Brendan Howlin (Wexford, Labour)

The topic submitted pertained to reductions in Civil Service numbers. Therefore, my prepared notes relate to a topic entirely different from that raised but I am very happy to address the one raised. We need to tackle these issues face-on. I do not want to personalise the matter and take the Ceann Comhairle's admonition in that regard, but let me deal with the specifics. In 1987, the Top Level Appointments Committee was established to get younger people into the top levels of the Civil Service. The old system whereby Secretaries General were appointed for life and expected to receive a full salary until the age of 65 was terminated and people were given a fixed contract of seven years. In 1987, a deal was done to facilitate this because there was a desire for younger people to apply for the job for a seven-year period. The deal done was that at the end of the seven-year period the person was entitled to continue in an analogous post at the same level of payment or receive a severance payment. Everyone who has retired under TLAC terms since 1987 received these severance payments. Therefore, we should not personalise it to one individual. However, this does not make it right and in the new austerity we must face, everything is under scrutiny.

I will outline the three component parts of the very high sum which both Deputies instanced. The first part is the lump sum payment, which is one and a half times the final annual salary. The second part is the pension, which is 50% of earned salary over the period and which is normal for every public servant, whether a Garda, a nurse or anybody else. The third, more dubious element, is the TLAC severance element. The end of year salary for the person concerned was €285,000 but this has been reduced to €200,000 and pensions and lump sums of all retiring people will be based on this as and from the end of February 2012. We will have a significant exit from the public service - we may have a debate on this separately - because people will want to preserve their pre-cut level of pension entitlements. The very elaborate lump sum and pension entitlements will be significantly reduced for anybody retiring after the end of February next year.

I have a particular problem with the TLAC severance payment and I have asked the Department to see how I can deal with it. In essence, I have sought a way of abolishing it. I want to make clear that I am not interested in grandstanding on this. I do not want to make a pretence that I can do something if I cannot do it and I end up sending lawyers to the High Court costing us more money. I understand one more individual who would qualify under the TLAC terms, and not 55 as quoted in the newspapers, has notified the Department of retirement prior to the end of February. I am not sure what I can do about this. I have asked the Department to examine it. There may be more who have yet to notify the Department. This is a time-limited issue and this is a reforming Government, and once we get over this period we will change the entire process.

This month, I will introduce to the House a new comprehensive single pensions Bill which will fundamentally alter the way pensions are determined for all public servants including Deputies, the Judiciary, gardaí and civil servants. It will not be at an end of payment calculation; it will be a career average calculation. This will not affect people with a fairly flat profile of income such as teachers, but it will certainly affect people who end up in very high positions in the public service.

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