Brendan Howlin (Wexford, Labour) | Oireachtas source

It is a discreet way of saying that. The average pension benefits - lump sum and pension - that will fall to be payable to new retirees in any given year will vary depending on the grades and years of service of that specific cohort of retirees. If a number of Secretaries General retire in one year and very few senior personnel retire the following year, the costs incurred in the two years will vary, even if the number of retirees is similar.

This year, the gross Estimate for Vote 12 was €474 million, which was based on a forecast of 950 retirements from the established scheme. However, there have been 1,050 retirements as at the end of November and if the current trend continues, the annual total will be in the region of 1,200. The effect of this higher than forecast number of retirements has been to place upward pressure on subheads A1, pension payroll, and A4, pension lump sums.

As a general rule, for each person who retires, the once-off lump sum paid out is three times the size of the annual pension. Accordingly, increases in retirement levels have a particular effect on subhead A4, which is the most variable subhead as it provides for the lump sum payments to established civil servants. The subhead is, therefore, a key driver of expenditure on the Vote in any given year.

By the end of November, just under €75 million had been expended from subhead A4, whereas the 2014 Estimate had envisaged expenditure of €66 million in that period. Further expenditure of €14 million by the end of the year is anticipated, resulting in an overall excess of €23 million on the subhead. A further expected excess of €14 million on subhead A1, pension payroll, also driven by the higher than forecast number of retirements, means it is now estimated that gross expenditure for 2015 may be in the region of €511 million, which is approximately €37 million in excess of the gross Estimate of €474 million previously approved by the Oireachtas.

To ensure the required funding is available, a Supplementary Estimate of €37 million gross is being sought. The select sub-committee should also note that the level of the gross Supplementary Estimate being sought will be mitigated somewhat by anticipated increased levels of appropriations-in-aid which, for 2015, were estimated at €104 million. Any additional receipts in excess of this amount will act to reduce the net effect of the gross Supplementary Estimate. To date, receipts of some €112 million have been recorded. In particular, receipts with respect to the public service single pension scheme are growing strongly. As Deputies will be aware, the single pension scheme for all public service employees has been operable since 1 January 2013. This means that public servants recruited since that date pay into the single scheme. As the value of the scheme increases, it will be offset against the cost of pensions on an annual basis. It is likely that total appropriations-in-aid will be in excess of €124 million by year end, which is €20 million more than originally expected.

The requirement for a Supplementary Estimate for the Public Appointments Service for 2015 is based on the significantly increased levels of recruitment and selection activity in the service in the current year.

These levels of activity were not foreseen at the start of the year and all the costs are activity-led. This is the impact of a very positive situation in the fact that we have prudent management of the finances of the country and that has allowed us to start recruiting to targeted areas of the public workforce again. There have been large increases in demand for competitions to fill roles in the Civil Service and local authorities, as hospital consultants and trainees in An Garda Síochána and in various other specialist, professional and technical positions and all of these have driven up costs in the PAS. Costs are driven by three main components - the processing of applications through an interview and via a series of online tests; fees paid to interview board members; and the cost of managing and administrating the recruitment process. I am happy to answer any questions that may arise.