Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

There will be an opportunity if members wish to ask broader questions about UN service, our current plans and so on. The issue is topical. I will try to be as open as I can, but we need to get through the Supplementary Estimate first. It is largely a budgetary and technical measure and I will answer questions members may have.

I thank the committee for giving me the opportunity to present for its consideration the 2015 Supplementary Estimate for Vote 35 - Army pensions. In the 2015 Estimate a sum of €215.6 million for Army pensions was provided. However, the net outturn this year is expected to be €222.1 million, leaving a shortfall of €6.5 million. The Supplementary Estimate will be met by an appropriate saving in the defence Vote and, as a result, there will be no extra demand on the Exchequer over what was initially voted for the overall defence Vote group in 2015. The required savings can be met without a detrimental impact on defence programmes.

Expenditure under the Army pensions Vote is provided for under a single programme entitled, Provision for Defence Forces Pensions Benefits. The Vote includes a provision for retired pay, pensions, allowances and gratuities payable to or in respect of members of the Defence Forces. The number of Defence Forces pensioners has continued to increase in the past year and currently stands at some 12,100 across all categories which is significantly more than the number of personnel in the Defence Forces.

Subhead A2 is the largest subhead in the Vote and covers expenditure on all superannuation benefits for former members of the Permanent Defence Force and their dependants. It accounts for more than 95% of all military pensions expenditure, including gratuities, and is essentially demand driven and non-discretionary. The original provision of some €211.4 million for the subhead will be inadequate to meet all requirements in the year. The shortfall is estimated to be €7.2 million. The principal reasons for the shortfall are the continued underlying increase in the number of retirement pensioners being paid from the Vote and the ongoing impact on pension payments of the high number of retirements on pension in recent years. In this regard, Defence Forces' pension requirements more than doubled annually in the five years to 2012, reflective of public service trends generally. In addition, many retirees continue to be in the long service category and are, therefore, entitled to maximum retirement benefits, which contributes to the increased costs. A further factor is increased longevity in the population generally. At the end of 2014 there were 11,536 retired pensioners, that is, retired members and dependants of deceased members. The current corresponding number is 11,612. By the end of 2015 it is expected that some 300 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 overall supplementary requirement will be offset by expected savings of €710,000 in the non-superannuation subheads A3 to A6, inclusive. When all issues are taken into account, the shortfall in the Army pensions Vote is €6.5 million. Therefore, the intention of the Supplementary Estimate is to fund the shortfall of €7.21 million in subhead A2 by seeking additional funding of €6.5 million and reallocating savings of €710,000 in subheads A3 to A6, inclusive, to subhead A2.

While recruitment to the Permanent Defence Force is not provided for in the Army pensions Vote, members may wish to be aware of what is being done to fill positions left vacant through retirements and discharges. As I have told the committee previously, the Government will seek to maintain its existing policy of regular, ongoing recruitment within approved strength levels. As indicated in the White Paper, this brings in the new blood that a dynamic, modern, professional military force needs if it is to meet its obligations. This, in turn, helps to maintain the age profile of personnel as close as possible to the appropriate levels for all ranks. The average age of serving Permanent Defence Force members is 36 years across all ranks, while almost 70% of personnel are under the age of 40 years.

I am pleased to say overall recruitment levels this year have kept pace with those of the previous two years and are in line with the Government's objective of maintaining the strength of the Permanent Defence Force at 9,500 personnel, which was reaffirmed in the White Paper. A targeted recruitment campaign this year has seen the enlistment of 239 recruits, 49 cadets, 25 aircraft apprentices, five Naval Service mechanics and 19 instrumentalists for the military band, making a total of 336. It is envisaged that, with further general service recruitment, there will be an intake of more than 400 new personnel by the end of the year. In terms of ongoing manpower planning, a fresh recruitment campaign for general service recruits for the Permanent Defence Force was launched in August. The induction of successful candidates from this competition is expected to commence in early 2016.

I thank all retired military veterans for their valued public service during the years. I also reiterate that, as indicated in the White Paper, the Department and the Defence Forces will continue to work together to develop further in coming years the various supports available to existing personnel and veterans.

I commend the Supplementary Estimate to the committee and will be pleased to take questions. If members wish to sum up this measure, the amount in question represents 1% of the overall defence Vote and just under 3% of the pensions Vote which has been underestimated and needs to be corrected. That is what we are trying to do. The percentages are relatively small, but €6.5 million is still a considerable amount of money and we need to go through the appropriate process to ensure it can be provided.