Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

I thank the Chairman for his kind remarks about the inaugural national missing persons day, and I will pass on his comments to officials in my Department. They did an extraordinary amount of work in bringing together what I think was a very important event and which will become a regular occurrence. I thank the Chairman and members of the committee for their support and engagement in the context of the pupils from Davis College in Cork, who took a very important initiative which very substantially contributed to the decision made to hold the event.

Turning to the matters on the agenda before the committee, I thank members for the opportunity to present for its consideration the 2013 Supplementary Estimate for Vote 35 - Army Pensions, which is for a net sum of €9.4 million. The 2013 Estimate provides a net sum of €208.8 million; however, net out-turn this year is expected to be €218.2 million, leaving a shortfall of €9.4 million. At the outset, I should say that this Supplementary Estimate for the army pensions Vote will be met by an appropriate saving on the Defence Vote. There will be no extra demand on the Exchequer over what was initially voted for the Defence Vote group for 2013. This Supplementary Estimate is therefore Exchequer neutral.

Expenditure under the army pensions Vote is provided under a single programme entitled Provision for Defence Forces Pensions Benefits. The army pensions Vote makes provision for retired pay, pensions, allowances and gratuities payable to or in respect of members of the Defence Forces. The numbers of Defence Forces pensioners have continued to increase during the past year and currently there are almost 12,000 pensioners of all categories paid by the Department of Defence.

Subhead A2 is the main subhead of the army pensions Vote and covers expenditure on all superannuation benefits for former members of the Permanent Defence Force and their dependants. It accounts for over 95% of all military pensions expenditure, including gratuities, and it is primarily demand-led and non-discretionary.

The original provision of some €204.4 million for this subhead will be inadequate to meet all requirements for the year and a gross shortfall is estimated at €9 million. The principal reasons for the shortfall in this subhead are the continued increase in the number of retirement pensioners being paid from the Vote; and the ongoing impact on pension payments of the exceptionally high number of retirements on pension in recent years. In addition, many retirees are in the "long service" category and therefore entitled to maximum retirement benefits, which contribute to the increased costs.

Permanent Defence Force retirements on pension more than doubled annually in the five years up to 2012, and that is reflective of public service trends. Some 1,520 military personnel have retired on pension between January 2010 and the end of 2012, approximately two thirds of them during the 12 months or so prior to expiry of the "grace period" on 29 February 2012. At the end of 2012, there were 11,329 retirement pensioners - that is, retired members and dependants - and the current corresponding number is some 11,400. It is expected that by the end of December 2013, some 260 military personnel will have retired on pension over the course of the year. Overall, the provision in subhead A2 will not be sufficient to meet projected costs.

The number of surviving War of Independence spouses on pension is currently 157. The last Old IRA veteran in receipt of a pension died in 2006. A shortfall of €400,000 is also expected in appropriations-in-aid. This is also related to the much higher numbers leaving the Permanent Defence Force in recent years, and who are no longer paying employee contributions to the pension schemes.

Under the rules of the new public service single pension scheme introduced on 1 January 2013, contributions of single scheme members, including military personnel recruited to the Permanent Defence Force from that date onwards, will not be paid into appropriations-in-aid in the Army pensions Vote but are instead to be paid directly into central funds.

The overall supplementary requirement on subhead A2 will be offset by expected savings of €880,000 in subheads A1, A3, A4, A5 and A6 and when these are taken into account, the net shortfall on the Vote is €9.4 million.

On the subject of recruitment, the personnel turnover rate in the Defence Forces is among the highest in the public service. During 2013, some 355 personnel had left the Permanent Defence Force by the end of October for various reasons, including retirement on pension. The regular recruitment of young soldiers is an absolute necessity to ensure a pool of fit personnel to fulfil all the operational tasks assigned to the Defence Forces at home and abroad.

At the end of October 2013, the active strength level of the Permanent Defence Force was 9,222. On a positive note, general service recruitment to the Defence Forces is ongoing from the existing competition panels. To date, a total of 339 recruits have been enlisted for general service. Recruitment this year has included a medical officer appointed in September and an intake of 34 cadets, who commenced training in October. Competitions to recruit Air Corps apprentices and Naval Service engine room artificers are currently under way, from which it is proposed to enlist 20 and 15 personnel respectively.

Targeted recruitment will continue within the resource envelope allocated to defence to maintain numbers and it is expected that by the end of the year the strength of the Permanent Defence Force will be in the region of 9,400 personnel. It is planned to run a new general service recruitment competition in the first half of 2014.

Finally, I wish to acknowledge and thank individual members of the Defence Forces for their continued efforts during the year. I am conscious that we have members of the Defence Forces located in 14 different UN missions globally. All of those currently in situare likely to be abroad over the Christmas period. I wish them a peaceful Christmas and a happy new year. I wish that to their families who will not have loved ones at home with them over the Christmas period. I wish to extend my good wishes to all members of the Permanent Defence Force at home. I thank members of the committee for their attention. I am happy to deal with any issue that might arise.