Written Answers Nos. 217-231
217. Deputy Joe Costello asked the Minister for Finance his plans for selling the State’s interest in AIB; his plans to retain a shareholding in the bank; if so, the extent of the shareholding; and if he will make a statement on the matter. [3813/15]
Amharc ar fhreagraAs the Deputy will be aware the Irish banking system is now in a much stronger position than it was even a year ago. Profits are recovering, balance sheets have been restructured and we have started the process of returning cash to the taxpayer following the huge investments that were made over the 2009-11 period.
Much of the banking-related work in the Department of Finance this year will focus on AIB. Given the scale of the State's investment - some €20.8 billion - and the range of options available to recoup value from the bank, officials within my department are working with AIB on reconfiguring its capital structure. Goldman Sachs International has been appointed to provide financial advice to the Department in this regard.
The focus will be on ensuring that the best decisions are made regarding potential capital restructuring options and sequencing in order to maximise the return of cash to the State from our AIB investments over time. While this is just the start of the process, it is an essential first step on the road to recovering value for the taxpayer. All options remain on the table and it is too early to specify what steps will be taken next or to put a timeline on decisions.
As I have previously stated on numerous occasions, Government policy is that we will not remain a holder of our banking investments in the long term. Given our high debt to GDP ratio, we do not have the luxury of holding all of these investments indefinitely and I envisage receipts from the gradual sale of these investments helping to play their part in reducing the State's overall debt burden in the coming years.
218. Deputy Pearse Doherty asked the Minister for Finance if new regulations on mortgages such as a loan-to-value ceiling would affect affordable housing schemes such as those run by county councils. [3816/15]
Amharc ar fhreagraI am informed by the Central Bank that the proposed macro prudential regulations in relation to residential mortgage lending will not apply to local authority mortgages as they are not provided by "regulated financial service providers" within the meaning of Section 2 of the Central Bank Act 1942.
219. Deputy Terence Flanagan asked the Minister for Finance the position regarding the PFT-SFT threshold for divorced persons (details supplied); and if he will make a statement on the matter. [3830/15]
Amharc ar fhreagraTax legislation provides for a limit or ceiling on the total capital value of tax-relieved pension benefits that an individual can draw down in their lifetime from all of their supplementary pension arrangements. This is known as the Standard Fund Threshold or SFT and was introduced on 7 December 2005 and amended since (most recently in Finance (No 2) Act 2013 which, among other things, reduced the SFT from €2.3 million to €2 million from 1 January 2014).
A higher limit, known as a Personal Fund Threshold or PFT, may be claimed where the capital value of an individual's pension benefits exceeded the SFT on the date of its introduction or on the dates of its reduction.
The SFT regime was originally introduced mainly to deal with the abuse of the tax-relief arrangements for pensions which resulted in pension overfunding by individuals and was also subsequently amended to place a constraint on the cost to the Exchequer of tax relief for pension saving generally. The regime deals with these issues at the point of pension draw down in retirement rather than by applying specific restrictions to pension savings or accrual upfront. There is, therefore, no restriction or limit on the contributions that an individual can make to his or her pension savings on an ongoing basis or on the annual accrual of pension benefits (other than the standard earnings and age-related percentage limits that determine the annual level of tax-relieved contributions that can be made by an individual). Instead, a significant tax charge is imposed on the value of retirement benefits in excess of the SFT or PFT, as appropriate, when they are drawn down. In this way, the maximum allowable pension fund for tax purposes acts to discourage the building up of large pension funds in the first place or unwinds the tax advantage of funding for benefits above those limits by clawing back, through the tax charge, the tax relief granted.
Where an individual is a member of a pension scheme or arrangement on or after 7 December 2005 and the scheme or arrangement is or becomes subject to a pension adjustment order (PAO), then in calculating the capital value of any benefit drawn down at retirement from the pension scheme or arrangement (e.g. a pension, annuity, lump sum etc.) in respect of that individual for the purpose of establishing if their SFT or PFT has been exceeded, the benefits designated to a spouse or civil partner under the PAO are to be included in the calculation as if the PAO had not been made. Also, in calculating whether an entitlement to a PFT arises in the first place, the individual seeking the PFT includes the capital value of his/her pension benefits as if the PAO had not been made.
