirement usually arises from the founding statutes of the organisation in question. My role arises because of my responsibility for public service pension policy and for public service expenditure generally. In this context I seek to ensure that the terms granted by the commercial semi-state sector are not out of line, or likely to give rise to cost-increasing claims for similar terms elsewhere in the non-commercial public service.
Some of these commercial bodies may have funds which are failing to meet the minimum funding standard and it is for them in the first instance to put in place a credible funding plan to satisfy the Pensions Board that they are addressing these deficits, including increasing contributions and reducing benefits where necessary. Many of these bodies have been engaged in doing this over the past number of years.
137 Deputy Michael McGrath asked the Minister for Public Expenditure and Reform if a civil servant with less than 40 years’ service can avail of the provisions in the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 and retire before the end of February 2012 with their pension being based on their salary pre-reduction. [25612/11]
Amharc ar fhreagraAn established civil servant with less than 40 years service may avail of the provisions of the Financial Emergency Measures in the Public Interest (No. 2) Act, 2009 and retire before the end of the February 2012 so long as he/she fulfils the following provisions:
(i) has completed a qualifying service of a minimum of two calendar years and
(ii) has attained a minimum preserved pension age of 60 years if he/she took up employment before 1 April 2004, or 65 if he/she took up employment after 1 April 2004, when the Public Service Superannuation (Miscellaneous Provisions) Act, 2004 was introduced.
An established civil servant may also exercise the option to avail of cost neutral early retirement. Cost Neutral early retirement is a facility which allows qualifying officers who wish to retire up to ten years before minimum preserved pension age to apply to receive immediate payment of lump sum and pension, as an alternative to preserved benefits. The lump sum and pensions are reduced to make them the equivalent, in actuarial terms, of preserved benefits.
An unestablished civil servant with less than 40 years service may avail of the provisions of the Financial Emergency Measures in the Public Interest (No. 2) Act, 2009 and retire before the end of the February 2012 so long as he/she fulfils the following provisions: (i) has completed a qualifying service of a minimum of two calendar years and (ii) has attained a minimum preserved pension age of 65 years.
An unestablished civil servant may also exercise the option to avail of cost neutral early retirement. Cost Neutral early retirement is a facility which allows qualifying officers who wish to retire up to ten years before minimum preserved pension age to apply to receive immediate payment of lump sum and pension, as an alternative to preserved benefits. The lump sum and pensions are reduced to make them the equivalent, in actuarial terms, of preserved benefits.
