Written answers
Thursday, 20 September 2012
Department of Defence
Defence Forces Remuneration
Joe Higgins (Dublin West, Socialist Party)
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To ask the Minister for Defence if he will explain the reason army personnel who have served longer than 21 years lose their increment upon reaching retirement age. [39827/12]
Alan Shatter (Dublin South, Fine Gael)
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Under the pre-April 2004 Defence Forces Pension Schemes, the minimum service required for an immediate pension in the case of NCOs and Privates is 21 years, regardless of age. The 21-year pension consists of the following elements, all of which are payable for the person’s lifetime: (a) basic flat-rate pension that varies according to rank; plus (b) an addition in respect of military service allowance (MSA) equal to 40% of the MSA rate where discharged since August 1990; and (c) if applicable, fixed percentage additions in respect of certain other qualifying payments such as technician pay.
An ‘additional increment’ is also payable at a flat rate for each year of service in excess of 21 years up to a maximum of 31 years. This increment is increased, where appropriate, by the top-up at (c). Where maximum pensionable service is 31 or more years, the MSA top-up is 50% of the rate of MSA (rather than 40%). However, the additional increment ceases to be payable when the pensioner reaches the qualifying age of 66 under the Social Welfare code for a State Pension (Contributory), or if they become entitled to a State Pension (Transition) at the earlier age of 65. At the same time, the 50% MSA top-up reverts to the 40% rate.
These arrangements are in accordance with the long established principle of integrating occupational pensions with Social Insurance benefits of employees who are in full PRSI class. This includes NCOs and Privates, who are fully insured for the range of benefits under the Social Welfare Acts such as the State Pension. ‘Integration’ means that a person’s entitlement to Social Insurance benefits such as the State Pension is taken into account when calculating the rate of occupational pension payable. The State Pension etc. is regarded as part of the overall pension package payable to the individual. The integration principle applies right across the public service and, indeed, in many areas of the private sector as well as in other countries.
However, the method of integration for military pensioners is actually less severe than in other areas of the public service. The maximum personal rate of State Pension is currently €230.30 a week (if under age 80). This is considerably greater than any reduction that could arise under the pre-April 2004 Defence Forces’ pension arrangements on qualification for the State Pension.
The general issue of integration of occupational pensions in the public service was examined by the Commission on Public Service Pensions. Its final report, published in November 2000, was considered and broadly accepted by Government. The Commission accepted that integration is a fundamental component in the public service pension framework and was strongly of the view that it should be continued. It did not make any recommendations that would affect the current integration arrangements applicable to these retired NCOs and Privates.
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