The PAO exclusion provision was introduced as an anti-avoidance measure, designed to prevent an individual with a PFT, whose pension was subject to a PAO, from taking the view that as part of his or her pension had been assigned to a spouse/civil partner, he or she was then free to avail of further tax relief in building their part of the pension fund back up to the level of their PFT. If this had been permitted, it would have allowed a situation to arise whereby the aggregate amount of the pension funds built up originally with tax relief (in respect of which the PFT was granted) and then built back up again (with further tax relief) to the PFT amount, following the PAO, to greatly exceed the original amount of the PFT, at significant additional tax cost to the Exchequer. For these reasons, the legislation requires a PAO to be ignored for the purposes of determining whether an individual's SFT or PFT has been exceeded. The corollary of this is that the designated benefit going to the non-member spouse or partner is not included in determining the overall capital value of the non-member spouse or partner's supplementary pension benefits, if any, as to do so could result in double taxation.
Up to recently, the arrangements described above could also result (where a chargeable excess arose and a PAO was involved) in the pension scheme member being liable to the entire tax charge on the excess, notwithstanding that a significant part of his or her pension benefits may have been designated to a former spouse or partner. In section 19 of Finance Act 2014, on foot of representations made to me in this matter, I made provision so that, in such cases, the tax charge is shared more equitably between the affected individual and his or her former spouse or partner in relation to whom the PAO refers.
It has never been the case that the SFT, or a PFT if applicable, is shared between individuals whether married or divorced. The SFT has relevance and potential application only to individuals who are funding for or accruing pension benefits in pension saving arrangements approved by the Revenue Commissioners and who have relevant earnings out of which contributions to such arrangements are, or are capable of, being tax-relieved or tax subsidised. It has no direct application or relevance to individuals or taxpayers who are not in this position, including for example, the former spouses or partners of pension scheme members who are not in pension saving arrangements as described. I have no plans for further change in these arrangements.
220. Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform if his attention has been drawn to the serious damage caused to the costal protection and sea defences of a beach (details supplied) in County Donegal following recent adverse weather conditions; his plans to repair these sea defences and remedy this situation; and if he will make a statement on the matter. [3750/15]
Amharc ar fhreagraResponsibility for identifying appropriate measures to address damage to coastal defence infrastructure at Maghera Beach, Glenties rests with Donegal County Council in the first instance.
It is open to the Council to utilise its own resources, or to avail of funding that might be available from other sources to deal with the issue. However, the Office of Public Works (OPW) would consider an application for funding from the Council under the Minor Flood Mitigation Works and Coastal Protection Scheme for mitigation measures that meet the Scheme's eligibility criteria, including a requirement that the works have a cost/benefit ratio of at least 1.5:1 and are estimated to cost not more that €500,000. Proposals for larger scale works would require more detailed technical, environmental and economic assessment by the Council. The provision of funding by the OPW would also have regard to the OPW's overall allocation for flood risk management.
221. Deputy Mattie McGrath asked the Minister for Public Expenditure and Reform his views on lowering the turnover threshold which must be reached by small and medium-sized enterprises as part of the public procurement process; if a regulatory impact analysis has been carried out to ascertain the impact of the current threshold guidelines; and if he will make a statement on the matter. [3819/15]
Amharc ar fhreagra222. Deputy Mattie McGrath asked the Minister for Public Expenditure and Reform the number of small and medium enterprises which unsuccessfully tendered for contracts under the public procurement process, because of their failure to reach the current threshold guidelines; and if he will make a statement on the matter. [3820/15]
Amharc ar fhreagraI propose to take Questions Nos. 221 and 222 together.
