Brendan Howlin (Wexford, Labour)

I propose to take Questions Nos. 52 and 64 together.

I do not accept that the value of benefits payable to teachers in the proposed single public service pension scheme will exceed the value of employee contributions nor do I accept that the scheme will in some instances be less valuable to ordinary teachers than no pension provision whatsoever.

It is true that the teacher unions have voiced concerns along the lines indicated in the Deputy's questions. These concerns are stated by those unions to be substantiated by a report by Trident Consulting entitled "Future Pension Provision" which was commissioned by the ASTI, the INTO and the TUI. In quantifying employee contributions to the single scheme, the Trident report appears to regard the public service pension-related deduction as a pension contribution. That is a really important point and it was one I stressed when I met with the teacher unions. However section 7(2) of the Financial Emergency Measures in the Public Interest Act 2009 makes clear that the pension-related deduction is not a pension contribution. It is reviewable annually and it is not to be considered to be a pension contribution. If it was to be rolled into a permanent pension contribution it would change the basis of pension contributions in the public service generally.

To appreciate how the single scheme will continue to provide valuable pensions to teachers, it is instructive to look at the 2009 report of the Comptroller and Auditor General on public service pensions which estimated the annual pension cost to the State for teachers, that is, primary teachers, post-primary teachers and special needs assistants, to be 22.4% of pay. The new single scheme is expected to reduce that cost by approximately one-third, to around 15%. The 15% of pay is what the State contribution will be for future pensions. The employee contribution in the new scheme will be 6.5%. This is comprised of 3% on pensionable pay and 3.5% on net pensionable pay which is equivalent to 4.9% of pensionable pay according to the Comptroller and Auditor General's report, leaving approximately a 10% employer contribution.

In summary, the arguments put forward by the teachers' unions do not reflect the true position. It must be pointed out that while pension accrual will be on a career average rather than final salary basis, the new single public service pension scheme will continue to offer defined benefit pensions for teachers and other public servants. It is very hard to find a defined pension scheme anywhere in the public sector now so this is a very valuable commodity.

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