Dáil Éireann Debate, Wednesday - 27 January 2016
65. Deputy Terence Flanagan asked the Minister for Public Expenditure and Reform when increases in public service pensions will be linked to the consumer price index; and if he will make a statement on the matter. [3428/16]
Amharc ar fhreagraThe Public Service Pensions (Single Scheme and Other Provisions) Act 2012 enabled the commencement on 1 January 2013 of the Single Public Service Pension Scheme for new entrants to public service employment. The Single Scheme rules stipulate that both in-career pension credits and awarded pensions should be increased in line with increases in the Consumer Price Index (CPI).
Section 47 of the 2012 Act provides for the possible extension of this CPI linkage to pensions paid by other pre-existing public service pension schemes subject to ratification of an order by both Houses of the Oireachtas. However, no order to this effect has been made to date.
Instead, and reflecting the realities of the fiscal crisis and the emerging recovery, I have acted to commence, with effect from 2016, the reversal of the unprecedented cuts to public service pension rates which have applied since 2011 by way of the Public Service Pension Reduction (PSPR) under the financial emergency legislation.
This part-reversal of pension cuts is provided for in the Financial Emergency Measures in the Public Interest Act 2015 (FEMPI), which is delivering effective pension increases through changes to the applicable PSPR tables from 1 January 2016, 1 January 2017 and 1 January 2018. When fully rolled-out from 1 January 2018, these changes mean that all public service pensions with pre-PSPR values of up to €34,132 will be fully exempt from PSPR, while those pensioners not fully removed from the reach of PSPR will, in general, benefit by €1,680 per year. The cost of these changes is estimated at about €90 million on a full-year basis from 2018.
Looking beyond PSPR restoration, it will be necessary in due course to consider the question of how to adjust the post-award value of public service pensions in the medium term. I expect the Government to return to this issue at the appropriate time, as we move beyond the FEMPI era towards a more normal environment for pay and pension setting, all the while continuing to ensure the affordability of the cost of the public service over the long term.