There are no centrally imposed requirements for a minimum turnover. The assessment of a tenderer's financial and economic standing is a key part of any procurement process. Establishing the appropriate suitability criteria that are relevant and appropriate to a particular contract is, of course, a matter for the contracting authority concerned. This is because the contracting authority is in the best position to gauge the appropriate levels of financial capacity that are appropriate to the needs of that specific contract. Therefore there are no centrally imposed requirements for a minimum turnover. Such requirements must logically be developed on a case by case basis with reference to the specific needs of the contract.
The Government recognises that the small and medium enterprise (SME) sector is very important to the economy and that public procurement can be a source of business for SMEs. In this regard, my Department has issued guidance (Circular 10/14) to public bodies aimed at facilitating greater participation of SMEs in public procurement opportunities. In relation to suitability criteria, the guidelines stress that public bodies must ensure that any criteria/turnover levels set by them must be both justifiable and proportionate to the needs of the contract. The Office of Government Procurement through its category councils and through its engagement with public bodies is ensuring that this message is being brought to the attention of buyers across the public service.
223. Deputy Jim Daly asked the Minister for Public Expenditure and Reform his views on correspondence (details supplied) regarding the public sector pension levy; and if he will make a statement on the matter. [3617/15]
Amharc ar fhreagraThe public service Pension-Related Deduction (PRD), which applies to the pay of pensionable public servants, was introduced in March 2009 under the Financial Emergency Measures in the Public Interest Act 2009. It continues to provide very important revenue to the State, and as such remains a key constituent of the suite of financial emergency measures affecting public service pay and pensions which have been adopted in response to the financial crisis.
For information, I would point out that in relation to public service pension arrangements a succession of cost containment measures have been put in place over recent years affecting existing pensioners, serving staff and new recruits in the public service.
The most significant cost-saving reform has been the introduction in January 2013 of the Single Public Service Pension Scheme, also known as the Single Scheme, which is the default pension scheme for new-hire workers across the entire public service. This landmark reform targets very substantial long-run savings of about one third of pension outgoing, with those savings deriving mainly from career-average (not final-salary) pension accrual, inflation (not pay) linkage of benefits, and higher minimum pension age (effectively 68 years for most new joiners).
Several other measures have also been taken over recent years which help to curb public service pension costs as follows:
- In 2004 minimum pension age for new-joiner public service workers was raised from 60 to 65 years.
- In 2010 public service pay cuts averaging approximately 7% were applied. Further pay cuts affecting public servants with annual earnings above €65,000 were applied in July 2013. In general, these various pay reductions act to reduce individual pension and lump sum awards to persons retiring from the public service.
- In January 2011 public service pensions in payment above €12,000 were reduced via a multi-band progressively structured Public Service Pension Reduction (PSPR), which had an average impact of 4% on pensions.
- In July 2013, further cuts in public service pension payment rates, via adjustments to the rates and scope of the PSPR, and amounting to between 2% and 5%, were imposed on pensions in excess of €32,500.
It should also be noted that the great majority of public servants hired since 1995 make an explicit contribution to their pensions, comprised of 3% of pay and an additional 3.5% of net pay, where net pay is defined as salary less twice the rate of Contributory State Pension.
With regard to the future of PRD, I have already put on record my view that, subject to a continuation of our fiscal recovery and to the necessary economic conditions being in place, I envisage a future orderly wind-down of the financial emergency measures legislation. In planning for the eventual ending of the financial emergency and for addressing the related legislative position, the Government will be concerned to ensure that a return to more normal pay setting arrangements in the public service is accompanied by pension arrangements which are clearly seen to be sustainable in the long term.
224. Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform further to Parliamentary Question Nos. 73 and 74 of 15 January 2015, if the Office of Government Procurement holds data on all public works and capital projects awarded by the State. [3289/15]
Amharc ar fhreagraAs outlined in the response to PQs: 73 and 74 of 15 January 2015, it is the responsibility of individual contracting authorities to publish award notices following the signing of a contract. This process is facilitated through the national eProcurement portal www.etenders.gov.ie. The contract performance is managed locally and consequently all contract files are retained by the contracting authorities. The award information available from the eTenders is not a contract repository and the Office of Government Procurement (OGP) has not validated the data entered by contracting authorities.
