Tuesday, 24 September 2019

Ceisteanna (123)

Niamh Smyth


123. Deputy Niamh Smyth asked the Minister for Public Expenditure and Reform if the case of a person (details supplied) will be reviewed; the status of full restoration in this case; and if he will make a statement on the matter. [38416/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

I would advise the Deputy that while pensions for An Garda Síochána (the employer in this case) are a matter for the Minister for Justice and Equality, as the matter raised relates to pension policy for the public service generally, I will address the questions raised.

Firstly, I should clarify that retirement lump sum payments under public service pension schemes were not directly reduced by the Financial Emergency Measure in the Public Interest (FEMPI) legislation. The FEMPI legislation implemented measures that directly reduced the pay of serving staff and introduced a Public Service Pension Reduction for pensions in payment, subject to certain rates, thresholds and exemptions. As both the annual pensions and lump sum payments of members of pre-existing public service pension schemes (i.e. excluding the Single Public Service Pension Scheme) are directly linked to salary at retirement, the reductions to the pay of public servants would have had a knock on impact on the lump sum payment they received at retirement.

However, because of what is known as the first ‘grace period’, those who retired between 1 January 2010 and 29 February 2012 did not have the first FEMPI pay reduction (imposed 1 January 2010) reflected in the salary rate used to calculate their annual pension or their lump sum. A second round of FEMPI reductions was imposed in 2013 (imposed on 1 July on public servants with an annual remuneration above €65,000). The second ‘grace period’ meant that those who retired from that point onwards (assuming their pay was affected by those reductions while still serving) did not have those reductions reflected in the salary rate used to calculate their annual pension or lump sum.

Rather than enter into the details of the individual case, which, as I say, is a matter for the Minister for Justice and Equality, I would note that where retirement occurred after 1 March 2012, the retirement lump sum would be calculated by reference to the salary rates in payment on 1 January 2010 (i.e. following the first FEMPI pay reduction). If the salary was subject to the second FEMPI reduction on 1 July 2013, the operation of the second grace period would mean that the lump sum would still have been calculated by reference to the 1 January 2010 rate.

In accordance with normal public service pension arrangements, retirement lump sums are calculated on the rates of salary that a public servant is in receipt of at time of retirement (with the exception of the 'grace period' protection I have described above). I have no proposals to make any change in this regard.

Secondly, in relation to pension increases, the current policy applying to pensions paid under pre-existing pension schemes was agreed by the Government as part of the Public Service Stability Agreement 2018-2020 (PSSA). This policy is essentially a time-limited (expires end-2020) resumption of the non-statutory pension increase arrangements, sometimes known as pay parity, which formerly prevailed, but which lapsed in 2010. Under that policy, pay increases applied to serving staff over the course of the PSSA are passed on to those annual pensions where the salary on which the annual pension is based, in any case, does not exceed the salary of a serving staff member with the same grade and scale point, after the pay increase has been applied. If it qualifies, the annual pension is eligible for an increase to the extent that this will ensure alignment with the pay of serving staff.

Guidance on operation of the pension increase policy is set out in my Department’s Circular 02/2018, while further instructions have recently been issued in Circular 19/2019.

Finally, if the pension in question remains subject to the Public Service Pension Reduction (PSPR), the individual will qualify for a further lessening of its impact, or, indeed, its total removal in 2019 or 2020. The Deputy should also note that, no later than 31 December 2020, I will make an order which will specify a date for the full removal of PSPR from the residual group of PSPR-affected pensions.