Dáil Questions on Public Service Pensions and Mandatory Retirement

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Dáil Issues, Public Expenditure, Worker's Rights

To ask the Minister for Public Expenditure and Reform the status of progress on work in relation to the abolition of the mandatory retirement age in the public service; and if he will make a statement on the matter. – Clare Daly T.D.

REPLY.

On foot of one of the recommendations of the Report of the Interdepartmental Group on Fuller Working Lives, my Department, with Public Service employers, was tasked to review the current statutory and operational considerations giving rise to barriers to extended participation in the public service workforce up to and including the current and planned age of entitlement to the Contributory State Pension.

In the context of the review, which is currently underway, meetings were held with employers from all public service sectors, including the civil service, local authority and health sectors, supplemented by further interactions and discussions with the employers.

The review is expected to be completed by the end of the current quarter.

Future policy in this area will be considered by Government following the outcome of the review, at which time the report of the review will be published.

Any change in the compulsory retirement age for public servants will require primary legislation.

 

 

To ask the Minister for Public Expenditure and Reform his plans regarding retaining the link between occupational pensions received by public service pensioners and the wages or salary of the person’s grade at retirement – Clare Daly T.D.

For WRITTEN answer on Tuesday, 20 June, 2017.

REPLY.

In the past, the occupational pensions of public service pensioners were generally adjusted in line with changes in the wages or salary of the pensioner’s grade at retirement. Sometimes referred to as “pay parity”, this non-statutory linkage lapsed in 2010, when the values of pensions in payment were left unchanged notwithstanding salary cuts at the beginning of that year which affected all public servants under the financial emergency legislation.

Due to a grace period associated with the 2010 salary cuts, public servants, who retired in the 26 months following those cuts, i.e. in the period to end-February 2012, had their pensions based on the higher pre-cut salary levels. This has lead to the current situation whereby post February-2012 retirees, on a like-for-like basis, mostly receive lower pensions than their earlier-retired counterparts.

In addition, since the beginning of 2011 a progressively-structured “Public Service Pension Reduction” (PSPR) has decreased the values of public service pensions above specified thresholds. A significant part-reversal or unwinding of PSPR is under way as set out in the Financial Emergency Measures in the Public Interest Act 2015.

The lapsing of pay parity along with the pension differential arising between pre and post-2012 retirees, have created the conditions under which, as we move beyond “FEMPI” legislation and the progressive removal of the Public Service Pension Reduction (PSPR) towards more normal pay and pension setting conditions in the public service, the issue of how to adjust the post-award value of public service pensions, through appropriate pay or other linkages has required consideration.

In this context, Section 6.2 of the proposed Public Service Stability Agreement 2018-2020, which was published last week, indicates that, over the duration of that agreement if ratified, policy on public service pensions in payment will be guided by the following three elements:

First, the need to adopt an equitable approach to the various public service pensioner cohorts differentiated by date of retirement (in particular pre and post end-February 2012) is affirmed.

Second, for those who retired or will retire post end-February 2012, to the extent that they retired on reduced salaries for pension award purposes, they will receive pension increases in line with pay increases received by their peers currently in employment in accordance with the terms of the collective agreement.

Third, when alignment is achieved between pre and post end-February 2012 pensioners, as will happen progressively for salary ranges up to €70,000 in 2020 under the proposed collective agreement, pay increases will continue to benefit pensions in payment for the duration of the agreement.