The information requested by the Deputy, as entered by contracting authorities on etenders, is being collated and will issue directly to the Deputy. However, the information entered does not capture all award details for works contracts for the years 2011 to 2014. Circular 10/14 now places a further responsibility on contracting authorities to enter award information for works contracts above €25,000 with effect from 1st August 2014.
225. Deputy Shane Ross asked the Minister for Public Expenditure and Reform if changes have been made since 2013 or are planned to be made to the pensions of Ministers, Ministers of State and officeholders in the Houses of the Oireachtas and the pensions of Members of the Houses of the Oireachtas; if so, the changes or proposed changes and the potential cost to the Exchequer; and if he will make a statement on the matter. [3392/15]
Amharc ar fhreagraAs with Public Servants generally, the pensions of politicians, including Ministers and other Officeholders, have been subject to a range of measures implemented over recent years which have had, and will continue to have, significant downward effects on pensions and pension awards.
The Public Service Pensions (Single Scheme and Other Provisions) Act 2012 introduced a new Single Public Service Pension Scheme for new entrants, including new Oireachtas Members, from 1 January 2013. This scheme has a new minimum pension age of 66, raised from 65 as applies to new entrant Public Servants from 2004, and linked to future increases in the age for the Contributory State Pension. Benefits under the new scheme are substantially revised, with pensions for all new entrant Public Servants, including new entrant Oireachtas Members and Officeholders, to be based on career average earnings rather than the current final salary basis.
Successive Financial Emergency Measures in the Public Interest Acts have impacted on the pay and pensions of politicians. For example the pay reductions have substantially reduced the salaries on which pensions are calculated. A progressive Public Service Pension Reduction (PSPR) was introduced from January 2011 on the pensions of those who retired before March 2012, and a new higher PSPR rate of 20% was introduced from January 2012 for pensions over €100,000. Further PSPR reductions were introduced for pensions of €32,500 and above from July 2013 which impacts on those retiring before the end of the current 'grace period'. This was deemed necessary and appropriate to ensure that higher-paid pensioners, including Oireachtas Members and Officeholders, would make a fair and proportionate additional contribution to the fiscal consolidation measures.
A further effective pension cut applies with effect from 1 September 2013 in the case of persons who receive two or more Public Service pensions which have a combined value in excess of €32,500. This further pension cut is based on applying the PSPR to the combined value of the multiple Public Service pensions held by such a person, rather than to each pension individually. This aggregation of pensions for PSPR purposes reduces the overall Public Service pension income of affected pensioners, including significant numbers of pensioners who receive both a TD pension and a Ministerial pension.
Other measures introduced in recent years which have impacted on the pensions of politicians include the exclusion for pension purposes of long service increments and the bar on serving Oireachtas or European Parliament Members from receiving Ministerial pensions. In addition, although not a pension issue, severance payments for Ministers and other Officeholders were abolished under the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Act 2014 and no member of the current Government will receive such payments upon leaving Office.
There are no plans at present to further reduce Public Service pensions. However, I would like to assure the Deputy that pay and pension costs will be kept under review as part of the Government's ongoing strategy to bring the public finances to a sustainable level.
226. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform the expected eventual cost of the fence which is to be erected by the Office of Public Works around the Castletown Demesne, Celbridge, County Kildare. [3525/15]
Amharc ar fhreagraAt present there are no plans to erect a fence around the Castletown Demesne, Celbridge, Co Kildare.
227. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform the amount of funding his Department and-or the Office of Public Works has allocated for a court case regarding the right of way at Castletown Demesne, Celbridge, County Kildare to be taken by an organisation (details supplied); and the specific purposes or beneficiaries of such funds. [3526/15]
Amharc ar fhreagraI am advised that the Commissioners of Public Works are not aware of any court case regarding a right of way at Castletown Demesne, Celbridge, County Kildare.
