Dáil Éireann Debate, Tuesday - 24 July 2018
423. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the estimated cost of restoring pensions in full for retired public sector workers by 2019; and if he will make a statement on the matter. [34180/18]
Amharc ar fhreagraThe Public Service Pension Reduction (PSPR), was introduced on 1 January 2011 under the Financial Emergency Measures in the Public Interest (FEMPI) Act 2011.
The PSPR reduces the value of those public service pensions which have pre-PSPR values above specified thresholds. It does so in a progressively structured way which has a proportionately greater effect on higher value pensions.
A very significant part-unwinding of PSPR in three stages is taking place under the FEMPI Act 2015, with PSPR-affected pensioners getting pension increases via substantial restoration of the PSPR cuts on 1 January 2016, 1 January 2017 and 1 January 2018.
The cost of these FEMPI 2015 changes is estimated at about €90 million on a full-year basis from 2018.
The Public Service Pay and Pensions Act 2017, provides for further significant lessening of the impact of PSPR by way of threshold and rate changes to apply on 1 January 2019 and 1 January 2020.
The cost of these changes is estimated at €24 million in 2019 and €12 million in 2020. When fully in place from the beginning of 2020, these changes will mean that the vast majority of public service retirees, comprising everyone with occupational pension values up to at least €54,000, will be entirely free of PSPR. For those who retired since end-February 2012 that threshold will be even higher, at €60,000. Under section 27(3) of the Act, an order for the complete unwinding of PSPR, at an estimated additional cost of €12m, must be made by 31st December 2020.
The total removal of PSPR by 2019 would therefore cost in the region of €48 million on a full-year basis, by comparison with the cost arising in 2018 following completion, on 1 January 2018, of the FEMPI 2015 part-unwinding or amelioration which I referred to earlier.