228. Deputy Terence Flanagan asked the Minister for Public Expenditure and Reform the current position regarding FEMPI (details supplied); and if he will make a statement on the matter. [3621/15]
Amharc ar fhreagraI refer to my reply to Parliamentary Question No. 207 of 18 November 2014. The position remains unchanged.
229. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform if a not-for-profit sporting club may apply for a revision of a rateable valuation in respect of a premises they are now using and which was previously used by a business; the way such an application may be made; the timeframe for deciding on such an application; and if he will make a statement on the matter. [3689/15]
Amharc ar fhreagraUnder section 28 (4) of the Valuation Act 2001, a Revision Officer, appointed by the Commissioner, may carry out a revision of valuation in relation to a particular property only if a material change of circumstances (MCC) has occurred since the property was last revised. MCC is defined in section 3 of the Act as a change of circumstances, which consist of a new building, a change in value due to structural alterations of an existing building, total or partial demolition of a building, a sub-division or amalgamation of relevant property or the happening of an event whereby any relevant property begins, or ceases, to be treated as property falling within Schedule 4 of the Act i.e. exempt from rates. Should the foregoing MCC criteria be satisfied, the appointed Revision Officer will consider the application and determine and issue a valuation for the subject property within a period of six months from the date of his appointment.
The procedure for making an application for a determination of valuation is that an occupier of a property, a rating authority, a person as respects a property to which he/she is an interest holder or an occupier of a property that appears on a valuation list may apply in writing to the Commissioner of Valuation for a revision of an existing valuation or for a new valuation to be determined in respect of a new building. The statutory fee prescribed for the service is €250 which should accompany the application to the Valuation Office.
230. Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform if he will provide in tabular form the number of instances where a Department or agency has enforced the contractual remedy of non-payment or deduction of sums that were legally due to employees arising from non-compliance of the requirement set out in clause 5.3 of public works contracts; and the total amount withheld for the years 2011 to 2014, inclusive. [3704/15]
Amharc ar fhreagraThe information being sought by the Deputy is not collated by my Department. Clause 5.3 'Pay and Conditions of Employment' of the public works contracts contains provisions which apply to all workers engaged on the site. Clause 5.3.6 makes specific provision where the Contractor has not complied with Clause 5.3, that the Employer shall be entitled to estimate the amount that should have been paid to workers and contributions that should have been made on their behalf, and the Employer may deduct the estimated amount from any payment due to the Contractor, until the Employer is satisfied that all proper amounts have been paid.
The management of the tendering process for a public contract and the administration of the contract once awarded is a matter for each contracting authority. The data sought by the Deputy is held only by the contracting authority concerned.
231. Deputy Thomas Pringle asked the Minister for Public Expenditure and Reform the number of persons who have had their pension entitlements over-calculated by PeoplePoint; the options open to pensioners who because of a miscalculation of their pension entitlement have received a demand for repayment of part of their lump sum; and if he will make a statement on the matter. [3756/15]
Amharc ar fhreagraPeoplePoint is the HR and Pensions Administration Shared Service for the Civil Service. It was established in March 2013 and currently provides services to employees across 21 Civil Service organisations. Once all remaining inscope organisations transition, PeoplePoint will provide services across 38 organisations.
PeoplePoint began calculating retirement benefits and instructing the Pay Master General (PMG) in the Department of Finance to make pension payments on 15 April 2013. Since then, PeoplePoint has processed more than 3,000 retirement cases.
When setting up a pension benefit for a scheme member, new information can come to light occasionally after the retirement date, e.g. additional periods of service that requires confirmation. Rather than delay a pension payment leaving a retiring scheme member without any income, it is standard practice to set up the pension benefit based on the information known at the time, and revise the benefits as soon as possible thereafter. This can result in a benefit increase or decrease, depending on the nature of what has been confirmed. Since 15 April 2013, 38 cases of retirement benefits have been revised.
In these exceptional cases where retirement benefits need to be revised, PeoplePoint works directly with the retiree to accommodate any reasonable repayment arrangement. Individuals who find themselves in this situation are asked to make contact immediately with Pensions@peoplepoint.ie or 076 107 1000.
